Pa. budget talks to resume next week

HARRISBURG - Pennsylvania will operate without a budget until at least until next week, when Gov. Wolf and Republican legislators are expected to return to the negotiating table.

Wolf met briefly behind closed doors Wednesday with a scaled-down complement of legislative leaders, emerging to say that the sides will resume negotiations next week.

"There is mutual respect, and we are going into this the right way," Wolf said. "The arms are unfolded, and we understand that we have to reconcile our ideas."

Without a budget to guide spending for the new fiscal year, which began Wednesday, the state begins losing some of its authority to pay bills.

While employees will continue to be paid, and core health and public safety functions will be funded, government will soon have to halt payments to contractors as well as local governments and nonprofits that rely on state funds and provide a range of social services.

The legislature, too, will be affected in the event of a prolonged stalemate. The Assembly has reserve funds to help it pay its staff through an impasse, but those funds have dwindled over the last decade.

In the Senate, roughly $20 million is in reserve, money that would likely keep it operating through mid-September, said Drew Crompton, the top lawyer for Republicans, who hold the majority in the chamber.

Comparable figures for the House were not immediately available. Bill Patton, spokesman for House Democrats, said his caucus had about $10 million in reserve and could function at least through July.

House Majority Leader Dave Reed (R., Indiana) said he hopes the budget will be resolved "in weeks, not months."

"This is not going to be the year without a budget," Reed said.

Still, both sides were vague when asked what was spurring confidence that a resolution can be found quickly. The ideological differences between Wolf and Republicans run deep.

The governor on Tuesday evening vetoed a GOP-authored budget that would not have increased taxes and would have boosted funding for public schools, although not at the levels Wolf wants.

It marked the first time in more than 40 years that a Pennsylvania governor had struck down a budget in its entirety.

Wolf said he did so because he does not believe it adequately funds public education or provides property tax relief to homeowners.

Wolf has called for a nearly $1 billion hike for public schools, money that would be raised in part through a new tax on natural-gas drillers. His budget also would raise the state's personal-income and sales taxes to fund a major property-tax relief program for all school districts. (In Philadelphia, most of that money would be used to decrease the wage tax.)

Republicans have called Wolf's plan excessive and have said that any fiscal plan for the state must include a fix for rising pension costs and a plan to get government out of the liquor business.