Pennsylvania’s newly approved 2026-27 budget builds on Gov. Josh Shapiro’s commitment to creating jobs and growing the economy that has garnered the state national recognition. 
The pro-business, bipartisan budget that was approved by the General Assembly on July 12 reduces business taxes, invests in workforce development, prioritizes site readiness and small business corridors, and creates a new program to drive growth in the life sciences, a strategic sector for both Pennsylvania and the Lehigh Valley.
“We have the only growing economy in the Northeast, and we jumped four spots on CNBC’s “Top States for Business” rankings – the highest Pennsylvania has been ranked in 15 years – and working with the private sector, we created more jobs than all but two states in the entire country,” Shapiro said.
The $51 billion budget includes:
- Continued reduction of the Corporate Net Income Tax rate, to 6.99%. The rate has dropped by 25% since 2022 and is scheduled to reach 4.99% in 2031. Businesses will save an estimated $2.9 billion with the latest tax cut.
- A 5.3% increase to $37 million for the state’s primary flexible economic development funding source, PA First, which allocates project-based grants to support job creation and retention, workforce training, site development, and major private-sector investment.
- $13 million for Manufacturing PA, a program that advances innovation and workforce development.
- $20 million for Main Street Matters, which supports small business corridors.
- An increase of $10 million for career and technical education.
- A 2.2% increase for Pennsylvania’s unified economic development partnership, BusinessPA, led by the Department of Community and Economic Development, which works to recruit new businesses and help current businesses expand.
- $10.88 million for Partners for Regional Economic Performance (PREP), a program that helps fund Pennsylvania's network of regional economic development organizations, enabling partners such as Lehigh Valley Economic Development Corporation (LVEDC) to help businesses grow, invest, and create jobs.
- An 18.8% increase, to $23.75 million, in Historically Disadvantaged Business Assistance.
- A requirement that data centers using more than 10 megawatts of power annually disclose their energy and water usage.
The budget creates the $125 million Innovate in PA 2.0 program to encourage growth in life sciences by providing capital for promising startups, funding clinical trials, and supporting workforce development partnerships and regional venture studios. The program will be financed with the sale of tax credits to insurance companies.
That investment comes as the largest life sciences project in Pennsylvania history prepares to break ground in the Lehigh Valley, a $3.5 billion pharmaceutical manufacturing campus by Eli Lilly and Company. The Lilly campus in Upper Macungie Township will create 850 jobs, 2,000 construction jobs, and infuse an estimated $14 billion into the regional economy.
"The Lehigh Valley already has many of the ingredients life sciences companies are looking for, including a strong manufacturing base, outstanding educational institutions, and a collaborative business community,” said Kristin Cahayla-Hoffman, Vice President of Business Development & Attraction at LVEDC. “Innovate in PA 2.0 strengthens those advantages. We commend Governor Shapiro and the General Assembly for making a strategic investment in Pennsylvania's future."
Rick Siger, Secretary of the Pennsylvania Department of Community and Economic Development, said the budget “continues our work to make Pennsylvania the most competitive place in the nation to grow a business, create jobs, and build vibrant communities.”
“By investing in the people, places, and industries that drive long-term growth — and by continuing to make government work at the speed of business — we are strengthening Pennsylvania's competitiveness and creating new opportunities in every corner of the Commonwealth,” he said.
(Photo by Rick Kintzel)