Wolf slams 'garbage' budget by GOP, announces partial veto

HARRISBURG - Gov. Wolf on Tuesday vetoed pieces of what he called the "ridiculous" and "unconscionable" budget passed by the Republican-controlled legislature, slamming lawmakers as shortchanging schools and pressing for new talks on a final spending plan.

Acknowledging the impact of the nearly six-month stalemate, the governor agreed to release six months' worth of emergency funds for schools and more than $9 billion for human services.

"I don't want to hold the children of Pennsylvania hostage for the inability of folks here in Harrisburg to get the job done," he said.

His signature means that about $23 billion in aid will flow. But the fix is temporary. Wolf used his line-item veto authority to eliminate or reduce other pieces of the $30.26 billion budget proposal, including funding for neo-natal medical assistance, student grants, and operations in the legislature.

"I'm expressing the outrage that all of us should feel about the garbage the Republican legislative leaders have tried to dump on us," Wolf said.

Republicans applauded the release of funds but chided the governor for taking so long. They also denounced Wolf's tone as counterproductive.

"Those types of words and campaign-style rhetoric aren't going to get a budget done," said House Majority Leader Dave Reed (R., Indiana).

Wolf's actions reflected the biggest step to date in getting state funding flowing again, but did nothing to resolve the fundamental policy differences in Harrisburg - or end a contentious budget season, already the longest in modern state history.

The governor, a Democrat in his first term, continued to insist that any final budget include the $350 million in new school funding that he has touted for months. Republican lawmakers have not given up on their own priorities - changes to the state pension system and liquor sales. And neither side addressed whether Pennsylvanians will have to pay more in taxes to fund the budget.

Legislators would not even say when they planned to return from their holiday break. Neither the Senate nor the House is scheduled to reconvene this week, though either chamber could be called back by leaders.

"We're not finished," said Senate Majority Leader Jake Corman (R., Centre), speaking to reporters after Wolf's vetoes. "We have to continue to negotiate and get to the point where all parties are going in the same direction."

Wolf appeared angry as he announced his decision in a brief news conference in the Capitol. He accused the Republican budget plan of unnecessarily cutting education funding, shortchanging state universities, and leaving a hole in future budgets - though GOP officials dismissed the claims as spin because funding for several education-related items remains tied up in other bills.

Still, Wolf called the Republican maneuver last week an "exercise in stupidity," and tore into GOP leaders for leaving the negotiating table.

"They can throw around all the political nonsense they want, but the fact remains, they ran off, pretty quickly at that, before finishing their job," he said. "And they left us with a real mess."

With his pen, Wolf reduced basic education funding budget by half, to about $2.5 billion. He also cut state prison funding by about $1 billion compared to what Republicans had proposed, slashed about $2 billion in proposed payments to hospitals to help control medical care costs, and reduced health and agriculture funding by about $100 million each.

The veto was not Wolf's first. In June, he rejected a similar budget proposal from the GOP-led legislature, and in September he scrapped a stopgap plan that would have released some state funds as negotiators worked toward a final agreement.

While acknowledging that Tuesday's decision was a "change of heart," Wolf said he exercised the partial veto this time because school districts were approaching the new year with dangerously low levels of cash. Earlier this month, officials said schools statewide had borrowed about $900 million to stay afloat.

Districts and education advocacy groups welcomed the long-awaited aid, but called on lawmakers to work toward a final resolution that increases education funding.

"It is a short-term infusion, not a long-term solution, to the state's school funding crisis," the Campaign for Fair Education Funding said in a statement.

Philadelphia School Superintendent William R. Hite Jr. said the city's schools no longer face a Jan. 29 shutdown, as they might have if the budget stalemate had persisted. "I'm in support of what the governor's attempting to do in terms of trying to ensure that there's more money for public school districts across the commonwealth," he said.

County government leaders said they also would welcome the return of state aid, but were unsure when they might start returning payments they had withheld from the state during the impasse.

"After nearly six months, hopefully within a couple weeks we will start to see some funding, particularly for human services," said Terence Farrell, chair of the Chester County commissioners.

Wolf's veto came a week after legislators seemed to be on the verge of a final budget deal.

The governor had been pushing a so-called framework agreement that he and Senate Republicans had touted since Thanksgiving. The plan called for $30.8 billion in overall spending - almost a billion more than in the 2014-15 fiscal year - including the $350 million boost for schools. The deal also would have included companion legislation to enact changes to the state's pension and liquor systems.

But that agreement collapsed in the House just before Christmas, in part because of disputes with the Senate over which taxes would be raised and how to change the state's two biggest pension funds.

Instead, the Senate shifted course and approved the smaller $30.26 billion budget proposal that originated in the House, then get out of town before the holiday. Corman said it was a way to ensure school funds could be released before the new year.

Wolf on Tuesday tore into lawmakers for the plan and for leaving the negotiating table. "This budget is doubly frustrating because we were so close to a reasonable one," he said.

Corman said he believed that the sides could still negotiate around the items included in the framework, and that either way, the Senate was not inclined to sign off on any budget proposal without pension reform.

But the House has already rejected the Senate's pension bill, and Reed said he believed House members now favored leaving behind items not directly related to a spending plan.

"I don't think it's a shot in the dark to say that original framework has come and gone," Reed said.

House Republican leaders began touching base on next steps Tuesday afternoon, Reed said, but he would not predict when all sides in the Capitol would return to the bargaining table.

Wolf urged legislators to start again soon. "Let's get back to work," he said.

cpalmer@phillynews.com

609-217-8305

@cs_palmer

Staff writers Kristen A. Graham and Michaelle Bond contributed to this article.