HARRISBURG - Gov. Wolf on Tuesday vetoed the interim spending plan sent to him by Republicans who control the legislature, all but ensuring the state will enter a fourth month without a budget.

The veto was expected, but it means the two sides have no backup plan during the impasse to fund schools, counties, and social-services providers that rely on state aid.

It came less than a day after a negotiating session that Republican leaders said had ended with signs of progress. Instead, both sides were back to public bickering Tuesday, with no talks scheduled.

In striking down the $11 billion stopgap budget - equal to about a third of the state's yearly spending - the governor called on GOP leaders to "get serious" about negotiating a deal.

"Instead of seriously negotiating a final budget that funds education with a commonsense severance tax, fixes our deficit without gimmicks, and provides property-tax relief for middle-class families and seniors, Republican leaders passed a stopgap budget that once again sells out the people of Pennsylvania to oil and gas companies and Harrisburg special interests," Wolf, a Democrat in his first year, said in a statement.

The House and Senate Republican leaders have accused Wolf of intransigence at the negotiating table, and lambasted him for blocking their temporary spending plan - one they said at least would have allowed critical aid to resume.

"The problem is with the governor," said Sen. Scott Wagner, a Republican from York County. ". . . I'll be honest with you, I'm tired of taking blame for the budget. . . . It's Gov. Wolf right now holding everyone hostage."

The state has been operating without a budget since July 1. Though they have met regularly, negotiators on both sides remain divided over how much money to spend and whether to raise taxes.

The stopgap budget Wolf vetoed would have freed up just over $3 billion for public schools and millions of dollars for social services agencies, according to Republican Senate leaders.

The longer the impasse lingers, the harder it becomes for schools and social services nonprofits to operate. Some have already borrowed money, dipped into reserves, or stopped paying vendors.

On Monday, Pennsylvania Auditor General Eugene DePasquale said the stalemate has already forced at least 17 school districts and two intermediate units to borrow $346 million to stay open. Interest and fees on that borrowing could reach $11.2 million, he said.

Philadelphia's schools system tops the list in borrowing, having taken out $275 million in loans so far, according to the Auditor General's Office, which surveyed just under 60 percent of the state's 500 districts.

The financial picture for schools is only expected to become more bleak, DePasquale said.

If districts don't receive their scheduled payments from the state by Thursday, school borrowing in total will climb to nearly $500 million - not including fees and other expenses, he said. And if a state budget isn't in place by Nov. 1, the cost of borrowing is expected to exceed $1 billion.


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