Pennsylvania's House of Representatives on Tuesday night passed a $31.6 billion budget bill as the deadline hovers for a new fiscal year.
The Senate is scheduled to begin debate on Wednesday after the 132-68 approval by the House. Given the lack of a final revenue plan to balance the budget, House approval essentially enables final negotiations with the Senate and Gov. Tom Wolf.
Fiscal 2017 will begin Friday. Pennsylvania was nine months late with its previous spending plan, which became law in March when Wolf allowed the document to take effect without his signature.
Wolf, a Democrat, has battled the Republican-controlled legislature overspending and revenue since taking office last year.
The commonwealth has received five rating downgrades in the last three years, with rating agencies citing budget imbalance and an unfunded liability estimated at $63 billion. Moody's Investors Service rates Pennsylvania GOs Aa3 with a negative outlook. S&P Global Ratings assigns AA-minus and negative, while Fitch Ratings assigns AA-minus and stable.
The rating agencies spared Pennsylvania further downgrades in advance of its $991 million sale of unlimited tax GO bonds on June 1.
Wolf during the week has urged lawmakers to pass a plan with sustainable revenue to support an increase in education and funding to combat an opioid crisis.
The House plan would raise overall spending by 5% and spending on public schools by about $200 million. Wolf wants an additional $250 million or schools and $34 million extra for heroin addiction treatment.
While specifics are lacking, the House budget would add tobacco taxes and revenue from pending legislation that enable Pennsylvania to conduct casino-style online gambling. Wolf said late Monday, following House appropriations committee approval, that it isn't enough to close a deficit that the legislature's Independent Fiscal Office projects could reach nearly $2 billion.
"The governor looks forward to continuing to work with the legislature, and as the budget moves through the process, he is hopeful all sides can reach an agreement that achieves these goals," the governor's press secretary, Jeffrey Sheridan, said in a statement.