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Budget takes effect amid fight over funding it

HARRISBURG - Pennsylvania lawmakers are to return to the Capitol for another session day, but without an agreement to fully fund the $32 billion budget bill they passed nearly two weeks ago and with the threat of a credit downgrade looming to the state's bruised credit rating.

The budget bill became law Tuesday, even though it is badly out of balance. Democratic Gov. Tom Wolf declined to veto the bill as he presses the Republican-controlled Legislature to approve a tax package big enough to avoid a credit downgrade.Tuesday's session could be a sidelight to negotiations to hammer out a $2 billion-plus revenue plan that budget negotiators say is necessary to plug a hole in the state's finances.Wolf's decision came in a statement Monday, after the collapse of down-to-the-wire negotiations and hours before the nearly $32 billion spending bill was to become law without his signature at midnight.Wolf - who had stayed out of sight since Friday - wrote in his statement that he hoped lawmakers could come together in the coming days to responsibly balance a budget plan with a projected $2 billion hole in it."Our creditors and the people of Pennsylvania understand a responsible resolution must take real and necessary steps to improve Pennsylvania's fiscal future," Wolf said.In the 10 days after lawmakers sent the spending bill to his desk, Wolf had the power to sign it into law, veto it or strike out some of the spending.Wolf's move left questions about the constitutionality of the bill and how long past Monday it will take Pennsylvania's divided government to produce an agreement to pay for it.Looming is the potential for another downgrade to a credit rating already damaged by Pennsylvania's failure to deal with an entrenched post-recession deficit.An approximately $2.2 billion revenue package is necessary to resolve the state's largest shortfall since the recession and a projected deficit in the fiscal year that began July 1, budget negotiators say.Senate GOP leaders did not protest Wolf's move to let the budget bill become law after Wolf found more common ground with them in recent weeks. However, House Majority Leader Dave Reed, R-Indiana, sharply attacked Wolf on Monday evening as being absent on leadership and negotiating in bad faith.Reed said Wolf should have stripped some spending from the budget bill if he was unwilling to go along with two House GOP demands: allowing thousands of bars and truck stops to operate slot machine-style video gambling terminals and privatizing more of the state-controlled wine and liquor store system.

Senate President Pro Tempore Joe Scarnati, R-Jefferson, walks through the Pennsylvania Capitol after a meeting with House Majority Leader Dave Reed, R-Indiana, in Harrisburg, Pa., Monday, July 10, 2017. Monday marks the 10th day of a budget stalemate between Democratic Gov. Tom Wolf and leaders of the House and Senate Republican majorities. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.
The Pennsylvania Capitol building is seen in Harrisburg on Monday. AP PHOTO/MATT ROURKE Copyright - Copyright 2017 The Associated Press. All rights reserved.
Senate Majority Leader Jake Corman, R-Centre gavels out a rules comity meeting at the Pennsylvania Capitol in Harrisburg, Pa., Monday, July 10, 2017. Monday marks the 10th day of a budget stalemate between Democratic Gov. Tom Wolf and leaders of the House and Senate Republican majorities. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.
Pennsylvania House Majority Leader Dave Reed, R-Indiana, makes his way to his office at the Pennsylvania Capitol in Harrisburg, Pa., Monday, July 10, 2017. Monday marks the 10th day of a budget stalemate between Democratic Gov. Tom Wolf and leaders of the House and Senate Republican majorities. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.
Pennsylvania House Minority Leader Frank Dermody, D-Allegheny, leaves a committee meeting at the Pennsylvania Capitol in Harrisburg, Pa., Monday, July 10, 2017. For the second straight year, Democratic Gov. Tom Wolf will let a state budget bill become law despite the fact that it is badly out of balance as he presses Pennsylvania's Republican-controlled Legislature to approve a tax package big enough to avoid a credit downgrade. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.
Pennsylvania Speaker of the House of Representatives, Rep. Mike Turzai, R-Allegheny, leaves a committee meeting at the Pennsylvania Capitol in Harrisburg, Pa., Monday, July 10, 2017. For the second straight year, Democratic Gov. Tom Wolf will let a state budget bill become law despite the fact that it is badly out of balance as he presses Pennsylvania's Republican-controlled Legislature to approve a tax package big enough to avoid a credit downgrade. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.
Pennsylvania House Majority Leader Dave Reed, R-Indiana speaks with members of the media at the Pennsylvania Capitol in Harrisburg, Pa., Monday, July 10, 2017. For the second straight year, Democratic Gov. Tom Wolf will let a state budget bill become law despite the fact that it is badly out of balance as he presses Pennsylvania's Republican-controlled Legislature to approve a tax package big enough to avoid a credit downgrade. (AP Photo/Matt Rourke) Copyright - Copyright 2017 The Associated Press. All rights reserved.