What the Final 2025-26 State Budget Means for PA Kids and Families
The state spending plan for 2025-26 totals $50.1 billion, a 4.7% increase over the enacted 2024-25 budget. The pros outweigh the cons in the final budget for Pennsylvania children and families; during a difficult fiscal climate, legislators and the governor prioritized addressing the workforce crisis in the early care and education sector. Level funding for Career and Technical Education (CTE), Head Start Supplemental Assistance Program (HSSAP), home visiting programs, and County Child Welfare give us an advocacy roadmap for next year’s state budget.
Investments for Children and Families in the Proposed 2025-26 Pennsylvania Budget
Learn more by exploring the investments by policy area.
Early Care and Education
Pre-k
The pre-k investments in the 2025-26 state budget are truly a mixed bag for early learning programs. Pre-K Counts is receiving a $9.5 million increase to bring full-time students rates from $10,500 to $10,748, a 2.7% increase. This falls short of the $17 million increase for rates proposed by Gov. Shapiro in February that would have increased full-time student rates to $11,000. HSSAP unfortunately received level funding, as was proposed in the governor’s Executive Budget. This lack of parity in rate increases for both Pennsylvania’s pre-k programs must be addressed in future budgets to account for the rising cost of educating our commonwealth’s youngest learners.
Child Care
A newly created budget line with $25 million in recurring state funds for recruitment and retention payments to child care teachers is the early learning highlight of the state budget. This fund, championed by the Start Strong PA Campaign, will begin to address the child care workforce crisis by paying child care teachers working in programs that serve subsidy children at least $450 per year. With this investment, Pennsylvania is joining 18 other states that are directly investing in recruitment and retention efforts in the early care and education sector. The Child Care Services and the Child Care Administration lines are both level funded. The Human Services Code contains language to child care subsidy eligibility to align with federal law and codifies language and appropriations that have been included in previous budgets to allow families to stay in the Child Care Works Program up to 300% of the Federal Poverty Level (FPL).
Perinatal and Child Health
Medicaid and CHIP
The final budget includes a net decrease of $942,000 for CHIP, a 1% decrease to last year’s funding level. This decrease is due to funds allocated in 2024-25 to cover CHIP arrearages that are no longer required this fiscal year. As the number of children enrolled in CHIP continues to increase, PPC will continue to advocate for the state to maintain this important health insurance coverage. This budget contains a total of $747 million in new funding for Pennsylvania’s Medicaid Managed Care program: this includes rate increases for managed care plans and dedicated funding for direct care workers, all while making no changes to the current Medicaid program. The impacts of HR 1 will begin to be felt in the 2026-27 state budget and PPC will advocate on behalf of children and families to maintain Medicaid services in the commonwealth.
Early Intervention
Early Intervention Programs in Pennsylvania received a total increase of $41.7 million in this year’s state budget. Specifically, $13.2 million of the increase is allocated for the Part C (Infants and Toddlers) program in the Department of Human Services budget, with $10 million of these funds directed to increase provider rates to address key challenges in the sector, including workforce shortages. The remainder of the combined increase provides an additional $28.5 million for the Part B (age three to five) program in the Department of Education budget. Early Intervention is a critical component of the early care and education system, as all children from birth through age five with developmental delays, regardless of family income level, must be identified, referred to, and provided necessary services to help them and their families reach their fullest potential.
Home Visiting
The final budget follows the governor’s budget proposal in flat funding evidence-based home visiting lines, including the Community-Based Family Center line and the Nurse-Family Partnership line. The lack of increased, recurring state investments prompts concern over potential future cuts in services for families currently enrolled in a home visiting program. There is still a significant unmet need for services, with only 7% of eligible pregnant women, young children, and families currently receiving them. PPC acknowledges that increasing access must happen in a way that home visiting programs can be effectively implemented.
Child Welfare
The child welfare budget line is level-funded in the 2025-26 state budget. This flat funding is the result of a needs-based budgeting process and can be attributed to multiple factors, including absorbing the cost of the response for COVID-19 and underspending due to staffing shortages.
K-12
Basic and Special Education
K-12 education had another blockbuster budget year with a total increase of $670 million: $565 million as the second installment of adequacy funding via the Ready to Learn Block Grant and $105 million to be distributed through the Basic Education Funding Formula. There is also an increase of $40 million for Special Education and $100 million for school safety and mental health grants. This budget estimates $178 million in savings to school districts from cyber charter funding reform.
The Public School Code bill contains language to mandate evidence-based reading instruction and intervention plans for students in a big win for literacy advocates. The 2025-26 budget will utilize $10 million in funding to support schools in implementing evidence-based reading curricula.
Career and Technical Education
After the historic $30 million increase for CTE in the 2024-25 budget, PPC was disappointed to see no additional funding for either CTE line in the 2025-26 budget. As more students seek different pathways to employment after graduation, additional funding is critical to increase access to CTE programs across the commonwealth.
School Food Services
The final budget does not contain the governor’s proposed $10 million to continue the current free school breakfast and expanded free school lunch programs. PPC is reviewing the discrepancy between the governor’s proposed increase and the level-funding appropriated in the final budget and any impact that may have on universal free school breakfast and expanded free school lunch.