Pennsylvania Governor requests $113M for innovation in his FY 2026 spending plan

Pennsylvania Gov. Josh Shapiro has asked the state legislature to inject $113 million into programs that support the commonwealth’s innovation economy—including $50 million for the PA Innovation Program, which provides a $30 million allocation specifically designated for the commercialization of life sciences and a $20 million fund to “support large-scale innovation, match federal awards to mitigate risks for start-ups, and leverage Pennsylvania’s best-in-class research and development assets.” Shapiro presented his FY 2025-2026 budget proposal and policy recommendations to state lawmakers in his Feb. 4 budget address.

The balance of the $113.5M injection for innovation includes:

• $17 million for the Ben Franklin Technology Development Authority which funds the nationally recognized Ben Franklin Technology Partners,
• full funding for Keystone Innovation Zone research and development tax credits, which offer early-stage tech and life sciences companies up to $100,000 annually in sellable tax credits from a statewide pool of up to $15 million,
• $25 million for Agricultural Innovation Grants
• $3.5 million for a Pennsylvania Regional Economic Competitiveness Challenge to improve economic development strategies and planning, and,
• $3 million to be distributed equally to the three PA Life Science Greenhouses.

“When it comes to innovation and high-tech investments in Pennsylvania, Ben Franklin is the tip of the spear—and has been for more than 40 years,” Ben Franklin’s Director of Statewide Initiatives Ryan Glenn said. “Sustaining this innovation economy means being aggressive. That’s why we are so pleased to see a budget plan that includes additional investments to grow our high-tech economy, build out our entrepreneurial ecosystem and create the jobs of tomorrow. The more we invest in innovation, the better the outcomes.”

Shapiro also proposed reforms to the Pennsylvania Economic Development for a Growing Economy (PA EDGE) Program—a collection of tax credit programs designed to attract new investment from businesses in critical manufacturing sectors, including semiconductors, biomedical, milk processing, and petrochemicals and fertilizers produced from natural gas. Since it was first passed into law in 2022, the EDGE credit has not been used by a single business and has left billions of dollars in new economic development on the table. 

The governor’s address called for continued emphasis on workforce development and energy. Shapiro reintroduced a plan to ensure the state’s power supply is stable while also expanding it by encouraging investments in clean energy technologies, which seeks to address the dual crises of climate change and energy affordability. To support workforce development, the governor called for creating a dedicated Workforce and Economic Development Network with an appropriation of $12.5 million (of which only $2.5 million is new money) and increasing state funding for Career and Technical Education or “Vo-Tech” to $5.5 million. Additionally, the governor called for a $2 million appropriation to create the Career Connect program—a statewide program to build internships with Pennsylvania companies to increase the availability of Pennsylvania internships and assist employers with talent recruitment and development efforts. 

All the governor’s proposed FY 2025-2026 budget investments in the state’s innovation priorities and policy recommendations for the commonwealth’s economic development activities align with Pennsylvania’s 10-year economic strategy released last year (see Feb. 8, 2024 Digest article).

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. (The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.