After a 135-day stalemate — the longest budget delay in the nation this year — Pennsylvania finally has a 2025-26 spending plan. The $50.1 billion budget, signed on November 12, comes with both opportunities and concerns for the trucking industry. It also arrives alongside significant legislative movement on rural infrastructure funding, which may turn out to be the most consequential legislative development for freight this year.

Below is a full breakdown.

The 2025-26 Budget 

The new budget increases state spending by 4.7% over last year, continuing a decade-long trend of rising General Fund expenditures. Supporters highlight that the budget remains technically balanced and preserves close to $8 billion in the Rainy Day Fund. Critics note that long-term spending growth outpaces recurring revenue, raising questions about future fiscal stability.

For the trucking industry, the budget contains several provisions worth noting.

Corporate and Individual Tax Changes

The budget continues the phased reduction of the Corporate Net Income Tax, lowering the rate to 7.49%. This is part of a coordinated, multi-year step-down from what was long one of the highest corporate tax rates in the country at 9.99%. The continued reduction is welcome news for carriers structured as C-corporations and for allied businesses that have long argued that Pennsylvania’s tax system hindered competitiveness.

It also creates a new “Working Pennsylvanians Tax Credit,” essentially a state-level Earned Income Tax Credit. Many entry-level employees in trucking — particularly drivers with dependents, shop employees, and administrative staff — will qualify for up to $805 in tax relief. Though not a trucking-specific measure, it may help support workforce retention in an industry squeezed by childcare costs and inflation.

Permitting Reform

Perhaps the most significant change affecting business operations is the budget’s substantial expansion of permitting reform. Building on last year’s SPEED initiative, this budget adds staff, tightens timelines, accelerates environmental reviews, and creates a public database to track permit applications.

These reforms are directly relevant for PMTA members. Terminal expansions, warehouse construction, truck parking development and expansion, maintenance shops, and even stormwater or air-quality approvals have historically been slowed by unpredictable permitting schedules. The new provisions require DEP to meet tighter deadlines and, in some cases, move to automatic approval if the agency fails to act. For an industry that depends on capital investment and operational growth, these changes may reduce delays that add cost and uncertainty.

Investments in Workforce Participation

The budget makes substantial investments in childcare — a major barrier to workforce participation in many industries, including trucking. A $25 million recruitment and retention initiative for childcare staff, along with increases to Pre-K reimbursement rates and continued employer childcare tax credits, may help alleviate staffing challenges that keep some potential employees out of the workforce.

There are also new resources for job training, tuition assistance, school mental-health programs, and other workforce-supporting programs. While these are broad initiatives, the trucking industry benefits indirectly when the state invests in stabilizing the workforce pipelines that support logistics, warehousing, and operations.

Site Development and Economic Investment

The budget continues to roll out the $500 million in site development funding approved last year. These dollars are aimed at preparing industrial and commercial sites for development — often a precursor to logistics hubs, distribution centers, and manufacturing projects. More than $113 million has already been awarded for “shovel-ready” sites across the Commonwealth.

For trucking companies and allied businesses, site development is one of the clearest predictors of future freight demand. As Pennsylvania positions itself to attract large-scale investments — including data centers, manufacturing campuses, and logistics facilities — trucking remains central to that economic growth.

RGGI

Importantly, the budget includes Pennsylvania’s official withdrawal from the Regional Greenhouse Gas Initiative (RGGI), which PMTA opposed due to its projected impact on energy costs and economic competitiveness. RGGI would have required power plants to buy carbon credits, a cost that inevitably would be passed along to consumers — including trucking companies, warehouses, and manufacturers that depend on affordable, reliable electricity. Its repeal removes a major source of regulatory uncertainty hindering economic growth and protects Pennsylvania’s position as an energy-producing state, helping ensure that trucking operations aren’t burdened by higher utility costs in an already challenging freight market.

State Police, Public Safety, and the Motor License Fund

The budget includes funding for four additional Pennsylvania State Police cadet classes and other public safety initiatives. Early analysis suggests that these investments do not reverse the hard-won phase-down of PSP reliance on the Motor License Fund, meaning highway dollars are not being siphoned off to support PSP operations — a critical priority for PMTA.

The budget contains no new dedicated transportation funding. This omission sets the stage for the separate bonding bill now advancing through the legislature.

The Rural Roads Bonding Bill: A Major Piece of the Infrastructure Puzzle

Just as the budget was finalized, the Senate Transportation Committee unanimously approved Senate Bill 1096, sponsored by the Committee’s Majority Chair Judy Ward. The bill authorizes $600 million in state bonds specifically to repair rural bridges on three- and four-digit state routes on the non-Federal highway system in Pennsylvania. Savings incurred from the bridge projects will be spent on improving these same roads — corridors that carry a significant portion of the state’s agricultural, timber, energy, and short-haul freight.

Why Bonding Is on the Table

Negotiators could not reach agreement on a broader transportation funding package during budget talks. Without new revenue sources, bonding emerged as the only politically viable path to deliver near-term infrastructure dollars without raising taxes, fees, or tolls.

What SB 1096 Actually Does

The bill authorizes $600 million in borrowing and directs PennDOT to develop a list of priority bridge projects based on condition, in consultation with the House and Senate Transportation Committee chairs. The focus is explicitly on rural and low-volume roads — many of which are weight-posted, tar-and-chip, or structurally deficient.

Senator Ward emphasized that federal formulas favor major interstate projects, leaving rural roads perpetually underfunded. Bonding is seen as a way to address those gaps more quickly.

How It Would Help Carriers

For trucking companies operating in rural Pennsylvania, the benefits are clear. Weight-restricted bridges force expensive detours and add operational complexity. Poorly maintained roads increase equipment wear and slow delivery times. By targeting routes that rarely make it onto PennDOT’s high-priority list, SB 1096 has the potential to improve access, reduce costs, and strengthen local supply chains.

The House has already passed a similar measure — House Bill 1788 — which includes $355 million in bonding and dedicates $125 million specifically for rural road repairs. If the two chambers reconcile their approaches, rural infrastructure may receive its largest infusion of support in years.

PMTA will continue to keep members updated as the bonding proposal moves through the General Assembly and as further details become available on how the budget’s provisions are implemented.