In the latest strange turn to Pennsylvania's budget drama, the Senate early Wednesday evening sent to Gov. Tom Wolf a slimmed-down, $30.3 billion spending plan that the House of Representatives had favored.
Wolf had yet to indicate whether he would sign the bill, though given his prior rejections of a mainstream and a stopgap budget, plus a combative tone in a statement late Wednesday, prospects of another veto loom.
"We must continue our fight for historic education funding that will begin to restore the cuts from five years ago, and a budget that is balanced, paid for, and fixes our deficit," he said, referencing slashes in education spending under predecessor Tom Corbett.
The smaller budget includes a $150 million bump in basic education spending, not his $350 million in the larger plan.
Earlier Wednesday, the House balked at the Senate-endorsed $30.8 billion budget, saying House members had yet to see a tax package.
Wednesday marked a record 176th day without a budget for fiscal 2016, which began July 1. Pennsylvania previously set its futility mark in 2003, under Gov. Ed Rendell. Illinois also has an unsigned budget, though its lawmakers enacted a stopgap measure to keep K-12 school funds flowing.
School districts throughout Pennsylvania have had to borrow nearly $1 billion in the absence of state-aid reimbursements. Social-service agencies have also felt the pinch.
On Tuesday, Moody's Investors Service downgraded Philadelphia School District debt five notches, in connection with a downgrade to the entire Pennsylvania state aid intercept program.
Moody's now assigns a program-enhanced rating Ba2, down from A3, to the Philadelphia district's debt. Philadelphia has the state's largest school district.
The intercept program guarantees debt-service payments and provides better loans for distressed districts by redirecting basic education funding or state aid payments from a school district in default to the paying agent bank.
Moody's downgraded the enhancement program to Baa1, which is now its cap for such enhanced ratings.
In mid-December, Standard & Poor's withdrew its intercept-related ratings.
All three major credit rating agencies downgraded Pennsylvania's general obligation bonds last year, citing budget imbalance and a pension liability estimated as high as $57 billion. Moody's Investors Service rates the commonwealth at Aa3 with a negative outlook while Fitch Ratings and Standard & Poor's rate it AA-minus with stable outlooks.
