During his annual budget address Tuesday before members of the state House and Senate, Gov. Josh Shapiro called on lawmakers to build on the progress Pennsylvania has made over the past three years with further investment in key areas, including education, housing and economic development.

Shapiro’s budget “represents a starting point,” state Sen. Judy Ward, R-Blair, said in a statement.

“The governor’s budget proposal depends on accounting tricks and bad policy, such as transferring billions from our Rainy Day Fund and the legalization of recreational marijuana, while increasing government spending at an unsustainable pace,” Ward said.

“Over the next several months, Senate Republicans will work to develop a budget that is fiscally sound and responsible to the taxpayer,” Ward said.

The proposed 2026-27 budget totals more than $53.2 billion, a $2.7 billion or 5.4% spending increase over last year if approved by lawmakers. The budget anticipates $54 billion in federal funds and would draw down the state’s Rainy Day Fund from $7.8 billion to $3.3 billion, according to documents.

House Republican Caucus Leader Jesse Topper, R-Bedford, also said Shapiro’s proposal “spends too much, grows government too much and relies too much on unsustainable sources of revenue.”

Shapiro’s proposal of using $100 million from the Rainy Day Fund to create a Federal Response Fund was panned by Topper, who said he was “deeply concerned by the illegitimate use” of those funds to create what he called “a $100 million slush fund that obscures the lines of federalism.”

State Rep. Scott Barger, R-Blair, said that the proposed budget overspends beyond the commonwealth’s means.

“It might be helpful if the governor demonstrated a working understanding of basic economics and arithmetic before Pennsylvanians trust his evaluation that a 5.4% increase in spending is a good idea,” Barger said in a statement. “I wish this governor was as passionate about helping Pennsylvanians afford their exorbitant utility bills as he is about overspending us into a fiscal grave.”

Speaking before the General Assembly, Shapiro also proposed expanding the state’s investment in law enforcement, business start-ups and education, among other areas.

Shapiro pointed to two credit rating increases for the commonwealth; the creation of 21,500 jobs; attracting more than $39 billion in new private sector investment; and $417 million in additional collected tax revenue as indicative of the broad financial growth that has occurred under his leadership.

Revisiting past proposals

Shapiro also renewed his calls for an increase to the state minimum wage up to $15 per hour, plus regulation of skill games and adult-use cannabis, saying that these measures could generate more than $2 billion in new tax revenue annually.

According to Shapiro, creating or modernizing statutory standards for data center construction, AI use, project permitting and professional licensure will fuel the continued growth of the commonwealth.

Education funding has been a centerpiece of Shapiro’s previous three budgets, and his 2026-27 proposal is no different.

Shapiro’s proposal calls for an additional $565 million for the Adequacy Adjustment formula for historically underprivileged schools, plus $50 million increases for both the Basic Education Funding formula and Special Education Funding formula.

The proposed budget increases funding for career and technical education institutions by $18 million.

Additional funding for tech schools would be welcome, said Nicole Zernick, executive director of the Greater Altoona Career and Technology Center.

The added funds would help enhance equipment, opportunities for industry partnerships, industry credentials and postsecondary credentials.

“As a CTE, we are always encouraged by continued investment in CTE programs in order to provide additional opportunities for our students,” Zernick said.

The Pennsylvania State Education Association — a union representing over 175,000 education professionals — applauded the proposal for including “bold investments in public school students and the future of Pennsylvania.”

According to PSEA President Aaron Chapin, “This budget proposal reflects Governor Shapiro’s remarkably strong commitment to our public schools and the 1.7 million students they serve.”

“PSEA looks forward to working with Governor Shapiro and policymakers from both parties to remove barriers so that students can reach their full potential and to achieve other key priorities, including a COLA for retired school employees,” Chapin said in a statement.

Kirstie Stayduhar, a paraprofessional at Spring Cove Elementary School, attended the governor’s budget address and was quoted in the PSEA release stating that higher wages for school support staff will help address recruitment and retention issues.

As one of thousands of support staff in the state’s public schools earning less than $15 an hour, Stayduhar said it is difficult for her family to make ends meet.

A member of the Spring Cove Education Support Professionals Association, Stayduhar believes that higher wages would help her district and all public schools recruit and retain more support staff.

“Here at our school, I feel like if we raised support professional pay, we could get more people to want to be working in the school district,” she said. “We would have more paraprofessionals; we would have more support staff.”

Despite the lower pay, Stayduhar said her job is rewarding.

“I get to see all these kids thrive and reach their goals every day,” Stayduhar said. “That is the most important thing to me. That’s the reason I stay at this job.”

Lawmakers said they will be reviewing the budget proposal in the coming days and look forward to upcoming budget hearings.

“Our number one priority must be providing the foundation for substantial economic growth in the Commonwealth to balance any future state budgets,” Topper said. “We also must begin — right now — the hard work of reducing the size and scope of government so we do not continue to take too much from hardworking Pennsylvania taxpayers who are already struggling to make ends meet.”

Mirror Staff Writer Conner Goetz is at 814-946-7535.