Shapiro takes aim at AI chatbots, data centers in $53B budget plan
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Brendan Lynch/Axios. Photo: Mark Makela/Getty Images
Gov. Josh Shapiro laid out his $53.2 billion budget blueprint Tuesday, along with a wish list of new rules for data centers and artificial intelligence chatbots.
The big picture: This could be a make-or-break year for the first-term Democratic governor.
- He's up for reelection in deep purple Pennsylvania, where President Trump and Republicans dominated in 2024.
- And Shapiro's not-so-secret presidential ambitions are on the line. They will be politically buoyed or wounded depending on how he and state Democrats fare at the polls this year.
Driving the news: Shapiro unveiled his plan, which would hike state spending roughly 6% over last year, during an address to state legislators in Harrisburg.
What's new
⚡ Data center regulations: Under his plan, data center owners would need to pay for their own energy consumption, commit to community engagement, hire locally and pledge to high environmental standards, including regarding water consumption.
- Pennsylvania has become a hub for data centers, fueling an AI boom with no end in sight. But the boom has led to strong community pushback and concerns over data centers' massive energy consumption.
🤖 AI chatbots: Shapiro's proposals around protecting children from AI chatbots included mandating age-verification requirements and prohibiting AI chatbots from producing sexually explicit or violent content involving children.
📱Cellphone ban: The governor called for a ban on student cell phone usage while in school.
💰 Federal response fund: Shapiro wants $100 million from the state's rainy day fund to create a standing war chest aimed at guarding against federal overreach and compensating for unexpected funding cuts.
- His administration argues the fund is necessary to protect Pennsylvania, noting it has sued the Trump administration 19 times to claw back billions in federal funding cuts that could have disrupted critical services.
- Yes, but: The Republican-led Senate is unlikely to support creating a piggy bank to bankroll Shapiro's legal and political fights with Trump and the Republican-controlled Congress.
What else: Shapiro also doubled down on some of his past policy goals, including:
- 🌿 Legalizing adult-use recreational cannabis
- ⚡ A series of legislation, dubbed the Lightning Plan, which includes a new cap-and-trade program to limit carbon emissions.
- 🎰 Regulating and taxing so-called skill games — frequently found at gas stations and stop-and-gos.
- 💵 Raising the minimum wage to $15 an hour (up from $7.25)
🗳️ Zoom out: Not only is Shapiro on the ballot this year, but all 203 seats in the state House and half the Senate are, too.
⚔️ What we're watching: Whether Pennsylvania's divided government passes a spending plan by the July 1 deadline.
- Their track record hasn't been great during Shapiro's tenure. That includes last year, when political gridlock derailed a state budget for more than four months.
What they're saying: Shapiro acknowledged in his address that last year's budget took too long, resulting in "real impacts on Pennsylvanians."
- The governor said he will be meeting with legislative leaders Wednesday to kick-start budget negotiations.
The other side: Republican legislative leaders quickly questioned the size, scope and cost of Shapiro's budget.
- House Republican Leader Jesse Topper said in a released statement that the plan "spends too much, grows government too much and relies too much on unsustainable sources of revenue."