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Lawmakers' deep divide over taxes slows budget talks

HARRISBURG — The Pennsylvania Legislature’s deep divide over tax increases dashed hopes in the Capitol on Friday for a quick end to state budget negotiations, and leaders sent rank-and-file lawmakers home while they worked to find a solution with Democratic Gov. Tom Wolf.

The prospect of a new impasse arose barely two months after the end of a record-breaking stalemate in the first budget go-around between Wolf and the Republican-controlled Legislature.

The House and Senate finalized a $31.5 billion spending plan Thursday and sent most of it to Wolf’s desk. But that momentum petered out Friday, the first day of Pennsylvania’s 2016-17 fiscal year.

Budget negotiators vowed to work over the weekend to seek agreement on more than $1 billion needed to balance Pennsylvania’s deficit-plagued finances. But Democrats and Republicans feuded over the precise amount of money necessary to balance the budget.

“Every once in a while you’ve got to make the difficult decisions to run the state, pay for schools, take care of your responsibilities,” said House Minority Leader Frank Dermody, D-Allegheny. “For the last four years, that hasn’t been done and now the chickens have come home to roost.”

Top lawmakers shuttled between meetings in the Capitol on Friday while Wolf stayed out of sight.

House Majority Leader Dave Reed, R-Indiana, continued to back a $1.2 billion revenue proposal built on higher tobacco taxes, back taxes from tax delinquents, the expansion of legalized gambling and the expectation of brisker wine and liquor sales.

“We have a revenue package,” Reed said. “It’s always been around $1.2 billion. We’ve shared that with the Senate, we’ve shared that with the Democratic caucus, we’ve shared that with the administration. ... We’ve put $1.2 billion in new revenue on the table. ”

Democrats, however, say it will take closer to $1.4 billion to close the gap with the spending plan, and accused Republicans of overly optimistic projections. The House passed a bill that would make Pennsylvania the fourth state to legalize Internet gambling, but that plan hit opposition in the Senate.

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