Jul 21, 2015 4 min read

HARRISBURG – A nearly four-hour budget meeting in the Pennsylvania Capitol Tuesday left the governor and Republican leaders sounding upbeat even though they had no major breakthroughs to announce.

Democratic Gov. Tom Wolf said negotiators made progress but he declined to “even guess” how much longer the budget stalemate will go on.

“We have, each of us have, a better understanding of why the things that separate us separate us,” Wolf said.

The meeting focused on spending, the sort of process that historically has been done by staff, not by the governor and the leaders in person.

“Everybody felt that it was a productive meeting and we really have a dialogue going on,” said House Speaker Mike Turzai, R-Allegheny. “We want to get to an agreement, but we realize there are some significant differences but we had to get into the details and we did that today.”

Wolf said the parties agreed to meet again soon.

“There are still gulfs out there and we’re going to have to work through that, but at the end of the day we recognize that we have to come up with a budget that is good for the people who elected us, and we’re going to do that,” the governor said.

Pennsylvania is three weeks into its new fiscal year without a budget in place. Republicans passed a budget without new taxes at the end of last month, but it didn’t have a single Democratic vote and Wolf vetoed it.

House Majority Leader Dave Reed, R-Indiana, said it was helpful for the sides to go through the budget and justify their position on various items.

“The differences are narrowing,” Reed said. “It’s not exactly going quickly but they are getting smaller.”

Earlier in the day, Wolf said on KDKA-AM radio in Pittsburgh that bad state budgeting is costing taxpayers about $170 million a year. He said state government is paying a premium of about 1 percent interest on $17 billion in debt, and he linked the extra borrowing cost to five credit downgrades that Pennsylvania has received in the past three years.

“This isn’t just Democrat Tom Wolf talking, this is people outside looking at us and right now we’re paying a premium of about 1 percent on our debt, that’s $17 billion,” Wolf said. “That adds up to about $170 million a year we’re all paying. It’s not going to education. It’s not going to roads and bridges. It’s going to the pockets of people who have bought our bonds because we don’t have a good budget.”

In the meantime, Republicans objected to a $750,000 ad campaign by an affiliate of the Washington, D.C.-based Democratic Governors Association that is targeting them in the showdown. The affiliate, America Works USA, has not disclosed the source of the money.

The budget stalemate has left the state government without full spending authority, which includes payments to schools and nonprofits and county agencies that help administer Pennsylvania’s social services safety net.

Wolf wants a multibillion-dollar tax increase to deliver a record funding boost to schools and wipe out a long-term deficit that’s damaged Pennsylvania’s creditworthiness. The Republican-passed budget contained a smaller boost for education, but Wolf said it didn’t meet his goals and claimed it used gimmicks to reach balance.

Wolf, a first-time officeholder who became governor in January, told KDKA-AM he believes that Republicans are probably doing “some testing of me as a new governor, which I think is designed to see if I’m really serious about standing up for what I believe and what I think the people of Pennsylvania want.”