HARRISBURG - During an hour-long negotiating session Wednesday, Gov. Wolf and Republican legislators inched toward compromise on some key sticking points in a budget six weeks overdue.

House Speaker Mike Turzai (R., Allegheny) was careful to temper expectations, but said the talks marked the first time he had seen "some movement [by Wolf] acknowledging our perspective" on pension reform and privatization of the state liquor store system.

"There's no breakthrough," Turzai said, "but it was an important discussion."

Wolf agreed that there had been progress, though, like Turzai, without elaborating on what was discussed in the second-floor Capitol conference room. But the first-term Democratic governor said he needs to see similar acknowledgment by Republican leaders of his plan to bolster education spending.

"There's a sense that we're trying to move substantive conversation on issues that are important to both sides," Wolf said. "We need to move forward and have substantive work on pensions, but it's also important to address the education issue."

Wednesday's meeting in Harrisburg was the first between the sides since Aug. 3 and followed repeated claims by each side that the other had refused to compromise.

Talks are scheduled to resume Thursday, and House Minority Leader Frank Dermody (D., Allegheny) said the thaw might reflect the start of horse-trading discussions that could lead to a budget.

"I think finally, today, there's an agreement to take a look at what [Wolf is] proposing, and what they're trying to do with him on education, to get where he needs to go," Dermody said.

He said, however, that the two sides were not close to deciding how much to spend on education, let alone where the money will come from.

The governor and GOP legislative leaders have been at odds over the budget for months, and there had been few signs of progress since Wolf vetoed a $30.1 billion Republican-backed spending plan on June 30.

Wolf has been seeking to increase school funding and reduce property taxes, making up the gap with a variety of other tax increases. Republicans, in addition to pension reform and privatization of wine and liquor sales, are opposed to any new levies.

House Majority Leader Dave Reed (R., Indiana) said Republicans were not budging on tax hikes.

"If it's just votes for sales or income tax to balance the budget, they just aren't there in the House or Senate," Reed said.

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