Wolf, GOP lawmakers resume budget talks as Republicans make offer on school aid, pensions

Top Republican lawmakers said Wednesday they will meet a key demand of Gov. Tom Wolf's to boost public school aid, even if it requires a tax increase, but they continued insisting on an end to the traditional benefit in Pennsylvania's two big public pension systems.

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Leaders of the Pennsylvania Legislature's Republican majorities made the offer during a brief meeting with the Democratic governor in the Capitol. It came amid a 7-week-old budget stalemate that has started to shut down crucial safety-net services around Pennsylvania as Wolf and Republicans trade barbs in public.

The offer by Republicans meant they were summarily rejecting Wolf's week-old offer to keep most of the traditional pension benefit intact for hundreds of thousands of future public employees. But it also upped Republicans' commitment by $300 million to the state's primary funding program for public schools, bringing it to the $6.1 billion Wolf has sought, up from last year's $5.7 billion.

"I need them to move into my camp on education and so they've done I think a pretty good job there," Wolf told reporters as he left the meeting. "But there are conditions and that's the things we have to talk about."

Wolf said the sides would try to meet again as quickly as possible. The condition would require him to agree to a top Republican priority of shifting Pennsylvania's two big public pension systems to a 401(k)-style plan for state government and public school employees who are hired in the future. Wolf, however, has balked at that, as have Democratic lawmakers, and it is staunchly opposed by public employee labor unions.

"This is a huge move, a huge change in the tenor of the meetings and I would hope that the governor takes this proposal seriously and gets back to us as quickly as possible because this will move conversations quickly to ... be able to finalize a state budget," Senate President Pro Tempore Joe Scarnati, R-Jefferson, told reporters after the meeting.

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Senate Majority Leader Jake Corman, R-Centre, acknowledged that scrounging an additional $300 million would require finding new money, but said the source of it would have to be negotiated.

Republicans contend that switching the pension systems to a 401(k)-style benefit will ensure the state does not roll up another massive debt, such as the projected $50 billion combined debt the systems now face. Wolf, however, has said that the traditional pension benefit is a more efficient way to ensure retirement security for public workers.

Wolf vetoed the Republicans' $30.2 billion budget package on June 30, saying it did not do enough to help public schools still struggling after deep cuts in aid by Republicans in 2011 and that it worsened the state government's long-term deficit.

However, Republicans have rejected Wolf's $31.6 billion budget proposal, saying they did not support the multibillion-dollar tax increase necessary to support it.