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Jul 7, 4:00 PM EDT

Wolf attacks GOP budget, while senator pins stalemate on him



HARRISBURG, Pa. (AP) -- Gov. Tom Wolf stood behind his demand for a new state budget, while a top Republican lawmaker on Tuesday said the week-old stalemate will last as long as Wolf insists on an income and sales tax increase to prop up state spending.

The first-term Democratic governor told KDKA-AM in Pittsburgh that it might have been popular or easy to sign a $30.2 billion document passed solely by Republican state lawmakers, but it also would have been irresponsible.

"We can't put up with this," Wolf said. "We need to get serious about putting the finances of Pennsylvania in order."

He cited the state's five credit downgrades by three rating agencies in the past three years and said, "That's going to continue unless we get serious about presenting honest financial statements and doing the budget the right way."

Wolf's veto, his first as governor, and the continuing budget stalemate has left the government with limited spending authority since its new fiscal year began a week ago.

On Tuesday, Senate Majority Leader Jake Corman, R-Centre, told reporters that talks are stuck on Republican opposition to Wolf's request for tax increases on sales and income.

"We're not going to be for that, we're not going to be for that any time," Corman said after meeting with Wolf in the governor's Capitol offices. "So I think it needs to be made very clear that this is going be a while as long as the governor holds on to the need for a broad-based tax increase. ... That's the issue."

Corman did not rule out other kinds of tax increases, and he said Republicans are open to helping Wolf meet his goals, within reason. Wolf did not speak to reporters after the meeting.

Senate leaders on Tuesday changed plans and will reconvene the chamber on Monday. The House remained scheduled to return to Harrisburg on Aug. 25.

Republicans who control the Legislature are pitting their no-new-taxes budget that relies partly on transfers and delayed payments against Wolf's request for billions of dollars in tax increases to finance a record boost in public school aid and erase a long-term deficit that's damaged the state's credit rating.

Negotiations between Wolf and top Republicans effectively stalled in June. The effort to restart talks comes as outside groups launch an air war. Last week, an affiliate group of the Washington, D.C.-based Democratic Governors Association began airing a radio ad featuring Wolf in Philadelphia and Pittsburgh.

In it, Wolf bashes Republicans for passing a "fantasyland" budget that doesn't cut property taxes, sticks Pennsylvania with a $3 billion deficit, maintains bottom-of-the-barrel state support for public schools and leaves Pennsylvania as the only major gas-producing state that doesn't charge the oil and gas industry an extraction tax.

On Monday, Americans for Prosperity, an Arlington, Virginia-based advocacy group founded by the conservative billionaire energy executives Charles and David Koch, began running a radio ad in Harrisburg and Pittsburgh that says Wolf is "cooking up schemes to hike your taxes."

"Help us freeze his tax-hiking schemes to spend more of your hard earned money," the ad's narrator says.

Last week, Wolf vetoed the GOP's $30.2 billion budget package, saying it balanced by putting off payments for school construction and child welfare programs, shortchanged schools and deepened a long-term deficit. No Democrats supported the bill.

Wolf's proposal for a $31.6 billion budget package is designed to wipe out the long-term deficit, make payments on time and send about $600 million more than the Republican plan to public schools, universities and early childhood education programs. It would require higher taxes on income, sales, Marcellus Shale natural gas drilling, banks and sales of tobacco products.

Wolf also wants approval of a $3.2 billion property-tax cutting package that would rely on higher income and sales taxes. Movement on that has stalled in the Senate.

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