What the Proposed 2026-27 State Budget Means for PA Kids and Families
Governor Shapiro’s proposed 2026-27 budget totals $53.3 billion, a 5.3% increase over last year’s budget. The proposal includes several bright spots for Pennsylvania’s children and families, including meaningful increases in child care, pre-K, and career and technical education. However, this is tempered by funding cuts for infant/toddler Early Intervention (EI) and level funding in home visiting.
Investments for Children and Families in the Proposed 2026-27 Pennsylvania Budget
Learn more by exploring the investments by policy area.
Early Care and Education
Pre-k
The budget proposal includes an increase of $9.5 million for pre-k programs: $7.5 million for Pre-K Counts and $2 million for the Head Start Supplemental Assistance Program (HSSAP). The proposed increase for Pre-K Counts will raise full-time students’ rates to $11,000 (up from $10,750) and part-time students’ rates to $5,500 (up from $5,375). The HSSAP per-child rate will be increased from $13,824 to $14,128 if the proposed increase becomes law. Increased rates for pre-k programs will help support the early care and education workforce and ease inflationary costs for providers. Following a handful of years of level-funding, the direct investment in HSSAP to help achieve rate parity with Pre-K Counts is a positive development. PPC and its partners in the Pre-K for PA campaign support these budget priorities and will work with policymakers to ensure they are included in the final product.
Child Care
The proposal builds on the momentum of the 2025-26 budget by boosting the Child Care Recruitment and Retention fund by $10 million, bringing the total appropriation to $35 million. The initial $25 million investment made in last year’s budget provided $450 to each licensed child care teacher and paraprofessional participating in the Child Care Works program. PPC and the Start Strong PA Campaign appreciate Gov. Shapiro for highlighting the workforce behind the workforce in his budget address and in his proposed executive budget. The budget also includes a total increase of $3.8 million split between two budget lines: $2.2 million in the Child Care Services line to provide an increase to the minimum wage, and $1.6 million in the Child Care Assistance line to continue program operations, reflect changes in cost sharing for administration of the SNAP program, and to address the increase to the minimum wage.
Perinatal and Child Health
Medicaid and CHIP
The proposal contains a $7.6 million increase for the Children’s Health Insurance Program (CHIP). This will cover an increasing number of enrolled children and provide increased rates for CHIP insurance companies. DHS estimates that the number of CHIP enrollees will increase by around 17,000 children during 2026-27.
The proposed Medical Assistance capitation line item includes a net increase of $566 million to fund Pennsylvania’s Medicaid program. This total budget increase includes funding to reflect changes in enrollment and rate increases, as well as a one-time funding transfer from the Joint Underwriting Association settlement.
The $15-per-hour minimum wage increase in this budget proposal is cited as affecting many areas of Pennsylvania’s budget. The executive budget specifically ties an increase in wages to reducing the number of individuals who qualify for Medicaid by an estimated 60,800 and explains that children in those families may instead qualify for CHIP for their health care coverage.
Further detail is limited on how the Commonwealth will offset reductions in federal Medicaid funding – especially as we approach several key implementation dates later in 2026. As the health care landscape remains fluid due to the impacts of HR 1, PPC will continue its work to ensure that all Pennsylvania children have health insurance coverage.
The budget proposal addresses the implementation of the state’s Keystones of Health Medicaid demonstration, which was approved by the federal government at the end of the Biden Administration. A total of $1 million is included to implement housing components of the waiver, which connects medically compromised individuals with stable housing. Additionally, $900,000 is included to implement food and nutrition initiatives related to the Food is Medicine proposal.
Early Intervention
The budget proposal includes a $5.2 million decrease to the Early Intervention Part C (infants and toddlers) program in the DHS budget. PPC and Thriving PA are concerned by the proposed reduction in funds, especially since DHS estimates that the number of children receiving infant/toddler EI services will increase in 2026-27. PPC will work with the legislature and administration to ensure that the necessary investments in infant and toddler Early Intervention are included in the final enacted budget.
The PDE budget’s Early Intervention Part B (ages three to five) program includes a proposed increase of $51.2 million to continue the current program.
Home Visiting
The proposed budget level funds the Community-Based Family Centers line for the fourth consecutive year. Because of inflation and other economic factors, this continued stagnant funding ultimately means fewer home visiting services for Pennsylvania families impacted by economic and social disparities. PPC advocates for evidence-based home visiting services through the Childhood Begins at Home Campaign and continues to be disappointed in the lack of support for home visitors who work alongside parents and caregivers to strengthen families over time. The Nurse-Family Partnership line item also includes a small reduction due to changes in the federal matching rate.
Nutrition
Consistent with last year’s budget, federal funding for the Department of Health’s WIC program is $277.9 million. This funding connects women and young children to nutritious food and nutrition counseling services. WIC is a vital part of Thriving PA, where PPC and our partners work with the administration to modernize the system and increase participation.
Specific to the Supplemental Nutrition Assistance Program (SNAP), nearly $87 million in state funds are included to reflect changes in the state-federal cost-sharing for SNAP administration. Like Medicaid, the proposed budget does not provide extensive detail on how the state will offset additional reductions in federal funding or implement changes to program requirements that will require an increase to DHS’s staffing complement.
Maternal Health
PPC and Thriving PA have been monitoring the implementation of Pennsylvania’s first Perinatal TiPS consultation line, which would allow medical providers who care for pregnant and postpartum women to connect with psychiatry consultation teams. The program is currently being funded with federal dollars, and we will closely monitor the implementation timeline and work to ensure DOH has the funding to continue the program in the future.
Child Welfare
The county child welfare budget proposal provides level funding, totaling $1.49 billion in state investments. However, Governor Shapiro’s budget address does call for a $658,000 increase in ChildLine call-taker staffing and training. Within the Department of Health budget, $2.5 million in increased funding is allocated to the Health Promotion and Disease Prevention line, with three proposed new staff positions to support the Child Death Review program. In his speech, the governor also noted his desire to prioritize updating the Child Protective Services Act, addressing overreporting to General Protective Services, and assisting families raising children with complex health care needs by strengthening coordination among mental health, child welfare, education, and other services.
K-12
Basic and Special Education
The proposed budget includes a total increase of over $615 million for K-12 education: $565 million as the third adequacy investment via the Ready to Learn Block Grant and $50 million to be distributed through the Basic Education Funding Formula. The targeted adequacy funding will continue to be distributed to the most underfunded schools. Additionally, the governor’s proposal calls for an additional $50 million for Special Education. The governor’s proposal also includes $75 million in additional estimated savings for school districts from further cyber charter tuition reform.
Career and Technical Education
Last year’s budget disappointingly contained flat funding for career and technical education (CTE). This year, Gov. Shapiro proposed a total increase of $14.3 million for CTE: $4.3 million to continue the current subsidy program and $10 million for high-quality STEM and computer science grants. There is no proposed increase for the CTE equipment grant line. The governor also called for reforms to reduce the overlap in course load requirements for CTE students and to allow them to take national competency exams as soon as they finish the program, rather than waiting until 12th grade.
School Food Services
The budget proposal includes an additional $14.3 million to continue universal free breakfast in schools. Continuing the free school breakfast program will help children reach their full potential, as research shows that having a nutritious breakfast promotes better academic performance. PPC is pleased that the universal free breakfast program will be maintained, as we see the benefit of universal school meals. We hope future budgets contain increased funding for universal school lunches.
Other Initiatives
The budget seeks to build on previous investments by continuing $100 million for school security and student mental health grants, as well as $125 million for facility improvements, including $25 million specifically for the Solar for Schools program. In addition, the proposal seeks to increase funding for the student teacher stipend program by $5 million, bringing total funding to $35 million. Despite the momentum from the previous budget’s school code, which included language requiring evidence-based reading instruction and $10 million for implementation, there is no additional funding for early literacy in the 2026-27 proposed budget. Similarly, increased funding for Out-of-School Time was not included in the budget proposal. The past few budgets have provided $11.5 million annually to the Pennsylvania Commission on Crime and Delinquency through the Building Opportunities Through Out-of-School Time (BOOST) grants program.