- Associated Press - Saturday, April 18, 2015

HARRISBURG, Pa. (AP) - Pennsylvania measures its state budget deficit in the billions, is led by a Democratic governor and Republican Legislature who have much different ideas about policy and faces ballooning public sector pension payments that are squeezing the finances of state government and local school boards alike.

Those are some of the reasons why this is shaping up as a tough budget season, and several developments this week suggested the usual arm wrestling over the coming year’s spending plan may soon look more like pro wrestling.

Gov. Tom Wolf, now in his first year, has proposed raising billions of dollars in income and sales taxes to fill the budget hole, pump more money into education and job training and cut property taxes to make public school funding fairer. He also wants to raise taxes on natural gas drilling and cut corporate taxes.

Republicans in the House have been pushing their own property tax legislation, and in February passed a proposal to license the sale of wine and liquor by privately owned stores. Senate GOP leaders say making changes to the massive school and government pension systems are their biggest priority.

It was against that backdrop that Wolf and Republican legislative leaders met behind closed doors this week, agreeing to form staff working groups to focus on some of the bills that could end up in a budget deal. Those working groups have not been finalized, Wolf press secretary Jeff Sheridan said Friday afternoon.

Republicans say they are determined to pass something before the state’s fiscal year ends at midnight June 30, a deadline in the state constitution that sometimes gets missed, as it did a year ago.

“He’s been here before and budgets did not pass on time when he was revenue secretary,” Sheridan said. “What’s more important to him is that we have a final budget that addresses his priorities.”

House Majority Leader Dave Reed, R-Indiana, told reporters this week he would be willing to run Wolf’s full budget package on the floor, but it would not pass.

“I do not think there are any Republican votes for the governor’s budget as a whole,” Reed said.

Sheridan said Wolf’s budget contains ideas that Republicans have advocated for in the past, and he wants a vote on the whole package if Reed thinks it has enough support to pass.

Reed said his members may pass some type of budget by the end of June, even if it is not agreed to by the governor, so that government will continue to operate in the new fiscal year while negotiations continue.

Reed was noncommittal about whether he will support putting more money into public education, saying that’s a decision that will depend in large part on how tax collections come in during the next couple months.

Wolf, Sheridan said, “is not going to agree to a final product that does not include an investment in education. And he’s also very much committed to manufacturing and workforce development. We cannot continue down the path where we have, year after year, a fiscal crisis. And that’s what he inherited.”

Jennifer Kocher, a spokeswoman for Senate Majority Leader Jake Corman, R-Centre, said her members expect to introduce a pension bill in the coming weeks, adding a significant element to the deal-making.

“We’re in the infancy of this process,” Kocher said. “It’s something where everyone has their priorities, but my boss has acknowledged, and he has told the governor, ‘Look, you’re going to have to sign things you don’t like and I’m going to have to vote on things I don’t like.’ And that’s how we move forward.”

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Mark Scolforo covers state government for The Associated Press in Harrisburg. Email him at mscolforo@ap.org, or follow on Twitter: @houseofbuddy

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