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As budget deadline nears, no agreement, no talks set

HARRISBURG - With four days until the deadline for a state budget - and the memory of last year's impasse still raw - Gov. Wolf and the Republican-dominated legislature have no deal and no face-to-face talks scheduled, and have shown little evidence of the political will for election-year tax hikes.

HARRISBURG - With four days until the deadline for a state budget - and the memory of last year's impasse still raw - Gov. Wolf and the Republican-dominated legislature have no deal and no face-to-face talks scheduled, and have shown little evidence of the political will for election-year tax hikes.

Legislators left the Capitol on Thursday without even resolving a basic question: how much money they plan to spend in the fiscal year that begins July 1, let alone how much new revenue they need to raise and where it will come from.

Members of the House of Representatives were scheduled to meet Sunday evening to begin positioning a budget bill for a vote - but abruptly canceled the meeting Saturday afternoon, saying they had more work to do.

"The situation is still pretty fluid," Rep. Frank Farry (R., Bucks) said in an interview late last week. "I do feel there is a greater sense of bipartisanship this time around. But I think everything comes down to: What is the tax vote? And who is willing to take it?"

To be sure, the Democratic governor and Republican leaders have shed some of the hard and fast ideological positions that led to last year's historic budget stalemate.

Wolf last week for the first time publicly backed off his plan to use hikes in the sales and personal income tax to raise new dollars. The GOP, meanwhile, has inched away from demanding that pension reform and liquor privatization be part of any negotiated spending plan.

The legislature has passed - and Wolf has signed - bills to break the state's monopoly over the sale of wine, a move that with other changes to the state-run liquor system is projected to generate about $150 million.

The House has also taken other steps: It gave preliminary approval to a bill legalizing online gambling that could raise about $250 million in annual revenue. And it passed legislation instituting a tax amnesty program projected to bring in $75 million to $150 million.

But the numbers on the other side of the ledger - the ones reflecting spending - are sobering.

The state's pension and health-care costs continue to rise, and the budget deficit stands well over $1 billion. Wolf has said he wants to close that gap while still increasing funding by $250 million for public schools.

The two sides have floated other potential revenue-generating proposals, including new tobacco taxes and a gross receipts tax on natural gas - one that could show up on the bill of every Pennsylvania household that uses natural gas.

How much support those types of proposals have is unclear. The House Republican caucus has, over the years, trended more conservative, and more staunchly anti-tax - a political reality that has complicated budget talks with Wolf, who has pushed for tax increases to pay for education and social service programs.

"Guys like me are going to push for more cutting, without a doubt," said Rep. Rick Saccone (R., Allegheny), who called that effort "not just my fight, but the fight of those of us that were sent up there to control spending."

And this is an election year, when elected officials studiously avoid tough votes that could reverberate at the polling booths in their districts. All 203 seats in the House are up for grabs, as are half the 50 seats in the Senate.

House Majority Leader Dave Reed (R., Indiana) told reporters last week that the two sides are "less than a couple hundred million dollars apart" - which, by state Capitol standards, is not insurmountable, even in a short period of time.

"There's still differences to be hashed out, but they are definitely narrowing in scope," he said.

But the messy storyline of last year's budget talks still stings. After House and Senate GOP leaders had agreed with Wolf on a budget framework in December, the House's rank-and-file members refused to support it. The deal unceremoniously collapsed just days before Christmas. Months later, Wolf allowed a GOP-crafted budget to lapse into law, but made no secret of his contempt for it.

Rep. Bill Adolph (R., Delaware), who chairs the powerful House Appropriations Committee, said the difference in tone and tenor of the recent negotiations was like the difference between "night and day."

If his committee can't agree to a spending number, it will move a bill that can garner the support of the majority of the House's 203 members to move the process along.

He said he hoped it did not come to that.

"Everybody wants to get this done, and I'm not sure that was the case this time last year," he said. "To go back and bring up the mistakes of last year - well, there was mistakes made by everyone. It was a perfect storm."

Longtime Philadelphia Republican Rep. John Taylor said he believes the two sides are close to an agreement on how much to spend, but "there is still going to be a tough time getting the votes" for taxes to support it.

"The fallacy is that if it's a specialized tax, that it's going to be so much easier to get than a broad-based tax," such as on the sales or personal income tax, he said. Some legislators, he said, won't even vote for a bill that would allow Philadelphia to impose a new tax just within its borders.

Such anti-tax sentiment is why Taylor and others believe that moderates from both parties - many of whom represent districts in suburban Philadelphia - will be critical to getting the votes for a deal this year.

"It's largely going to fall on members from the Southeast - Democrats and Republicans - to do this," he said.

acouloumbis@phillynews.com

717-787-5934@AngelasInk