Your Chamber advocacy team is working to share legislative updates and continue to advocate for your business in Washington, D.C., Harrisburg, and Philadelphia. We’ve created a round-up of recent activity, including Key Takeaways for Your Business and a Detailed Legislative Update. This represents our best knowledge of the situation as of 9:00 a.m. on Friday, February 13, 2026.

Chamber members are invited to join weekly legislative update calls hosted by our advocacy team to hear the latest legislative matters concerning our community.

KEY TAKEAWAYS FOR YOUR BUSINESS

State

  • Pennsylvania Governor Josh Shapiro unveiled his $53.3 billion budget proposal for fiscal year 2026-27, representing a $2.7 billion (5.4%) increase over current spending. To balance the budget amid modest revenue growth projections, the plan relies on a $4.6 billion withdrawal from the state's nearly $8 billion Rainy Day Fund, supplemented by approximately $2 billion in new revenue. 
  • The governor's plan maintains two major business-friendly tax reforms: the scheduled reduction of the Corporate Net Income Tax rate to 6.99% by 2027 and the phased increase of the Net Operating Loss deduction limit to 60%.  
  • The budget makes significant investments in mass transit, education, infrastructure, and innovation. It proposes a $300 million annual transfer to the Public Transportation Trust Fund starting in 2027, boosts education funding by more than $600 million, commits $1 billion in bond-financed infrastructure projects, and creates a $100 million "Innovate in PA 2.0" fund to support biotech, life sciences, and early-stage companies. 

DETAILED LEGISLATIVE UPDATE

State: Updates from Harrisburg

Governor Shapiro Delivers His Budget Proposal 

 Pennsylvania Governor Josh Shapiro unveiled his $53.3 billion budget proposal for fiscal year 2026-27, representing a $2.7 billion (5.4%) increase over current spending. To balance the budget amid modest revenue growth projections, the plan relies on a $4.6 billion withdrawal from the state's nearly $8 billion Rainy Day Fund, supplemented by approximately $2 billion in new revenue. 

 2026-27 Governor's Executive Budget 

2026-27 Budget in Brief 

2026-27 Proposed Budget General Fund Appropriation 

The new revenue would come from several previously proposed but unenacted measures. These include mandatory combined reporting for corporate tax filers (projected to generate $328 million), legalizing adult-use cannabis ($730 million), regulating and taxing skill games ($766 million), and implementing a $15 minimum wage (estimated to produce $30.1 million in personal income tax and $23.4 million in sales tax revenue). 

Republican lawmakers sharply criticized the proposal as fiscally unsustainable, arguing that such significant spending increases are unrealistic given the state's projected deficits in both the current and upcoming fiscal years. The Independent Fiscal Office projects Pennsylvania will exhaust its budget reserves by the end of fiscal year 2027-28, potentially necessitating broad-based tax increases. Under current policy, the FY 2026-27 deficit is projected to reach $6.7 billion. 

Notably, the governor's budget preserves two key pro-growth tax reforms: the scheduled reduction of the Corporate Net Income tax rate to 6.99% in 2027 and the phased increase to 60% in the Net Operating Loss deduction carryforward limit. These reforms, championed by the Chamber and through the CompetePA Coalition position the state for enhanced economic competitiveness. Please consider joining CompetePA, a coalition representing businesses that employ over half of Pennsylvania's private-sector workforce, which will be very active in protecting against changes to CNIT and NOL schedules while advocating against enactment of combined reporting. 

Other notable investments in the governor's budget include: 

  • Mass Transit: $300 million transferred from sales tax revenues to the Public Transportation Trust Fund beginning July 1, 2027, with SEPTA projected to receive $183 million in year one. 
  • Education: $50 million increase in Basic Education Funding plus an additional $565 million adequacy gap payment. 
  • Infrastructure: $1 billion in critical investments across energy, housing, school facilities, and local governments, financed through bond issuance. 
  • Innovation: $100 million "Innovate in PA 2.0" fund, through the sale of $350 million in Insurance Premium Tax Credits at a reduced rate to generate immediate capital to invest in the Commonwealth's biotech/life sciences. 

The Chamber has called on lawmakers to unlock and catalyze the state's vast potential through the creation of an innovation fund that would leverage and scale Pennsylvania's existing strengths. An independent economic impact modeling shows that our $2 billion, 10-year proposal could yield an impact of up to $40 billion and generate as many as 75,000 jobs within Pennsylvania's advanced industries in ten years. The Governor's Innovate in PA 2.0 would: 

  • Provide capital for venture funds that invest in early-stage companies 
  • Develop the executive leadership pipeline in life sciences and biotech industries 
  • Support clinical trials for emerging technologies in the life sciences sector 
  • Develop and expand programs at DCED to leverage federal funding and technological innovations for our ecosystem of universities, workforce, and tech startups 

Housing Action Plan Released 

On Thursday, February 12, Governor Shapiro announced the results of his 2024 Executive Order to develop a statewide Housing Action Plan that would "contain goals, objectives, and recommendations to the governor on strategies to increase and preserve the housing supply across the Commonwealth."  

The plan – a 10-year roadmap to address the housing shortage across the Commonwealth – focuses on increasing the stock of safe and livable housing, providing pathways to housing affordability, and easing regulatory and operational burdens. Specific policy priorities under each of five strategic areas can be found in the full Housing Action Plan and accompanying press release.  

The Chamber recognizes access to housing as a key pillar of quality of life, talent attraction, and workforce retention. We were pleased to represent the business community in the development of this plan and look forward to working with the General Assembly to inform its implementation.  

Budget Hearings 

Budget hearings are scheduled from February 23 through March 12 to examine the Governor's budget proposal for FY 2026-27. Both the House and Senate Appropriations Committees will conduct comprehensive reviews of state agencies and programs. The hearings reflect a systematic approach to scrutinizing the state budget, with both chambers examining workforce development programs, higher education funding, and core government operations across nearly three weeks of testimony. 

The Pennsylvania Senate Appropriations Committee condensed its budget hearing schedule to two weeks as part of an effort by leadership to explore more efficient ways for the committee to conduct its work. This condensed timeline is a departure from the three-week schedule used in previous years. 

Events

Build and strengthen relationships at our Congressional Staff Reception on Friday, March 13, 2026. As legislators prepare to make impactful decisions on transportation, research funding, and other key issues, this is a unique and timely opportunity to inform offices about the priorities shaping the Greater Philadelphia business community. Among the many guests invited are chiefs of staff, state and district directors, and legislative directors serving southeastern Pennsylvania, southern New Jersey, and northern Delaware. Register here. 

Market your business: Sponsor one of the Chamber’s advocacy events. Gain exposure and build promising relationships with top-level business professionals, civic leaders, and elected officials. Learn more about our upcoming local, state, and federal advocacy sponsorship opportunities here or contact Laura Williams, Manager, Member and Investor Relations, at lwilliams@chamberphl.com to learn more.

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We invite you to reach out to our advocacy team directly with your questions:

Chamber members are invited to join weekly legislative update calls hosted by our advocacy team to hear the latest legislative matters concerning our community.