In an out-of-town speech before the Senate session, Corbett defended his austere approach to running the state government and said the state must conserve its revenue to pay for the ever-spiraling bill for public employee pensions.

"We're going to need that money," the Republican told about 300 business people attending a Harrisburg Regional Chamber breakfast in Grantville, about 10 miles outside the capital.

Corbett did not rule out the possibility that he would support more spending than the flat-funded $27.1 billion he proposed in February. But he expressed skepticism that revenue collections would continue to outstrip projections and made it clear he considers a half-billion-dollar increase excessive.

"I would consider that to be a ceiling" in looming budget talks with legislative leaders, he said. "These are negotiations and negotiations have two ends and you work toward something in between."

The Senate spending plan for 2012-13 is nearly 2 percent more than the governor proposed, but still less than the three previous fiscal years because of the expiration of federal stimulus money and an ongoing recovery from the recession.

The bill would add money to reduce Corbett's proposed cuts to state-supported universities, public schools, hospitals, nursing homes and people who depend on county-run social services.

It would maintain Corbett's proposals for a $275 million business-tax cut and the elimination of the $150 million temporary cash-assistance program for poor adults, while leaving intact most of the deep cuts in public school aid that were in this year's budget.

House Majority Leader Mike Turzai said the House Appropriations Committee will review the Senate bill and work with GOP leadership to craft an amendment that reflects the caucus' preference. The Allegheny County Republican called the Senate bill "a good work product" that would keep the spending increase below the inflation rate.

The looming negotiations will be mainly among Republicans, who control the executive and legislative branches, although the governor, the Senate and the House often have conflicting priorities.

"I just try not to draw lines in the sand anywhere," said Sen. Jake Corman, R-Centre, chairman of the Appropriations Committee.

Twelve of the Senate's 20 Democrats voted for the bill, along with all 27 Republicans who were present.

Sen. Vincent Hughes, a Philadelphia Democrat who supported the measure, said it shows Republicans are sensitive to concerns of the Democratic minority.

"It seems that someone has finally been paying attention," he said.

Another Philadelphia Democrat, Sen. Anthony Williams, who opposed the bill, said it simply does not go far enough in restoring public services.

"I don't feel it's appropriate for us to be voting for this type of budget, since we've been saying for the last year and a half that this type of budget doesn't represent Democratic values," he said.

Corbett blamed the mushrooming pension costs largely on past increases in benefits and past underfunding. He said the tab is expected to grow from $1.6 billion in the year that starts July 1 to $4.2 billion four years from now.

The governor said he and legislative leaders are "beginning a dialogue" about a long-term solution.

"It won't be in this year's budget, but we have to fix it and we have to fix it now, because if we don't fix it, your grandchildren and my grandson, they're going to be in a world of hurt," he said.