HARRISBURG, Pa. — Lehigh Valley lawmakers responded along partisan lines Tuesday following Gov. Josh Shapiro's 2025-26 budget proposal that called for more funding for basic education, reworking the tax code and legalizing marijuana.
Shapiro delivered his third budget proposal before a joint session of the General Assembly, pitching a $51.4 billion-spending package that would raise the minimum wage, invest in the state's life sciences sector, and regulate skill games — slot-like gambling terminals that appear in bars and restaurants across the commonwealth.
Shapiro, a first-term Democrat, repeatedly described his proposals as commonsense solutions that would improve the lives of Pennsylvanians from all walks of life.
He noted that voters went to the polls in November and elected a divided Legislature. Those people expect lawmakers to work through their differences and get results, he said.
"I ask you to resist the temptation to put politics above people — and instead let’s continue to work together to solve more problems," Shapiro said.
But many Republican lawmakers were quick to chaff at his proposals, including members of the Lehigh Valley's delegation to Harrisburg.
"His plan would drain our general fund surplus and then dip into the Rainy Day Fund. This would set us up for a catastrophe."State Rep. Zack Mako, R-Lehigh/Northampton
The budget as proposed would wipe out the state's general fund surplus and require Pennsylvania to dip into cash reserves intended for emergencies, Republicans said.
"I think the governor's budget appears to be built in fantasy land here. He's planning to spend 4 billion more than what we make," said state Sen. Jarrett Coleman, R-Lehigh/Bucks.
Similarly, Rep. Zack Mako, R-Northampton/Lehigh, criticized the deal in a prepared statement, noting the budget proposal would increase spending by 7.5% while state revenues would only increase by 2.8%.
"Even an elementary school student can see this is unbalanced," Mako said. "His plan would drain our general fund surplus and then dip into the Rainy Day Fund. This would set us up for a catastrophe."
Coleman credited Shapiro with his efforts to protect the state against the avian flu, among other efforts. But those good intentions don't address the fiscal reality the state is facing, he said. It will be up to lawmakers to sort out the possible from Shapiro's wish list, he said.
"A lot of the things he spoke about have merit, but we just can't pay for it," Coleman said.
Public education
Shapiro called on increasing education spending by $526 million, including a $75 million boost to basic education and an additional $75 million for special education.
That would come on top of the $275 million increase in basic education and $100 million for special education in the current budget. The spending increase stems from a 2023 Commonwealth Court ruling that found the state's existing funding formula was unconstitutional.
The budget also calls on reforming cyber school funding, noting the current system costs taxpayers between almost $7,660 to over $63,000 per student. The governor's office estimated his reform would save $358 million, if passed.
At no point did Shapiro mention school vouchers in his remarks. He won over some conservative support during his 2022 gubernatorial campaign when he backed school choice options, but the are deeply unpopular with his party.
Shapiro dropped vouchers from the 2023-24 budget, infuriating Senate Republicans who thought they had reached a deal with the governor. They don't appear to be back on the table this year.
"The proposals the governor outlined today are encouraging; and my committee is ready to get to work to advance these initiatives," said Rep. Pete Schweyer, D-Lehigh, chair of the House Education Committee. "I also look forward to having consensus on key issues with my friends from across the aisle."
Economic development
Shapiro backed a number of initiatives intended to make Pennsylvania's economy more competitive, with a focus on its agriculture and life sciences sectors.
"We’re effectively doing the research but losing out on commercial opportunities to other states. Let's change that."Gov. Josh Shapiro during 2025-26 budget address
The budget includes $50 million to create a PA Innovations program that would help research universities partner with businesses to bring their work to market. While Pennsylvania is a leader in securing research patents, it's lagging behind when it comes to venture capital from the private sector, Shapiro said.
"We’re effectively doing the research but losing out on commercial opportunities to other states. Let's change that," he said.
In addition, Shapiro called on creating $55 million in grants to help child care facilities attract and retain workers. The industry historically struggles to provide its workers with living wages, and the state reported nearly 2,200 child care centers have closed since 2019.
Those closures have made it more difficult for parents of young children to work; reversing that trend would boost Pennsylvania's lagging workforce, Shapiro said.
State Rep. Gary Day, R-Lehigh, praised Shapiro's willingness to address the issue of child care. But like his Republican colleagues, he said the budget's overall level of spending couldn't be ignored.
"While we understand the governor’s aspirations for Pennsylvania, this proposal places significant pressure on future budgets and fiscal sustainability," Day said in a prepared statement.
The governor also renewed his call to raise the minimum wage to $15 an hour from its current rate of $7.25. Should the increase materialize, it would generate $100 million in new income tax revenue statewide, his office said.
New revenue? Marijuana, skill games
Shapiro wants to finance his proposals by creating new revenue streams, mostly from legalizing marijuana and regulating skill games. These two changes would generate about $905.4 million in the next budget, according to the governor's office.
Shapiro noted that five of Pennsylvania's neighboring states have legalized cannabis; any Pennsylvanian who wants to can simply cross the border to legally purchase the drug.
"We’re losing out on revenue that’s going to other states instead of helping us here," Shapiro said.
In addition, Shapiro is optimistic that the state can attract more business by cutting its corporate net income tax.
He also wants to eliminate three banking industry taxes and require those businesses to instead pay the corporate income tax.
He also called on closing the Delaware loophole; currently some businesses avoid taxes on specific revenues thanks to being headquartered in Delaware. The moves would raise $361.1 million in the year ahead, according to his office's estimates.
State Rep. Mike Schlossberg, D-Lehigh and the House majority whip, said he supported all the changes but recognized there may not be consensus from lawmakers — especially about legalizing pot.
He was more optimistic that changes could be reached on skill games. He said that allowing regulation would not only raise revenue but would serve as consumer protection; an overwhelming amount of the money comes from seniors, many of whom are on fixed incomes.
Republican leaders signaled their interest in passing gaming legislation last month, too.
"I think there's overwhelming agreement that we need to get something done," Schlossberg said of skill games.
Lehigh Valley shoutouts
Shapiro littered his address with a number of references to the Lehigh Valley.
While talking about last year's historic increase in school spending, he mentioned visiting Harrison-Morton Middle School in Allentown and listening to students in the band playing their new instruments.
The Allentown School District received an additional $90 million in funding from the funding reform.
While talking about the importance of the life science sector, Shapiro cited the impact of B Braun, a Hanover Township, Lehigh County, company that makes medical supplies and pharmaceuticals. The business sourced $200 million in materials and equipment from other Pennsylvania businesses, supporting jobs across the commonwealth.
When talking about workforce development, Shapiro discussed the importance of jobs for Pennsylvanians with disabilities. He mentioned Bethlehem's Bitty & Beau's Coffee as an example of the opportunities some have seized on. The chain of cafes employs more than 400 people with disabilities across 18 locations in 11 states.
Shapiro stressed the efforts the state was doing to protect the state's agriculture sector from Highly Pathogenic Avian Influenza, a highly contagious and fatal virus in birds that's spreading across the country.
He acknowledged, however, that a Lehigh County farm was the state's first case of the virus in a commercial flock this year.
