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At Heart Of Pa. Budget Battle, Neither Side Budges On Tax Hikes And Spending

ARI SHAPIRO, HOST:

Pennsylvania is entering its fourth month without a state budget. The impasse is starting to cause big problems for public education and human services non-profits. As Mary Wilson of member station WITF reports, the governor and state lawmakers are running out of ways to reinvigorate negotiations.

MARY WILSON, BYLINE: The Pennsylvania State Capitol has the feeling of a repertory theater this year, as lawmakers and the governor muddle through intractable budget talks. For a front-row seat, you can lurk outside the weekly closed-door meetings and wait for the state's top politicians to emerge. Over the summer, Governor Tom Wolf remained optimistic.

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TOM WOLF: We are on the same page in terms of wanting to do what's right for Pennsylvania. I'm not just saying that. The arms are unfolded, and I think we understand that we have to reconcile our ideas.

WILSON: But reconciling ideas has proved to be tough. Governor Wolf is a Democrat, elected last year after he campaigned to boost funding for schools which have been called the most inequitable in the nation by the federal government. To meet his spending objectives, Wolf proposed a raft of tax hikes, but the Pennsylvania legislature is dominated by huge Republican majorities that have remained fiercely opposed to tax increases.

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SCOTT PETRI: Sometimes you need to stand up and just say no.

WILSON: Scott Petri represents part of the Philadelphia suburbs. He and many other Republicans say this is solely a fight over taxes.

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PETRI: The simple fact is that when our governor removes from the table of consideration broad-based taxes such as sales tax and income tax increases, this budget will resolve quickly.

WILSON: Republicans have refused to remove from the table some priorities of their own. They're trying to slay two dragons the Democrats support - the state-run wine and liquor stores and traditional pension plans for state and public school employees. The governor recently offered compromises on both those fronts, but he says he's been underwhelmed by the response from Republicans.

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WOLF: I got nothing on education - nothing. I got nothing on property tax relief, and I got nothing - I got nothing on how we're going to actually balance this budget.

WILSON: Without a budget in place, public schools, local governments and social service providers have been cut off from their state funding for roughly three months. The governor vetoed an attempt to provide short-term funding, preferring to come to a long-term solution. Pennsylvania Auditor General Eugene DePasquale says, without state aid, some schools can't pay their bills.

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EUGENE DEPASQUALE: Some have stopped paying vendors. Some are holding payments to retirement funds. And some are putting the education of students in jeopardy by even making statements that they'd have to consider closing schools.

WILSON: The impasse has squeezed the groups that administer the state's social safety net, as well. Some have reported cutting services and laying off employees.

TOM CORNACK: That's the tragedy.

WILSON: Tom Cornack and his wife own an early intervention business that contracts with counties to help children who aren't developing on schedule. He says the budget standoff has forced his company to borrow money and he thinks many smaller agencies can't even do that.

CORNACK: Small providers that do really, really good work, those people right now are not getting paid at all.

WILSON: Top lawmakers don't see an end in sight for the budget impasse. Both sides insist that they're not sticks in the mud, they're just sticking to their principles. For NPR News, I'm Mary Wilson in Harrisburg.

SHAPIRO: And that was Mary Wilson of member station WITF in Pennsylvania. Transcript provided by NPR, Copyright NPR.