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Pennsylvania Legislators Closer to Ending Budget Impasse

Pennsylvania lawmakers appear a step closer to ending a five-month budget standoff that's forced school districts to borrow close to $431 million and halt preschool and after-school services to stay afloat, according to the Associated Press.

Top state legislators told the AP Monday that they had struck a preliminary deal with Gov. Tom Wolf, a Democrat, that would increase the state sales tax by 1.25 percent and reroute $500 million of slot-machine gambling revenue to pay for school employee pension obligations.   

The state's public school districts would get $6.1 billion to spend in the 2015-16 budget year under the plan, a $350 million, or 6 percent increase for instruction and operations.

New public school and state government employees would get a diminished traditional pension benefit, plus a new 401(k)-style plan with a 2 percent contribution, resulting in $12.5 billion of savings in the coming decades, according to the AP. Republicans in the legislature have previously attempted to abolish the traditional pension benefit. 

There's still disagreement on whether to privatize the state-controlled wine and liquor system and how much to increase spending for state special education and prekindergarten programs, legislators said. 

After last year's budget cycle ended on June 30, the state stopped distributing its basic education subsidy when legislators couldn't agree on how to collect and distribute billions of dollars' worth of tax dollars.  School district officials have since warned that they will be forced to borrow millions of dollars to make up for the shortfall and end state-subsidized preschool and after-school services to keep school doors open. Some have also stopped giving money to their local charter schools, many charter officials say.  

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