What the 2026-27 State Budget Means for PA Kids and Families
The enacted state spending plan for 2026-27, HB 2400, totals $50.8 billion, a 1.4% increase over the 2025-26 budget. Amidst a continued difficult fiscal climate, several key investments were made to benefit Pennsylvania children and families. Modest increases in pre-k rates, additional funding for the Child Care Recruitment and Retention program, and support for career and technical education highlight the governor and General Assembly’s commitment to Pennsylvania children and families. Level funding for home visiting programs and a cut for Infant/Toddler Early Intervention will inform our advocacy strategy for future state budgets.
Investments for Children and Families in the 2026-27 Pennsylvania Budget
Learn more by exploring the investments by policy area.
K-12
Basic and Special Education
The final budget includes a total increase of over $623 million for K-12 education: $565 million as the third adequacy investment via the Ready to Learn Block Grant and $58 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 budget contains an additional $55 million for Special Education.
The Public School Code bill, HB 1505, contains multiple provisions that will benefit Pennsylvania students. Included in the legislation is a Legislative Budget and Finance Committee study on standardized testing; the review will gauge how Pennsylvania’s use of standardized tests complies with federal requirements and provide a holistic study of the cost and efficacy of testing in the commonwealth. Additionally, the School Code bill contains language on truancy provisions for students in charter and cyber charter schools and requires wellness checks for them and students enrolled in school district-based virtual programs.
Career and Technical Education
Last year’s budget disappointingly contained flat funding for career and technical education (CTE). The final 2026-27 budget includes a $10 million increase for the CTE subsidy program, and the CTE Equipment Grant line was level-funded. While the subsidy increase is lower than the governor’s proposed increase of $14.3 million, during tumultuous fiscal times, it is important that the General Assembly prioritize funding for CTE programs. The Public School Code bill contained language from SB 366, which would allow students enrolled in CTE programs to take the NOCTI exam before grade 12. PPC supported this bill as it moved through the Senate, and we applaud its inclusion in the School Code.
School Food Services
The budget 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 a nutritious breakfast improves academic performance. PPC is pleased that the universal free breakfast program will be maintained, as we see the benefit of universal school meals
Other Initiatives
The budget builds on previous investments by continuing $100 million for school security and student mental health grants. The budget also contains an additional $10 million investment in early literacy funding, despite the lack of dedicated literacy funds in Governor Shapiro’s February state budget proposal. Unfortunately, increased funding for Out-of-School Time was not included in the budget. 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. The governor’s proposal called for a $1 million increase for Out-of-School Time programs.
Early Care and Education
Pre-k
The final state budget includes small increases for Pennsylvania’s pre-k programs: $3.75 million for a rate increase in the Pre-K Counts program and an additional $1 million for the Head Start Supplemental Assistance Program (HSSAP). While this is less than the $9.5 million proposed by the governor ($7.5 million for Pre-K Counts and $2 million for HSSAP), 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 are grateful for the inclusion of these additional funds in the final state budget.
The Public School Code bill contains several provisions pertaining to the Pre-K Counts program, including a requirement that Pre-K Counts providers to provide a minimum of 180 days or 900 hours of pre-kindergarten instruction over the course of the school year. This will provide additional flexibility for providers and align the program with K-12 requirements. Also included is the language from the original underlying bill that adds intermediate units to the definition of “eligible provider” in the Pre-K Counts program. Under current law, only IUs that hold federal Head Start grants are automatically qualified as eligible Pre-K Counts applicants.
Read more about these investments.
Child Care
The final budget builds on the momentum of the 2025-26 state budget by increasing the Child Care Recruitment and Retention fund by $5 million, bringing the total appropriation for the program to $30 million. This will boost the minimum retention payment from $450 to at least $540 per child care teacher. In his February proposal, Gov. Shapiro proposed a $10 million increase. The Fiscal Code bill contains language requiring DHS to approve applications within 60 days and requiring providers to distribute retention bonuses within 45 days of receiving the funds. This modest increase is a step in the right direction towards solving Pennsylvania’s child care crisis, but more must be done to build a robust early learning sector to support Pennsylvania families and the economy. The Child Care Assistance line also received a modest $1.1 million increase to continue program operations.
Health, Nutrition, Early Intervention and Home Visiting
Early Intervention
The final budget includes a $5.2 million cut to infant and toddler Early Intervention in the Department of Human Services budget. Although policymakers have indicated they intend to use remaining funds from the current fiscal year to prevent service reductions, the 2.6% decrease creates confusion and uncertainty for families and providers alike. PPC will continue to advocate for increased EI rates to ensure the program’s stability, which is federally mandated to provide services to all eligible children.
Preschool Early Intervention in the Department of Education budget received an additional $41.2 million, representing a 9% increase.
The Early Learning PA coalition, of which PPC is a member, issued a budget reaction press release recapping activity, particularly in the areas of child care, pre-k, Head Start, and Early Intervention.
Medicaid and CHIP
The 2026-27 state budget contains a $5.6 million increase for the Children’s Health Insurance Program over the 2025-26 revised budget total. This will cover an increasing number of enrolled children and provide increased rates for CHIP insurance companies.
The final Medical Assistance capitation line contains a net increase of $484 million. The 2026-27 budget reintroduced a Medicaid MCO payment delay as a cost-saving measure; both HealthChoices and Community HealthChoices MCOs will be paid by the state the month after services are provided to their members. MCO payment delay is touted as saving the commonwealth $2.6 billion over two fiscal years.
The budget addresses the implementation of a portion 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 Medicaid services for individuals exiting correctional facilities.
The governor’s proposed minimum wage increase was not included in the final budget. The budget proposal included savings for the state’s Medicaid program due to a minimum wage increase. There is also no additional detail 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.
Home Visiting
The final 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), the funding needed to backfill SNAP administrative expenses resulting from HR 1 is included in the final budget and spread across several budget lines. The Fiscal Code bill, SB 146, includes language requiring DHS to transition SNAP access cards to chip-enabled technology no later than January 1, 2028, and the budget includes $7 million to support this effort. PPC supports this provision as it will safeguard nutrition benefits for Pennsylvanians who need it most.
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. There are no additional funds in the final state budget to support maternal health services in the commonwealth.
Child Welfare
The county child welfare budget line contained a surprising $50 million increase, which is labeled as support for the needs-based budgeting for counties. The governor proposed level funding for the line in February. Gov. Shapiro’s proposed increase for ChildLine enhancements was included in the final budget at a total cost of $658,000. An increase of $242,000 in the DEOH budget was allocated to the Health Promotion and Disease Prevention line, which is below the originally proposed $2.5 million to fund additional staff positions to support the Child Death Review program.