Corporate Hand-outs Cost Billions, Yield Minimum Return 

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Harrisburg, Pa., May 20, 2026 — Under Gov. Josh Shapiro’s 2026-27 budget proposal, Pennsylvania would spend $1.7 billion on corporate welfare programs. If lawmakers swapped corporate handouts for tax cuts, taxpayers could reap $530 per family of four annually, according to new analysis from the Commonwealth Foundation. 

Pennsylvania’s taxes and regulatory burdens are among the highest in the nation, driving out people and jobs.  

Rather than reform the commonwealth’s regulatory environment to be more investment-friendly, elected leaders budget over a billion dollars for targeted tax credits, subsidies, grants, and loan programs, picking winners or losers in the Pennsylvania economy—often based on political connections.  

One of the state’s largest corporate welfare programs, the Redevelopment Assistance Capital Program (RACP), has taxpayers on the hook for billions of dollars in debt. Even worse, research finds RACP funded projects have “limited economic benefit.” 

No site better demonstrates the failure of government interventionism than the Volkswagen/Sony/Aquion plant in New Stanton. After fifty years and more than half a billion dollars from the state, all three companies left the site. 

Elizabeth Stelle, vice president of policy for the Commonwealth Foundation, offered the following statement in response: 

“Governor Shapiro is playing puppet master with the commonwealth’s economic future, and it’s to the direct detriment of taxpayers, employers, and workers. 

“Even with our vast land, ideal geographic location, and abundant resources, Pennsylvania lags behind its neighboring states in job growth, labor participation, and new investment. It’s no wonder that companies not favored by the state’s corporate welfare portfolio run for the hills to other states. 

“To rescue the commonwealth’s economic outlook, we must focus on cultivating a tax and regulatory environment that draws in competition and investment, for any and all businesses—not just a select few.  

“Pennsylvania can be an economic powerhouse, both nationally and globally, only if lawmakers take a lesson from the free market and let competition, not bureaucrats, direct future investments.”

Read the full report here.

Media clips to accompany this release can be downloaded here.