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Pa. Gov. Wolf: Budget framework agreement in ‘deep peril’

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Gov. Tom Wolf responds reporters' questions after speaking at a Pennsylvania Press Club luncheon Monday, Nov. 23, 2015 in Harrisburg, Pa. Wolf urged Republican lawmakers to support a proposed deal to swap a state sales tax increase for $1.4 billion in school property tax cuts for homeowners . Republicans say they disagree with Wolf over which school districts should benefit most from the rebates. (AP Photo/Marc Levy)

HARRISBURG — A tentative agreement Democratic Gov. Tom Wolf struck with Republican legislative leaders to end a five-month budget impasse is in “deep peril,” the governor said Monday.

The fragile deal was further threatened by a Senate proposal aimed at eliminating school property taxes, which was more ambitious than the property tax reduction proposed in the tentative agreement. The amendment was voted down 25-24 with Lt. Gov. Mike Stack breaking a tie. Wolf said he didn't support it and would not have signed it.

Yet House and Senate leaders' offices said they cannot get enough votes for Wolf's plan to give Philadelphia a higher share of property tax relief compared with the rest of the state.

Wolf said GOP leaders told him last week that they cannot deliver the votes needed to pass the deal that would raise the state sales tax and cut school property taxes.

“Unfortunately, that framework looks like it is in peril, deep peril,” Wolf told a Pennsylvania Press Club luncheon. He acknowledged that his hope for signing a budget by Thanksgiving was ambitious. “One of the blessings we cannot yet count is a budget for the state.”

The stalemate hits its 147th day Tuesday.

The proposed budget deal would increase the sales tax from 6 percent to 7.25 percent — 8.25 percent in Allegheny County, and 9.25 percent in Philadelphia.

The proposal seeks to balance the budget and finance a record increase in public school aid, while providing $1.4 billion in rebates to home-owners for school property taxes. The plan was to transfer $600 million from gambling tax collections, used for property tax relief, to pay for spiraling public pension costs.

Wolf said he asked legislative leaders to persuade rank-and-file lawmakers to support the deal.

“It's time to deliver. Republicans need to find the votes for the bipartisan agreement we made,” said Wolf, who is in his first year as governor.

Senate Majority Leader Jake Corman, R-Centre County, said GOP lawmakers and Wolf won't support each other's proposals to distribute rebates.

A state sales tax increase was supposed to underwrite a property tax rebate.

Corman urged Wolf to move on from the fight and pass a budget that by law was due July 1.

“He is holding up a general fund spending bill over something — property tax relief distribution — that has no general fund impact,” said Jennifer Kocher, Corman's spokeswoman.

“That's flat-out untrue,” said Wolf's spokesman, Jeffrey Sheridan. “They can't deliver on anything.”

Stephen Miskin, a spokesman for House Majority Leader Dave Reed, R-Indiana County, said Republicans “certainly couldn't agree to a formula to distribute the (rebate) dollars that would take care of Philly and leave the rest of the state behind.”

No one could provide numbers showing the proposed distribution formula.

Republicans are showing their “Philadelphia fixation,” said House Democratic spokesman Bill Patton. He said they have “failed to deliver on what they pledged in the framework agreement, so they want to create their own false reality in which Philadelphia is somehow at fault.

“Republican leaders agreed to something two weeks ago and are grasping now for excuses for not getting the job done.”

Wolf said Republicans told him they lack votes “to deliver on property tax relief. In other words, the framework was not going to become a budget. I deeply regret this. We had within our grasp a budget framework that would have been transformational.”

Wolf acknowledged that to some extent the prolonged debate “is a natural function of a divided government.” But asked whether he would sign a stopgap budget, he insisted: “I want a budget.”

Wolf said he wants a final agreement by Dec. 4.

“People have been holding on for too long.”

Brad Bumsted is Trib Total Media's state Capitol reporter. The Associated Press contributed.

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