HARRISBURG, Pa. — Pennsylvania's Democratic governor backed off his veto threat Wednesday on the GOP's $6.6 billion no-new-taxes spending package, ending nearly nine months of partisan gridlock that brought warnings that schools and agricultural extension offices could close.

The package will become law Sunday night, leaving Illinois as the only state still without a budget in place for the current fiscal year.

Gov. Tom Wolf had received increasing pressure from Democratic lawmakers to relent on this veto threat, and some raised the possibility of voting with majority Republicans to override Wolf.

Still, Wolf insisted that the budget remains out of balance and underfunds crucial needs, and that the state continues to need a major tax increase to wipe out a damaging long-term deficit.

Wolf called allowing the measure to become law "the right thing to do," even though he refused to sign the document.

The move by Wolf completes a $30 billion budget package, a 3 percent increase in spending. But it does so without a multibillion-dollar tax increase that Wolf had sought to deliver a record boost in aid to public schools and wipe out a long-term deficit that has damaged Pennsylvania's credit rating.

And it comes at the expense of school districts, social services agencies and county governments having to spend millions of dollars borrowing money to cover their costs during the impasse.

The Republican-penned package delivers a $200 million boost to public school aid, half of what Wolf had originally sought, and a 5 percent increase for state-subsidized universities.

The sides now will have to negotiate a new, election-year budget for the fiscal year starting July 1. Top Republican lawmakers have not agreed to a tax increase.

What's in the budget? 

Here are the highlights of what will become law, without Wolf's signature:



The main appropriations bill on Wolf's desk is an about $6 billion spending plan that completes a $30 billion spending package for the year, ending nearly nine months of partisan gridlock in Harrisburg. The package includes $578 million in aid to universities —Penn State, Temple, Pitt, Lincoln and the University of Pennsylvania's veterinary school.



In December, a Wolf-supported bipartisan agreement collapsed after House GOP leaders pulled their support. That had involved a $30.8 billion spending package and a tax increase of more than $1 billion that Wolf had sought to resolve a long-term deficit and to begin wiping out 2011's budget-balancing funding cuts to public schools.

As a fallback, Republican majorities passed the main appropriations bill in a $30.3 billion budget package, despite Wolf's opposition. Wolf vetoed $6.3 billion from the package, primarily for prisons, public schools and Medicaid reimbursements to insurance companies. University subsidies remained stalled in the House until Wednesday.



Republicans say a tax increase is unnecessary to make the $30 billion budget package balance. It would rely on a projected $30.9 billion in tax collections, plus an expected $50 million casino license fee, before subtracting more than $1.3 billion in refunds.



Republicans say the plan would use about $260 million in carried-over money and $200 million in unused program money. The state would forgo a $305 million payment it regularly makes for its portion of school construction projects and delay more than $200 million in payments for Social Security taxes for school employees and reimbursements to counties for child welfare costs.

It also counts about $150 million in savings in some Medicaid programs, in part because of enrollees becoming covered by broadened federal eligibility guidelines that carry a higher federal cost-sharing rate.



The appropriations bill carries just over $3.1 billion for public school instruction and operations, which would bring the total appropriated for the year to $5.9 billion, a $200 million increase. Wolf had originally sought a $400 million increase, and the bipartisan deal that collapsed had contained $350 million.

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