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Without a Budget, Pennsylvanians May Not Have Much to Be Thankful for This Year

Acknowledging that a plan to resolve the five-month budget impasse is in "deep peril," Gov. Wolf on Monday blamed Republican legislators for the potential collapse of a tentative agreement and urged them to launch a new effort to save the deal.

By Angela Couloumbis and Chris Palmer

Acknowledging that a plan to resolve the five-month budget impasse is in "deep peril," Gov. Wolf on Monday blamed Republican legislators for the potential collapse of a tentative agreement and urged them to launch a new effort to save the deal.

"One of the blessings we cannot count on [this Thanksgiving] is a budget," Wolf said. "All I want is to restart the bipartisan framework we had agreed to."

His comments came after a weekend in which the so-called budget framework appeared to implode, scuttled by a lack of support among lawmakers for a property tax reduction that was central to the deal.

Instead, a number of Republicans and some Democrats appeared to favor eliminating property taxes entirely and replacing the revenue with another form of taxes, such as increases in sales and income tax. A bill promoting such a plan is expected to come up for a vote in the state Senate as soon as Monday, though its fate is unclear.

Addressing reporters at a monthly press luncheon, Wolf said Republican leaders let him know late last week the deal was collapsing. He said if they can't salvage it, they need to deliver him a new proposal by the end of next week.

"We need to end this nonsense," he said.

After months of stops and starts, Wolf and GOP leaders had predicted recently that they would finalize a budget as soon as next week, ending the impasse that has left schools, nonprofits, and other agencies relying on loans and credit to stay afloat.

In the wake of the new setback, Wolf would not say if he would consider a temporary budget to send money to ailing organizations who rely on state aid. But he did say his own plan would still include money for a property tax reduction.

Reducing property taxes was a major plank in the $30 billion budget deal that Wolf and GOP leaders announced earlier this month. It required a hike in the state sales tax from 6 percent to 7.25 percent, and would be coupled with changes to the state's pension system and sales of wine and liquor.

The estimated $2 billion that would be generated by a sales tax hike was expected to allow $400 million in new school funding, and to help offset a reduction in property taxes -- for decades the primary funding source for school districts.

Pennsylvanians now pay about $12 billion a year in property taxes. Republican legislators said the plan touted by their leaders called for reducing that total between 20 and 40 percent. But neither side has released details about how the cut would occur, and how schools district funding will be affected.

Stephen Miskin, spokesman for House Majority Leader Dave Reed (R., Indiana), said Monday that GOP leaders were "perplexed at the governor's comments."

"Until a few minutes ago, we thought we were working together and with a partner," Miskin said shortly after Wolf's remarks.

House Republicans still anticipated negotiating with Wolf under the terms of the existing framework, Miskin said. "We want to get this done," he said, adding that he believed discussions would continue as soon as Monday afternoon.

Several legislative officials have said one alternative now being examined closely as a way to raise new money is expanding the list of items that would be subject to the sales tax. As it stands now, there are dozens of exemptions.

While the various sides argued over the scope of the potential setback, several non-profit leaders rallied in the Capitol rotunda to urge lawmakers to finish the deal.

Terri Hamrick, who runs a domestic violence and sexual abuse shelter in Gettysburg, said she has had to turn away more than 180 people seeking refuge during the impasse.

And in recent weeks, she said, the organization, Survivors, whose budget relies largely on government funds, has stopped paying utility bills, seen its trash collection halted, and even been referred to collection agencies.

"Every day that there's a delay, the ripple of devastation keeps growing," Hamrick said, adding that the shelter could close for good by Christmas. "I'm looking at the faces of people who are being hurt every day."

(c)2015 The Philadelphia Inquirer

Caroline Cournoyer is GOVERNING's senior web editor.
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