Pennsylvania would reduce corporate taxes and increase how much it invests to recruit new businesses, develop the workforce, and grow targeted sectors such as life sciences under the budget proposed by Gov. Josh Shapiro. 

His proposed spending plan for fiscal year 2025-26, which requires approval by the state Legislature, would allocate $65 million more for innovation, including $30 million for life sciences through coordination with research universities to help companies bring new technologies to market.

“When life sciences grow and thrive, we not only improve lives but other major industries, too,” Shapiro said during his budget address on Feb. 4, where he highlighted innovation occurring in the Lehigh Valley.

“Let’s take B. Braun, a leading life sciences company in the Lehigh Valley. They produce IV fluids, pharmacy products, and complex medical devices – and last year, they sourced $200 million in raw materials and equipment from over 100 Pennsylvania-based suppliers.”

Lehigh Valley is poised to benefit from increased state investment. The growing region is home to more than 170 life sciences business establishments – manufacturing facilities, labs, research centers, offices, and distribution centers – that employ more than 6,000 people.

"Governor Shapiro has brought a renewed focus to economic development," said Don Cunningham, President & CEO of Lehigh Valley Economic Development Corp. (LVEDC). "It's a competition with other states and regions to retain and attract high-value employers in desirable parts of the economy like the life sciences, advanced manufacturing, and the innovation sector. This budget continues to build upon the Commonwealth's new investment in making Pennsylvania competitive, which is good for the Lehigh Valley."

Lehigh Valley's life sciences sector has grown by about 50% over the last decade. In addition to B. Braun, Lehigh Valley is home to global brands Olympus, OraSure Technologies, Sharp, and Thermo Fisher Scientific, along with emerging startups such as Thread Bioscience and Ilico Genetics.

Life sciences is one of the key sectors identified for growth in Pennsylvania’s new economic development strategy, which Shapiro unveiled last year in the Lehigh Valley at OraSure Technologies.

The proposed budget would accelerate Pennsylvania’s graduated reduction of the Corporate Net Income Tax, reducing it to 4.99% by 2029, two years sooner than currently planned.

Pennsylvania businesses would realize $10.5 billion in total savings from that and other suggested tax cuts.

Workforce development is also prioritized in the proposed budget. In the past two years, the state has increased the amount of investment in workforce development by 50% and created more than 110 new pre-apprenticeships and registered apprenticeships.

For 2025-26, Shapiro is seeking a $5.5 million increase for career and technical education; $2 million to create a Career Connect program to build internships; and a dedicated $12.5 million Workforce and Economic Development Network appropriation that includes $2.5 million in new funding to train additional workers. 

The proposed budget also includes:

• An additional $5 million to incentivize business growth and job creation.
• A $3 million increase for business attraction marketing.
• Reorganizing parts of the Department of Community and Economic Development, reallocating $9 million and 38 positions into a streamlined business attraction program, BusinessPA Team.
• An increase of $13 million to support agricultural innovation.
• A $5 million increase for programming that helps people with disabilities find employment.
• Additional funding to support childcare services, so people have the support they need to work.
• Additional funding to address the shortage of health care workers in rural areas.
• Creation of a new, more flexible $10 million AdvancePA tax credit, by reallocating funding from three previous tax credit programs.
• A plan to create jobs in the energy sector and reduce energy costs.
• Starting programs and increasing funding to spur construction of more housing and make that housing affordable.