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Wolf says he's sticking to budget deal, amid new GOP demand

HARRISBURG, Pa. (AP) - Gov. Tom Wolf said Wednesday he remains committed to the outlines of a budget deal he had struck with top lawmakers to end a five-month budget stalemate, a day after the House Republican majority revolted and passed a significantly smaller spending plan.

The second collapse of a budget deal in the past month left lawmakers, lobbyists and people in the education and social services communities wondering if the stalemate would stretch into 2016.

Layoffs have mounted in recent weeks at social services agencies struggling to get by without state aid. School district borrowing continues to rise, hitting $900 million, state Auditor General Eugene DePasquale said Wednesday. The figure includes massive loans to Philadelphia, Allentown, Erie and Scranton's school districts.

Wolf also said he wouldn't spend the weekend in New York at the annual Pennsylvania Society festivities, where thousands from the state's political and business establishments typically gather.

"If there's no budget, I'm not going to be up in New York," Wolf told reporters after he showed up for a celebration of the Holiday Wish Program, a volunteer gift drive. "This is where I need to be."

Asked if he would make more concessions to appease the House GOP, the Democrat would say only that he is committed to the deal's framework, declining to answer more questions.

Senate Minority Leader Jay Costa, D-Allegheny, said the Senate would send all of its budget-related legislation to the House by the end of Thursday in the hopes that House Republicans would realize that that is what Wolf will sign. On the House side, Majority Leader Dave Reed, R-Indiana, told WGAL-TV that he was working "to find that right combination" of legislation to pass the House and win Wolf's signature.

With hopes fading for a budget resolution this week, talk among some school boards turned again to closing down - several districts considered it in September or October - as they face the prospect of taking out new loans to stay open.

"Who knows where this is going to end up or how long that's going to take?" said Jim Buckheit, executive director of the Pennsylvania Association of School Administrators. "Given that this is the third go-around, I think people have really lost any faith that they'll come to a rational agreement or resolution in any short amount of time."

The tiny Greenville School District in western Pennsylvania plans to borrow $5 million by Dec. 20 if the stalemate stretches on. Without the loan, the 1,400-student district could keep its three schools closed after the holidays, officials said.

"We're up against the wall," Superintendent Mark Ferrara said. "We absolutely don't want to shut down, but that's an option."

In Pittsburgh, the Easter Seals chapter for central and western Pennsylvania laid off 22 people this week, a measure to help it cope with the loss of state aid to care for the disabled that normally supplies about one-fourth of its budget.

The layoffs include therapists, program coordinators and people who work in accounting and fundraising. The rest of the staff - about 270 to 300 people - will take salary reductions of up to 30 percent, said Karen Kavic, the agency's vice president of development.

The $30.8 billion spending package supported by Wolf and the Senate calls for a 6 percent spending bump and a $1.2 billion tax increase. To meet Wolf's demands, it would deliver a record boost to public school aid - $350 million, or 6 percent - as well as meet county requests for more human services aid and narrow a long-term budget deficit.

As a trade-off, Wolf has agreed to sign legislation long sought by Senate Republicans to scale back public pension benefits and by House Republicans to break state control over the sale of wine and liquor.

However, rank-and-file House Republicans backed out of a deal their leaders had helped negotiate, protesting it as being too expensive. The Senate has not assembled a plan for taxes that would increase as part of the deal.

Strengthening resolve against the deal were House Republicans wary about what they believed would be watered-down wine and liquor legislation.

To support its $30.3 billion spending plan, the House GOP was preparing a two-year, nearly $1 billion revenue package based primarily on an increase in cigarette taxes and an expansion of casino gambling to Internet sites and off-track betting parlors.