Pennsylvania budget sends Philadelphia schools more than $157 million while expanding city sales-tax collection

Pennsylvania’s enacted 2026-27 budget will send more than $157 million in additional funding to the School District of Philadelphia and require certain out-of-city and online sellers to collect Philadelphia’s 2% local sales tax on deliveries to the city, according to Mayor Cherelle L. Parker’s office.

The Pennsylvania General Assembly approved the budget and Gov. Josh Shapiro signed it before Parker issued a statement on July 13. The development is a state-budget action, not a new Philadelphia City Council vote or a city tax-rate increase.

Additional funding for Philadelphia schools

Parker’s office said the budget provides more than $157 million in additional funds for the School District of Philadelphia. The statement did not provide a line-item breakdown of that amount.

According to the mayor’s office, the funding marks the third consecutive year of increased adequacy funding associated with the Commonwealth Court’s school-funding ruling. The office said the additional money is helping to close Philadelphia’s reported $1.2 billion adequacy gap.

The statement does not say that the new state funding fully closes that gap, and the reported funding figure should not be read as money generated solely by Philadelphia revenue.

The state action comes after City Council gave final passage to Philadelphia’s $7.1 billion FY27 city budget on June 11. The city fiscal year began July 1, 2026. In announcing that city budget’s final passage, the Office of the Director of Finance said the city remained committed to identifying recurring revenue for school positions.

Collection rule changes for qualifying sellers

The state budget also changes how Philadelphia’s local sales tax is collected on certain deliveries. The mayor’s office said out-of-city and online sellers that already collect Pennsylvania’s 6% sales tax on deliveries to Philadelphia will also be required to collect the city’s additional 2% sales tax.

The change concerns collection obligations for qualifying sellers; the city’s local rate remains 2%, while the state sales-tax rate cited by the mayor’s office is 6%. The available city statement does not establish a precise implementation timetable or estimate how much additional revenue the expanded collection rule will produce annually.

It also does not support the broader conclusion that every online seller will newly be subject to the requirement. The stated rule is limited to out-of-city and online sellers already collecting the Pennsylvania sales tax on deliveries to Philadelphia.

For Philadelphia, the enacted budget therefore combines a new infusion of state school funding with a change intended to extend collection of the existing local sales tax to covered remote transactions. The next implementation details, including timing and any revenue projections, were not included in the reviewed statements.