HARRISBURG - For now, at least, the Pennsylvania House and Senate are agreeing to disagree on the best way to deal with the skyrocketing cost of public employee pensions.

The Senate on Thursday rejected the pension proposal approved this month by the House. One prominent Republican said the chambers will form a joint committee to craft a stronger bill.

"We want to get it done and we want to get it right," said Senate Majority Leader Jake Corman (R., Centre), later adding: "It's by far the number one problem facing the commonwealth . . . and we are not giving up on it."

Late last year, the Senate approved a bill to change retirement benefits for future state and public school employees, calling for them to receive both a less generous version of the traditional retirement benefit for current employees as well as a 401(k)-style plan.

Under the proposal the House approved this month, new hires would keep the traditional benefit plan for the first $50,000 of their annual salary, with a 401(k)-style plan targeted for anything above that.

Pension changes became a key sticking point during last year's historic budget impasse between the legislature and Gov. Wolf. Corman and other Republicans have said the state cannot begin to address its fiscal problems without tackling rising pension costs.

But Corman said he does not view the issue as a prerequisite to a budget deal this year.

The Democratic Wolf administration and the GOP-led legislature have been working to avoid another stalemate, but neither side has indicated that a deal will occur by next Friday's deadline for a new state budget. Both have key differences to resolve, including how much to spend in the next fiscal year.

Lawmakers left the Capitol on Thursday and are not scheduled to reconvene until Monday - although the House Appropriations Committee is set to meet Sunday night, presumably to begin moving a budget bill.

But there have been changes this year in the substance and tenor of negotiations. Wolf, for instance, has backed off his demand for a hike in either the sales or personal income tax to close the state deficit while boosting funding for public education.

Instead, the sides have been looking at other ways to raise new dollars, including legalizing online gambling, raising tobacco taxes, and making the first substantive changes to the way the state sells wine and liquor since the end of Prohibition.

Lawmakers are also considering reinstating a gross receipts tax on natural gas sales, the Associated Press reported Thursday, noting that natural gas is Pennsylvania's most prevalent home heating fuel, used in more than half of the state's five million households.

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