Gov. Wolf says he now believes a 2016-17 budget deal can be reached without hiking state sales or income taxes.
This comes as Wolf scales back his public education funding proposals.
Wolf made this statement Tuesday morning on KDKA-AM, a commercial radio station in Pittsburgh: "We need a balanced budget that is truly balanced. I want $250 million for basic education, an increase, and I want $34 million for the heroin overdose problem, which is really a big problem in Pennsylvania. And I think all this can be done without a broad-based tax increase."
Wolf had been seeking $350 million in basic education funding this year — $100 million more than what he's now asking for the state's main pot of public school cash.
In his first budget proposal in March 2015, he called for a $2 billion boost to all K-12 budget lines over four years.
If this new proposal goes through, Wolf would end year two only about a quarter of the way toward that goal.
"We still have a long way to go," said Wolf spokesman Jeffrey Sheridan in a telephone interview. "But we are working with a legislature that is controlled by a different party, and we're trying to find common ground and reach compromise with them."
The Campaign for Fair Education Funding, which is a coalition of more than 50 advocacy groups in Pennsylvania, has been calling for the state to increase basic education funding by $400 million annually for eight years.
Wolf says that's not politically possible. After a historically long budget battle last year, the state boosted total basic, special and block grant education funding by $245 million.
Spokesman Charlie Lyons says his members are not disappointed by Wolf.
"I think people recognize that he's pushing, but that's not to say that we don't think there needs to be more," he said.
Wolf had asked for broad-based tax increases in each of his first two budget proposals.
As part of a grand bargain that included revising the state pension system, there seemed to be consensus in the Republican-controlled Senate for such a tax hike in December.
But that bargain fell apart without support of leaders in the House.
Two of the additional sources of revenue now being considered are the proceeds from expanding gaming and increasing the state's cigarette tax.
Senate Republican spokeswoman Jennifer Kocher praised Wolf for backing away from proposals to hike sales or income taxes.
"We are happy the governor came to the realization that we cannot turn to taxpayers first when it comes to balancing the budget," she said.