Pennsylvania Gov. Josh Shapiro's 4th budget proposal calls for minimum wage increases, cannabis legalization
Pennsylvania Gov. Josh Shapiro delivered his fourth budget address at the State Capitol in Harrisburg Tuesday, just three months after last year's budget was passed by state lawmakers.
The $53 billion proposal includes funding for initiatives like cannabis legalization and minimum wage increases, along with hundreds of millions for education. Shapiro's full address can be viewed on our YouTube channel.
Mass transit
The 2026-27 budget aims to secure more mass transit funding by transferring 1.75% of sales and use tax revenue to the Pennsylvania Transportation Trust Fund starting July 1, 2027.
According to the governor's office, this would generate more than $300 million annually for transportation services across the state.
Last year, Shapiro announced nearly $220 million in capital funding for SEPTA to support safety and infrastructure improvements, nearly two weeks after the 2025-26 budget passed without additional mass transit funding. The transit agency was faced with several service setbacks in 2025, most notably federally mandated inspections on its Silverliner IV railcars that took hundreds of trains out of commission over several months and a strike threat that eventually ended in a deal between SETPA and the Transport Workers Union Local 234.
Minimum wage increase
Shapiro is again calling on lawmakers to approve a minimum wage hike in Pennsylvania. The state's minimum wage has remained at the federal level of $7.25 per hour since 2009.
During his address, Shapiro said the state Senate has "refused to act" on minimum wage hikes after the House of Representatives passed legislation to do so twice.
In 2026, New Jersey saw its minimum wage increase to $15.92 per hour — up $0.43 — for most employees. Delaware's minimum wage was increased to $15 at the start of 2025.
The governor says the proposed minimum wage hike — which would go into effect on Jan. 1, 2027 — would add about $80 million in annual revenue. Shapiro claimed that the increase would also save the state $300 million per year on entitlement programs like Medicaid.
"We can put more money in their pockets so they don't need Medicaid anymore," he said.
Legalizing cannabis
The governor's proposal would see adult-use cannabis legalized as soon as July 1, 2026, and regulated sales begin on Jan. 1, 2027. Shapiro says sales would generate more than $200 million in tax revenue annually.
The governor is also proposing that people incarcerated for only cannabis possession-related offenses have their records immediately expunged. The budget includes $10 million for "restorative justice initiatives" and $25 million to help new and small businesses entering the cannabis market.
Last summer, a bipartisan bill was introduced in the House of Representatives that would establish a "stable, well-regulated cannabis market that prioritizes public safety and public health, protects children from exposure, promotes social justice and fosters economic opportunity."
There's been no movement on the bill since July 14, 2025, when it was moved to committee.
No tax hikes
According to the governor's office, the budget proposal does not include any tax increases.
In his proposal, Shapiro highlighted the Working Pennsylvanians Tax Credit, which was created by the 2025-26 budget. The governor said in its first year, the credit will provide $193 million in tax relief.
What was included in last year's budget?
The 2025-26 budget was passed by the Pennsylvania House and Senate in November 2025 after months of delay in the politically divided legislature. Republicans currently have the majority in the state Senate; Democrats hold a narrow majority in the state House.
Shapiro, a Democrat, told KDKA in Pittsburgh that his administration was working to speed up the budget approval process for the upcoming year.
Once passed, the $50 billion state budget included more funding for certain school districts, a 4.1% combined increase for the Pennsylvania State Police budget and more money for the State Food Purchase Program.