Jul 5, 2015 3 min read

Negotiations between the Wolf administration and lawmakers will resume today after Gov. Tom Wolf, a Democrat, vetoed Republican-backed budget legislation and bills to privatize the state-controlled system of liquor and wine sales.

Until the sides agree on a package of budget legislation, the Wolf administration has lost some of its spending authority for the 2015-16 fiscal year, which began Wednesday.

Here is a look at what to expect:

Significant differences remain between Wolf and leaders of the Republican-controlled Legislature over taxes and spending.

The Republicans passed a $30.2 billion, no-new-taxes budget bill that authorizes $1.1 billion in new spending, primarily for rising public pension and health care costs and to boost education aid.

Every Democratic lawmaker opposed the bill. The Republicans’ budget plan was nearly $1.5 billion lower than Wolf’s, a difference explained primarily by the GOP’s smaller offering of education aid and its use of one-time payment delays.

Wolf wants a new, $1 billion severance tax on Marcellus Shale natural gas production and a grab-bag of other tax increases to reverse deep cuts in education aid and to wipe out a long-term budget deficit.

Republicans said the privatization of the state’s wine and liquor system could bring in $220 million annually; Wolf said it is unwise to sell a valuable asset and risk higher prices and less selection for consumers.

Wolf is expected to veto a plan Republicans passed to end the traditional pension benefit for most future public school and state government employees by directing them into 401(k)-style retirement plans.

Every Democratic lawmaker opposed it. Wolf said he opposed the Republican plan, although Wolf and lawmakers said it is important to squeeze savings out of the debt-ridden systems that cover about 370,000 workers.

Neither Wolf nor top Republican lawmakers are giving an inch publicly or taking responsibility for the stalemate, now three months after Wolf proposed his budget plan.

To override Wolf’s veto, Republicans need a two-thirds majority in both houses – a threshold that would require Democratic votes.

The absence of a budget this early in the fiscal year was not expected to have an immediate effect on services because agencies can tap surpluses and special funds. But the situation could deteriorate if the impasse drags on.

Historically, the state has lost the authority to pay its vendors, including counties and nonprofit organizations that administer much of the state’s social safety net. It also has been unable to release aid to schools, early childhood centers and universities.