Pennsylvania's $28.3 billion budget is en route to the Senate with three weeks left in the session after the House passed it on a party-line 108-92 vote.
The Republican majority, after five hours of debate on Wednesday, defeated efforts by Democrats to provide school districts more than the $100 million increase in basic education funding that's in the budget.
"Many districts are starting to feel the pain of two years ago," said Rep. Frank Dermody, D-Oakmont, referring to $1 billion of state cuts for education in 2011.
Struggling school districts include Philadelphia, which is staring at a $304 million deficit and last week laid off about 20% of school employees.
But Rep. William Adolph, R-Springfield, called state support of schools reasonable.
"This budget spends $10 billion on K-12 education. That's a lot of money," he said. Adolph, a suburban Philadelphia lawmaker, also said federal stimulus aid has helped offset the state cuts.
Democrats also failed in their attempts to expand Medicaid under provisions of the federal Affordable Act. Gov. Tom Corbett, a Republican, wants more flexibility for the state.
Negotiations among House and Senate leaders, and Corbett's staff, will continue. The House plan, which does not raise or add taxes, would increase general fund spending by $578 million or 2.1%, but is $100 million less than what Republican Gov. Tom Corbett introduced.
The governor is lobbying a divided Senate to pass his bill to privatize Pennsylvania's system of liquor stores. The House has already approved.
"It's time for the Senate to move on this and get the bill on my desk by the end of this month," Corbett told reporters Wednesday.
Corbett-sponsored bills to overhaul two state pension systems are still sitting in committee.
Fitch Ratings rates Pennsylvania's general obligation bonds AA-plus, while Moody's Investors Service and Standard & poor's assign Aa2 and AA ratings, respectively.