It took a while – 134 days to be exact – but Pennsylvania finally has a state budget. Gov. Josh Shapiro signed the long-overdue 2025/26 package yesterday afternoon (hours before the president signed the partial year federal budget after a 40+ day shutdown), which comes in at $50.1 billion, about $2.27 billion more than last year. The is the largest spending budget in the Commonwealth’s 300+ year history. The state will end the year with a projected $200 million balance, while spending about $5 Billion from the surplus savings but not touching the Rainy-Day Fund (which is reserved for extraordinary events). In his speech, Shapiro touted education funding, workforce development programs, and economic development benefits. 

What’s interesting? Lawmakers didn’t add any new taxes or any new revenue sources this time around. Proposals like legalizing marijuana or taxing (and regulating) skill games were left out.  

What’s even more interesting is what the final budget package did not include: Gov. Josh Shapiro’s RESET board proposal to preempt local decision-making over energy facilities or fees for Pennsylvania State Police. The package did extend the $1.95/phone line Uniform 911 surcharge until February 2029, makes changes to the corporate net income tax, authorizes the creation of up to five air mobility sites, and appropriates federal funding for solar projects, 

Of specific interest to townships, there is about $50 million available for grants through the Small Water and Sewer Program, essentially moving unused funding from prior H20 PA program. The package extends the waiver for the local match for the Commonwealth Financing Authority’s Multimodal Transportation grant fund through December 31, 2026 and authorizes PennDOT to extend the same waiver for its grant program. 

State permitting reform was part of the package. All state agencies will be required to create a list of permits they issue, keep the list updated, and create an online tracking system for permit application status. The package builds on the Streamlining Permits for Economic Expansion and Development (SPEED) program created by the 2024-2025 fiscal code. For water quality general or renewal permits, including NPDES permits, DEP will be required to identify technical deficiencies within 40 days of application submission, and if such deficiencies are addressed by the applicant within 50 days, the department is required to issue its final determination within 60 days. If the applicant does not address the deficiencies within 50 days, DEP is required to deny the permit. If DEP does not issue a final determination within 60 days of submission, the applicant is deemed approved.  

With electric demand soaring and numerous data center proposals across the state, the Pennsylvania Public Utility Commission is directed to review and validate electric load forecasts submitted to PJM Interconnection and to coordinate with PJM and other states to ensure accurate electric load forecasts and nonduplicative information.  

And one more notable change: as part of the deal, the governor agreed to pull Pennsylvania out of the Regional Greenhouse Gas Initiative, ending the state’s participation in the carbon emissions tax program. 

Now that the budget and implementing legislation has been signed, the state can pay out funds due to counties, school districts, municipalities, vendors, and more who have been waiting for funds due to them.