Excerpted from a report by Capitolwire:
Gov. Josh Shapiro is set to release his fourth budget address Tuesday, kicking off a new budget season just three months after the 2025-26 budget deal was completed and just as Shapiro’s campaign for re-election ramps up.
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Republicans fought successfully in 2025 to get Shapiro to agree to drop an effort originally launched by his predecessor Tom Wolf to have Pennsylvania enter into the Regional Greenhouse Gas Initiative — a cap and trade program that uses taxes on polluters to pay for clean energy investments.
Shapiro rolled out his own energy plan last year, as well. But while permitting reforms have been enacted, other major parts of the plan, such as a proposed statewide
board to expedite approval for large-scale energy projects, sputtered. “The need to bring new power generation online has perhaps never been more acute,” Adam Walters, senior energy advisor for the state Department of Community and Economic Development, said at a hearing on the plan last summer. He said the statewide board would bring a balanced statewide approach to new energy projects and require approval of applications in 90 days.
But trade groups representing local government officials opposed the RESET board proposal, and the proposal has drawn ire from citizen groups around the state concerned about the rapid growth of data centers. The need for more state revenue has business groups bracing themselves for new attempts to add taxes on natural gas drilling, as well.
Thursday, the Pennsylvania Chamber of Business and Industry and a coalition of other business groups sent a letter urging Shapiro to resist proposals from Democrats to enact a new severance tax on natural gas drilling. Pennsylvania has collected impact fees, based on the number and age of wells, but doesn’t collect a tax on the volume of gas produced by those wells. Democrats have long sought to implement the severance tax, which would generate much more revenue, and allow for more of the proceeds to be redirected around the state.
“Proponents often point to Texas as a model, but that comparison ignores key facts. Texas has no corporate income tax, no personal income tax, and a legal and regulatory environment built for speed and certainty. Pennsylvania’s overall tax and regulatory landscape is fundamentally different, and comparing one tax in isolation ignores the broader competitiveness picture,” the groups said in their letter.
Publication: Capitolwirehttps://www.pachamber.org/wp-content/uploads/2026/02/Pennsylvania-budget-season-begins-with-focus-on-school-funding-and-Medicaid-pressures.pdf