Commonwealth Foundation Releases Analysis on 2026-27 Budget Deal

Harrisburg, Pa., July 13, 2026 — Pennsylvania’s 2026–27 state budget deal is an “improvement over Gov. Josh Shapiro’s reckless proposal, but it still spends too much and leaves taxpayers facing an even larger long-term structural deficit,” according to analysis by Nathan Benefield, Commonwealth Foundation’s Chief Policy Officer.  

Benefield, a budget expert with over two decades of experience studying and analyzing the Pennsylvania state budget, writes:  

The Budget Avoids the Worst-Case Scenario  

“Shapiro proposed a $53.3 billion spending plan and sought to balance it by illegally draining $4.6 billion from the Rainy Day Fund. That would have drained emergency reserves at the very moment Pennsylvania faces rising Medicaid costs, continued spending pressure, and a multibillion-dollar structural deficit.  

“The budget deal avoids that mistake. The $52.2 billion budget deal reduces Shapiro’s request by $1.2 billion—and over the course of the past four years, the legislature has cut Shapiro’s proposed spending by a combined $3.6 billion.” 

Deficit Still Remains the Top Concern 

“This deal avoids the worst-case scenario but should not be mistaken for fiscal discipline.  

“While the official balance sheet shows a $50.849 billion budget, the true spending number to compare is $52.170 billion—as $1.3 billion in Medicaid costs were deferred, simply moving those costs to the next fiscal year.  

“The $52.2 billion in ongoing costs represents $4.9 billion more than recurring revenue, increasing the structural deficit.   

“While the deal protects the Rainy Day Fund and prevents tax hikes for another year, unless lawmakers control spending growth, reform major cost drivers, and impose real fiscal discipline, Pennsylvania will face the same budget fight again next year.” 

Public School Spending Spikes with No Expanded Educational Opportunities 

“Unfortunately, the budget deal does not meaningfully expand educational choice.  

“That is a missed opportunity. Pennsylvania’s Educational Improvement Tax Credit and Opportunity Scholarship Tax Credit programs help tens of thousands of students attend schools that better meet their needs. 

“One major concern is the $896 million increase in state support for public education, including $530 million in adequacy funding without meaningful reforms. Pennsylvania already spends $24,000 per student, yet too many students remain trapped in underperforming schools.  

“A better budget would pair any public school funding increase with serious accountability and an expansion of school choice.” 

View Benefield’s full analysis here.  

To schedule an interview with Benefield, please contact Giana DePaul at (215) 859-0384 or gmd@commonwealthfoundation.org.