Pa. budget talks drag on

HARRISBURG —  Pennsylvania's Capitol hallways looked deserted Wednesday, even though the state is nearly a week into the new fiscal year without a complete budget.

Budget negotiators on Wednesday said that talks were continuing, but Gov. Wolf and Republicans who control both legislative chambers have yet to strike a deal on a plan to pay for the nearly $32 billion in spending approved last week.

As they hash it out behind closed doors — and largely outside the Capitol — legislative leaders have told House and Senate members to stay put in their districts, at least through Thursday. And it remains unclear whether they will return to the Capitol on Friday.

In the meantime, Wolf, a Democrat, has until day's end Monday to decide whether to sign, veto, or withhold his signature from the $31.99 billion spending bill that the legislature approved late last week. If he does nothing, it would become law after midnight Monday.

Wolf has not indicated what he intends to do if there is no deal on a revenue package.

The bill would, among other things, increase funding for public schools, but also calls for savings through consolidating several state departments.

How to pay for it all remains the sticking point.

Negotiators have been discussing several options, including borrowing money against a state fund for tobacco settlement money to cover last fiscal year's projected $1.5 billion budget shortfall. Wolf and Senate Republicans have said they are open to borrowing, but House Republicans have steadfastly refused to take a position.

Another point of contention: how much to expand gambling in the state and, specifically, whether to allow up to 40,000 video-gaming terminals at bars, taverns, and other establishments with a liquor license. House Republicans have supported it, but Senate Republicans have pushed back, saying they fear it will eat into the business of existing casinos, which send hundreds of millions in taxes on their revenue into state coffers every year.

On Wednesday, Senate President Joe Scarnati (R., Jefferson) told the Associated Press that negotiators were close to finishing compromise legislation to expand casino-style gambling in the state, but he did not give specifics. However, he sent strong signals that video-gaming terminals would not be part of a final deal.

Also being considered in talks: a plan to further privatize alcohol sales in the state by allowing more private-sector businesses to sell wine and hard liquor. Another idea that has been discussed is to assess the sales tax on the retail purchase of alcoholic drinks at bars and restaurants. Currently, the sale of that alcohol is taxed at the wholesale price when the bar or restaurant buys the alcohol.