HARRISBURG, June 30 (Reuters) - Pennsylvania lawmakers passed a $32 billion state spending plan on Friday but a revenue package to pay for it all and close a $2.3 billion deficit will not come until after the next fiscal year begins on Saturday.

Democratic Governor Tom Wolf has 10 days to sign the legislation before it becomes law automatically, as it did last year.

"This budget is not perfect," said Senate Majority Leader Jake Corman, a Republican. "Like many budgets, it is a compromise."


The fiscal 2018 budget is about $450 million higher than last year. The Republican-led legislature, which opposes tax increases, could return as early as Wednesday to decide how to fill the hole in the budget.

The shortfall is due in large part to revenue collections this fiscal year falling $1.6 billion short of expectations.

In order to close the gap, the state is considering borrowing $1 billion, to be repaid with money U.S. states still receive every year from their 1998 legal settlement with tobacco companies for health expenses.

Pennsylvania also could raise revenue by further privatizing the state's liquor sales system or by allowing thousands of video gambling devices to be installed in bars and clubs, a move being fought by the state's casino industry.

Democrats want a severance tax on oil and gas production that would feed the general fund. That idea has failed to pass in previous years.

Wolf said the plan provides $175 million more for public schools, including special education. He said his administration restored $800 million of public education cuts made by his Republican predecessor.

"But there is still work to do," Wolf said in a statement. "Pennsylvania cannot get ahead if we do not take our responsibility for long term financial stability seriously."


Many line items in the 2018 budget are flat or below last year. Public library funding went unchanged, welfare fraud investigation was cut by almost $1 million, prison medical care by $4.6 million, and the state police by $4.7 million.

"I feel like we've been running on a treadmill for years," Senator Daylin Leach, a liberal Democrat who voted against the budget, said in a statement.

"We should be considering options that honestly pay for our priorities but instead, year after year, we borrow money, shift around money, and magically make money using inflated estimates," he said. (Reporting by David DeKok in Harrisburg, Pennsylvania; Additional reporting by Hilary Russ; Editing by Bill Trott; editing by Daniel Bases)