HARRISBURG - After failing to enact a state budget on time, Gov. Wolf and the Republican-controlled legislature now find themselves working against a new deadline.

The two sides have until midnight Monday to reach consensus on how to pay for the $31.5 billion spending plan that lawmakers sent Wolf last week.

If there is no agreement by then, the Democratic governor will have to decide whether to partially - or fully - veto the proposal. Wolf has signaled that he cannot sign a budget without having secured a deal on how to finance it.

The new fiscal year began July 1, and all sides are trying to avoid last year's bruising budget stalemate that held up critical funds to public schools and nonprofit organizations offering social services.

Although budget negotiators resumed talks behind closed doors Tuesday, they did not resolve their differences, which center on whether to raise certain taxes.

"I'm always encouraged by discussions, but we have a long way to go," said Senate Majority Leader Jake Corman (R., Centre). "We're still working at it."

House Republicans have pushed for raising roughly $1 billion through gambling expansion and other measures, and have balked at pushback from Wolf and the Senate that their plan doesn't raise enough money and is based on revenue projections that are unrealistic.

The House's sprawling gambling legislation, which would make Pennsylvania the fourth state to legalize internet gambling, has also hit opposition in the Senate.

Talks late last week stalled over the question of whether to resurrect a tax that would be passed on to natural gas consumers. The gross receipts tax on natural gas is supported by the Wolf administration as well as some senators. It would raise about $500 million.

But House Majority Leader Dave Reed (R., Indiana) insisted that there is not enough support within his caucus for it - although some Republicans privately point out that he has not counted votes or done anything to persuade his members that it may be necessary for a deal.

The tax, which was rescinded under Republican Gov. Tom Ridge, is levied on natural gas companies but passed along to households and businesses that use natural gas.

About half the households in the state use natural gas.

Steve Miskin, spokesman for House Republicans, said Tuesday that many in his caucus equate the gross receipts tax on natural gas to hiking the state sales or personal income tax, both of which are paid by large swaths of state residents.

"It's not on our table," he said.

acouloumbis@phillynews.com

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