Gov. Wolf vetoed a plan Thursday to privatize the state liquor industry, as his standoff with Republican legislators over the state budget continued.

The Democratic governor also vetoed an education funding bill that applied a new formula for distributing aid to school districts.

The actions came days after Wolf vetoed the $30.1 billion budget passed by the Republican-controlled legislature, leaving Pennsylvania without a spending plan at the start of a new fiscal year.

The vetoed liquor bill would allow private retailers to sell wine and liquor, which now can be sold only at State Stores. Republican lawmakers also want to lease the Liquor Control Board's wholesale operation and eventually close State Stores.

"It makes bad business sense for the commonwealth and consumers to sell off an asset, especially before maximizing its value," Wolf said in a statement.

Wolf said he is open to selling liquor in locations other than State Stores but would like to modernize liquor sales without total privatization.

Republican lawmakers said Thursday that liquor privatization would remain part of their budget negotiations with Wolf.

"It is unfortunate that Gov. Wolf has rejected moving Pennsylvania into the 21st century when it comes to the sale of wine and spirits," Senate President Pro Tempore Joe Scarnati (R., Jefferson) and Majority Leader Jake Corman (R., Centre) said in a statement. "We remain committed to our position that Pennsylvania should not be in the business of selling liquor."

The veto "goes to the root of the budget disagreement," said Steve Miskin, spokesman for House Republicans.

"The entire point of [Wolf's] budget is to raise taxes and protect his special interests," Miskin said.

Other groups expressed support for the liquor bill veto, including beer distributors, the Pennsylvania Wine and Spirits Council, and Mothers Against Drunk Driving.

The privatization plan "would have eliminated most of our small, family-owned and operated businesses," the Malt Beverage Distributors Association said in a statement.

On school funding, Wolf said he vetoed the bill because it did not adequately fund public schools.

"Unfortunately, this bill fails to restore the harmful education cuts imposed on each school district over the last four years," Wolf said.

The vetoed school-funding bill would have applied a new basic education funding formula proposed by a bipartisan panel of lawmakers.

Wolf said he supports using the formula for distributing funds to school districts that gives additional weight to factors such as poverty, non-English-speaking students, and charter payments. But he criticized the Republican-backed bill for offering a significantly smaller increase in public education funding than the governor had proposed.

Miskin said the Republican-backed school funding plan was still an increase over previous budgets.

"There's obviously some pretty deep disappointment" over the vetoes, he said.

Wolf also vetoed a third bill Thursday - the fiscal code, which dictates how the state spends money in the budget. He said it "fails to adequately pay our bills."

The governor has not yet acted on a bill to change the state pension system, a bill he has said he opposes.

As the standoff between Wolf and Republicans continues, Pennsylvania is operating without a budget. Wolf and legislative leaders met briefly behind closed doors Wednesday. Meetings are expected to resume next week.

lmccrystal@phillynews.com

610-313-8116 @Lmccrystal

Inquirer staff writer Angela Couloumbis contributed to this article.