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State of the State: 2025 vs 2026
Governor Josh Shapiro -- comparing priorities year over year
Pennsylvania 2025 vs. 2026: Governor Shapiro's Shifting Priorities
Governor Shapiro's 2026 address reflects a maturation of his economic development agenda and a notable pivot toward defending state interests against the federal government. While the 2025 speech laid out an ambitious domestic policy agenda — legalizing adult-use cannabis, regulating skill games, closing the Delaware Loophole, accelerating Corporate Net Income Tax cuts, and investing $526 million more in education adequacy — the 2026 speech largely drops these specific legislative asks in favor of celebrating economic wins and confronting new external threats. The most striking new priority is a proposed $100 million Federal Response Fund to buffer Pennsylvania against Trump Administration funding cuts, with Shapiro noting he took the federal government to court 19 times and won each time, recovering billions in threatened funding for homeland security, rural healthcare, SNAP benefits, and school infrastructure.
Economic development framing shifted dramatically from aspirational to triumphant. In 2025, Shapiro cited $3 billion in private sector investment secured during his tenure and proposed $65 million for innovation including $30 million for life sciences. By 2026, he claimed $39 billion in private sector investment — "more than the previous 15 years, combined" — and touted specific landmark deals like Eli Lilly's $3.5 billion manufacturing hub in the Lehigh Valley and the "largest life sciences deal in Pennsylvania history." Revenue collections were running $417 million above projections, and the state's bond rating had been upgraded twice, saving taxpayers over $200 million.
Public safety received substantially more emphasis in 2026, evolving from brief mentions of crime being down and trooper training into a fully developed policy pillar. Shapiro cited violent crime down 12 percent and fatal gun violence down 42 percent, highlighted that Philadelphia and Pittsburgh had their fewest homicides in decades, and proposed funding four more PSP trooper classes, expanding violence prevention through the Lieutenant Governor's BOOST initiative, and creating $30 million in competitive grants for fire company infrastructure. He emphasized that dollar-for-dollar, the state invested as much in community violence prevention as in training new troopers.
Conversely, several headline priorities from 2025 were completely absent in 2026. There was no mention of adult-use cannabis legalization (which had been a centerpiece proposal projecting $1.3 billion in revenue over five years), no mention of skill game regulation, no reference to the Delaware Loophole or accelerated CNIT tax cuts, and no specific education adequacy funding number comparable to the 2025 figure of $526 million. The 2026 speech instead summarized education progress broadly — funding up nearly 30 percent, attendance and graduation rates rising — without proposing a specific new investment target. The tone shifted from a governor pushing a bold legislative agenda to one defending accumulated gains against federal disruption while leveraging economic momentum.
New Priorities in 2026
- +Proposed a $100 million Federal Response Fund to mitigate impacts of federal funding cuts or withholding, citing 19 successful lawsuits against the Trump Administration over homeland security, SNAP, healthcare, and school infrastructure funding.
- +Proposed $30 million in competitive grants for fire company infrastructure, highlighted by the deteriorating 100-year-old Allentown firehouse, expanding beyond existing Commonwealth fire company funding.
- +Emphasized the BOOST initiative led by Lieutenant Governor Davis to expand afterschool programs as a violence prevention strategy, paired with equal investment in community violence prevention and PSP trooper training.
- +Called for sustainable, recurring mass transit funding beginning in 2027, after providing a two-year bridge for the state's two largest transit systems — a more concrete and urgent framing than 2025's general transit support language.
- +Highlighted defending Pennsylvania's interests against federal government overreach as a core gubernatorial responsibility, framing it as protecting $158 billion in annual federal taxes paid by Pennsylvanians.
Dropped from 2025
- −Adult-use cannabis legalization was a centerpiece of the 2025 address — projecting $1.3 billion in revenue over five years and calling for expungement of nonviolent possession convictions — but was entirely absent in 2026.
- −Skill game regulation and taxation, including charging the Gaming Control Board with oversight and recovering an estimated $200 million in Lottery losses over five years, was not mentioned in 2026.
- −The proposal to close the Delaware Loophole, which Shapiro said 28 other states had already closed and affected 11 percent of businesses avoiding their fair share, was dropped from the 2026 address.
- −Accelerating Corporate Net Income Tax cuts by two years and eliminating three outdated bank taxes (one dating to the Lincoln era) were specific 2025 proposals not revisited in 2026.
- −The $526 million specific additional investment through the education adequacy formula was not repeated; education was discussed in summary terms (nearly 30 percent increase) without a new dollar figure.
- −The REMAP Initiative to review government programs for inefficiencies and the comprehensive review of Commonwealth-owned and leased properties to save tens of millions were not mentioned in 2026.
- −Specific agriculture priorities including doubling the Ag Innovation Fund and the $60 million Hi-Path Avian Influenza recovery fund for poultry farmers were absent from the 2026 address.
- −Creation of new state parks — including Lehigh Gorge State Park expansion for Glen Onoko Falls and Pennsylvania's first underground state park at Laurel Caverns (the 125th state park) — was not mentioned in 2026.
- −America's 250th birthday celebration planning and tourism investment, which were featured priorities in 2025, received only a passing historical reference in 2026.
Shifted Emphasis
- ↔Economic development shifted from laying out a five-pillar strategy (energy, agriculture, manufacturing, robotics/technology, life sciences) with $65 million in proposed innovation funding to celebrating massive results: $39 billion in private sector investment, the Eli Lilly $3.5 billion deal, and $417 million in above-projected revenue.
- ↔Public safety evolved from brief 2025 mentions of 800 new state troopers and declining crime into a major policy section in 2026 with specific statistics (violent crime down 12%, gun violence down 42%), proposals for four new trooper classes, expanded violence prevention funding, and the new $30 million fire company grant program.
- ↔Mass transit went from a general 2025 statement that 'my budget delivers to keep our mass transit running' to a more urgent 2026 framing acknowledging the governor personally arranged a two-year bridge for the two largest transit systems and calling for permanent sustainable funding starting in 2027.
- ↔The bipartisan cooperation theme remained but gained a new dimension in 2026 — Shapiro explicitly asked Republicans and Democrats to unite against federal government overreach, whereas 2025 bipartisanship was framed entirely around domestic policy achievements.
- ↔Life sciences shifted from a 2025 aspiration (identifying a void between Bay Area/Boston, proposing $30 million to help commercialize patents) to a 2026 victory lap, citing the largest life sciences deal in state history and the Eli Lilly investment as proof the strategy worked.
- ↔Tax policy shifted from detailed 2025 proposals (accelerating CNIT cuts, closing Delaware Loophole, eliminating bank taxes, projecting $10.5 billion in cuts by 2029) to a single brief 2026 line that 'we're cutting taxes — not raising them' without any new specific proposals.
Policy Topics Addressed
Affordability
Governor Shapiro emphasized economic growth with $417 million more in revenue than projected and highlighted middle-class tax relief, workforce development, and infrastructure investment. He noted the state has attracted $39 billion in private sector investment — more than the previous 15 years combined — and proposed sustainable mass transit funding as critical to economic competitiveness and affordability. He also emphasized housing construction, energy production, and proposed a $100 million Federal Response Fund to mitigate federal funding cuts.
Agriculture
Governor Shapiro noted that Pennsylvania has more young farmers under the age of 35 than any other state in the nation, calling it a point of pride. He highlighted the state's all-of-the-above energy strategy and concerns about tariffs hurting farm equipment costs.
Economy & Jobs
Governor Shapiro reported creating over 21,500 jobs and securing over $39 billion in private sector investment in three years—more than the previous 15 years combined. He highlighted Eli Lilly's $3.5 billion Lehigh Valley investment and collected $417 million more in revenue than estimated. He emphasized Pennsylvania's bond rating going up twice, saving taxpayers over $200 million, and proposed sustainable transit funding for economic competitiveness.
Education
Governor Shapiro highlighted a nearly 30% increase in education funding, expanded vo-tech, CTE, and apprenticeships, and noted rising school attendance and graduation rates. He emphasized that more young people are finding passion in the trades and called for continued investment, noting Pennsylvania has more young farmers under 35 than any other state. The address focused more broadly on economic development and affordability but positioned education investments as foundational.
Government Reform
Governor Shapiro proposed creating a $100 million Federal Response Fund to mitigate federal government actions threatening state services, and highlighted that the state's bond rating went up twice, saving taxpayers over $200 million. He emphasized the need for sustainable, recurring mass transit funding and proposed $30 million in competitive grants for fire company infrastructure.
Healthcare
Governor Shapiro noted his administration fought back against federal attempts to withhold healthcare funding for rural communities and won in court. He mentioned continued investment in violence prevention and community safety as connected to public health outcomes.
Housing
Governor Shapiro did not make housing a major standalone topic in his budget address but referenced it within the broader context of economic development and affordability.
Infrastructure
Governor Shapiro cited over $39 billion in private sector investment creating 21,500 jobs in three years, emphasizing infrastructure as key to economic competitiveness. He called for sustainable, recurring mass transit funding beginning in 2027 and proposed $30 million in competitive grants for fire company infrastructure improvements, noting that the state's bond rating increased twice, saving taxpayers over $200 million.
Public Safety
Governor Shapiro reported violent crime down 12% and fatal gun violence down 42%, with Philadelphia and Pittsburgh experiencing their fewest homicides in decades. He highlighted nearly 2,000 more cops funded, expanded afterschool programs, and violence intervention initiatives. He proposed funding four more classes of PSP troopers and increasing commitment to violence prevention, noting dollar-for-dollar equal investment in prevention and trooper training. He also proposed $30 million in competitive grants for fire company facility upgrades.
Social Services
Governor Shapiro proposed a $100 million Federal Response Fund to mitigate future federal actions threatening services Pennsylvanians rely on. He highlighted violence prevention investments totaling $97 million through the Commission on Crime and Delinquency, including afterschool programs and community-based violence intervention. He also proposed $30 million in competitive grants for fire company infrastructure upgrades.
Tax & Budget
Governor Shapiro highlighted collecting $417 million more in revenue than estimated due to economic growth, two bond rating upgrades saving $200 million, and securing $39 billion in private sector investment in three years. He proposed a $100 million Federal Response Fund to mitigate future federal funding disruptions and emphasized not raising taxes. He called for sustainable, recurring funding for mass transit beginning in 2027.
Technology
Governor Shapiro highlighted semiconductor investments and advanced technology job creation, noting Pennsylvania landed the largest private sector investment in Commonwealth history. He mentioned the DRIVE Act for research and science investment and called for workforce training in AI and advanced manufacturing, positioning Pennsylvania to compete in quantum and AI partnerships.