BUILDING PRENNSYLVANIA'S FUTURE: GOVERNOR SHAPIRO'S 2025-2026 BUDGET AND ITS IMPACT ON UNION CONSTRUCTION

CHARLIE GOEHL, ASSOCIATE, GOVERNMENT AFFAIRS | GBCA

Each year, Pennsylvania’s governor delivers a budget address outlining the state’s financial plans for the upcoming fiscal year, highlighting past achievements and setting priorities for the year ahead. For the 2025-2026 fiscal year, Governor Josh Shapiro’s address underscored a commitment to economic growth, workforce development and strategic investments — many of which will have tangible impacts for GBCA members and the union construction industry in Philadelphia.

Fast-Tracking Economic Development

Governor Shapiro emphasized the success of Pennsylvania’s Permit Fast Track process, citing Hilco’s Bellwether District project as a prime example. This initiative is designed to streamline approvals for major economic developments, reducing red tape and accelerating project timelines. For union contractors, this means more opportunities for large-scale infrastructure and commercial projects that drive job creation and regional economic stability without some of the burdens of the past in the permit approval process.

The governor also pointed to Spark Therapeutics in Philadelphia when discussing Pennsylvania’s potential to become a leader in life sciences. The state aims to close the life sciences gap by investing in research, development and construction of specialized facilities. Many GBCA members are already engaged in projects like the one at Spark Therapeutics and this being mentioned by Governor Shapiro signals continued opportunities in this growing sector.

Investments in Workforce Development and Education

One of the most notable takeaways from the budget is its strong emphasis on workforce development, a crucial factor in addressing ongoing labor shortages in the construction industry. Key investments include:

• An additional $5.5 million for Career and Technical Education (CTE) programs, supporting students pursuing skilled trades.

• A $25 million increase in funding for school repairs, ensuring safer and more modern educational facilities.

• A new $12.5 million Workforce and Economic Development appropriation, building upon the $65 million already allocated to CTE programs and apprenticeships.

These investments not only help train the next generation of construction professionals but also create more projects that require skilled union labor.

Strengthening Pennsylvania’s Business Environment

Governor Shapiro announced several measures aimed at attracting and retaining businesses in Pennsylvania, which could lead to increased construction opportunities. A key initiative is the $3 million allocation for the Marketing to Attract Business program, which aims to encourage businesses to relocate to or expand within Pennsylvania. A recent success story includes Adare Pharma Solutions, which moved from New Jersey to Northeast Philadelphia, creating demand for commercial construction and facility upgrades. Additionally, the governor’s

plan to gradually reduce the Corporate Net Income Tax (CNIT) by 0.75% over the next two years will result in a 4.99% tax rate by 2029. This reduction aims to make Pennsylvania more attractive for businesses, potentially leading to more construction projects across various industries.

Investing in Innovation and Infrastructure

To maintain Pennsylvania’s competitive edge, the governor proposed significant funding for innovation and infrastructure. A combined $95 million will be invested in innovation and life sciences, fueling the state’s growth in high-tech industries and leading to the construction of cutting-edge research and manufacturing facilities. Increased funding for public works projects suggests a strong commitment to infrastructure improvements, benefiting union contractors and construction professionals statewide.

What This Means for Union Construction

Governor Shapiro’s 2025-2026 budget address presents a positive outlook for the Philadelphia union construction industry. With increased funding for public works, workforce development and business attraction, union contractors can anticipate new projects and expanded opportunities in both commercial and public sector construction.

However, the extent to which these initiatives translate into real-world benefits will depend on political negotiations and final budget approvals. GBCA will continue to monitor developments and advocate for policies that support union construction, ensuring that our industry remains a cornerstone of Pennsylvania’s economic growth.