- Associated Press - Tuesday, July 5, 2016

HARRISBURG, Pa. (AP) - Negotiators reported no agreement on financing state government’s $31.5 billion budget plan as top lawmakers met privately and apparently fruitlessly Tuesday in the quiet state Capitol five days into the state’s fiscal year.

The state House of Representatives and Senate weren’t scheduled to resume session Tuesday as a divide over election-year tax increases dragged out negotiations between Democratic Gov. Tom Wolf and the Republican-controlled Legislature.

House Majority Leader Dave Reed, R-Indiana, joined a brief meeting with other top lawmakers and said he could not predict whether an agreement was imminent, or even possible, this week.

Under discussion are higher taxes on cigarettes and other tobacco products, as well as a huge expansion of casino-style gambling.

The first budget go-around between Wolf and the Legislature resulted in a record-breaking stalemate that was finally resolved in April. Reed downplayed any comparison between that stalemate and the fight over Wolf’s second budget, saying negotiators are “light years” ahead.

“Last year at this time nobody was even talking, let alone having a spending plan in place,” Reed said.

Wolf stayed out of sight Tuesday.

To some extent, House Republicans are isolated in the negotiations, and the spotlight has fallen on their willingness to agree to a big enough revenue deal to satisfy Wolf, Democratic lawmakers and Senate Republicans.

House Republicans, late last year, revolted against a bipartisan budget deal with Wolf. That ultimately led to Wolf allowing a Republican-penned budget plan to become law to end the stalemate, even though he disliked it enough to withhold his signature.

Negotiators say more than $1 billion is necessary to balance the state’s deficit-riddled finances. But Democrats and House Republicans have feuded over the source of that money, as well as the amount of money necessary.

Lawmakers last week sent the main spending bill in the budget package to Wolf, but the governor has said he would not sign it without sustainable revenues to fund it. He has until midnight on July 11 to make a decision before it becomes law without his signature.

Still pending in the House are five spending bills authorizing nearly $600 million for state-subsidized universities: Penn State, Temple, Pitt, Lincoln and Penn.

Rep. Eugene DiGirolamo, R-Bucks, said Wolf has options open to him, should no deal materialize in the coming week. Wolf could use his power of line-item veto authority to balance the budget, and leave it to lawmakers to find the money to fund the items he struck.

He also said that, if he were the universities, “I would be a little bit concerned right now.”

House Republicans have continued to back a proposal built on higher tobacco taxes, back taxes from tax delinquents, the expansion of legalized gambling and the expectation of brisker wine and liquor sales under a new law that liberalized alcohol policies.

Republicans have all but killed any election-year consideration of increasing taxes on income, sales or Marcellus Shale natural gas production, and neither the Senate nor the governor has countered with a competing revenue package.

However, Senate leaders have been cool to a bill passed last week by the House that would make Pennsylvania the fourth state to legalize internet gambling and authorize satellite slot-machine casinos at off-track betting parlors and airports.

Meanwhile, Democrats have advanced the idea of reviving a gross receipts tax on the natural gas delivered to nearly 3 million homes and businesses. It was a 5 percent tax - or an estimated $55 per household - when it was eliminated in 2000.

House Republicans have balked at the idea.

Rep. Kate Harper, R-Montgomery, said it could be political suicide for lawmakers so close to the November election to vote for a tax as broad-based as the gross receipts tax, especially since Pennsylvania is once again putting off talk of a tax increase on the shale drilling industry.

“That’s crazy,” Harper said. “I can write that mailer myself. That’s not right.”

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