- Associated Press - Tuesday, June 23, 2015

HARRISBURG, Pa. (AP) - A top Pennsylvania House Republican softened the GOP’s stance Tuesday on Democratic Gov. Tom Wolf’s opposition to privatizing the state-controlled wine and liquor system, saying disagreement over it would not hold up passage of state budget legislation.

House Majority Leader Dave Reed’s comments came a day after other top Republicans, including House Speaker Mike Turzai, accused Wolf of negotiating in bad faith and insisting that he do more to embrace GOP pension and liquor proposals before a budget is discussed.

“Liquor can be pushed to the side, it can be taken off the table as part of a final budget discussion,” said Reed, R-Indiana.

But he also warned that Wolf would be ignoring $200 million a year that Republicans believe they can extract from privatization, largely by leasing the state’s wholesale wine and liquor distribution business.

“It’s going also to have a ripple effect on the other budget negotiations,” Reed said. “We’re just going to have less money to be able to put into education and other items. … If that’s where it has to end up, that’s where it has to end up.”

With eight days until the start of Pennsylvania’s next fiscal year, the House and Senate had no major votes scheduled, and the likelihood of a budget stalemate is growing.

In a statement, Wolf’s press secretary, Jeffrey Sheridan, said Reed’s claims about using a privatization bill to fund education “should not be printed or even accepted as possible until the Republicans put out a full plan that addresses the deficit.”

“The Republicans can claim that everything can be used to fund everything, but they don’t have a real plan that moves Pennsylvania forward,” he said. “No more double counting or gimmicks.”

Wolf has proposed increasing spending through the state’s main bank account by about 9 percent to $31.6 billion, largely to wipe out a large deficit, boost public school aid and meet rising pension and health care costs. He also proposed billions of dollars in reduced corporate and school property taxes by raising state taxes on income, retail sales, Marcellus Shale natural gas production, tobacco and banks.

Republicans have balked at a tax increase and maintain that it is not absolutely necessary.

Republicans are scrambling to get an agreement on a wine and liquor privatization plan between the House and Senate GOP after several years of trying and failing under Wolf’s predecessor. Wolf flatly opposes privatizing the system and has instead sought changes to the system to make it more profitable. Those supposed profits would help save $8 billion over 24 years by financing a bond to restructure part of the state’s pension debt.

Reed also played down disagreements between Wolf and Republicans over how to save money in the state’s two major public employee pension systems. Reed said significant progress has been made between the sides, while Turzai, R-Allegheny, and Senate President Pro Tempore Joe Scarnati, R-Jefferson, criticized Wolf for opposing key elements of the Senate GOP’s pension bill, including ending the traditional pension benefit for future state and school employees by shifting them into a 401(k)-style retirement plan.

Wolf responded earlier by accusing Republicans of holding his budget plan hostage to “booze” and dismissed the criticism as almost like “schoolyard stuff.”

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