Gov. Tom Wolf’s proposed $32.3 billion state budget offers a conciliatory acceptance of political reality.

Wolf abandoned earlier budget proposals to raise income and sales taxes that were dead on arrival before the Republican-dominated General Assembly. He has unveiled a spending plan that should open the way to negotiations and avoid the harmful stalemate of his first budget in 2015 that dragged out for nine months.

His plan includes modest spending increases and calls for saving $100 million through the consolidations of the prison and parole divisions into one unit and the merging of the health, aging and drug and alcohol agencies into one office. Another $143 million would be saved by reducing the number of state employees and his desire to slash tax credits and lower the corporate tax rate by fully closing the “Delaware loophole” would add revenue without tax increases on individuals.

On the revenue side, Wolf rightly pushed again for approval of an extraction tax on gas production that has been blocked by Republicans for years in favor of a fee that benefits drilling communities. It generates a fraction of the revenue that a severance levy would produce and it does nothing to address the state’s $2 billion structural deficit.

His endorsement of $100 million more in basic education spending helps reduce the shortfall in state funding to local districts, where property tax rates have jumped in recent years partly to make up for the deficiency.

An increase in the state’s minimum wage of $7.25 an hour is long overdue and Wolf’s pitch to boost it to $12 an hour would benefit 1.5 million workers and generate an estimated $95 million.

The governor’s plan provides multiple gestures to accommodate the Legislature’s Republican majority. Their responsibility now is to bargain for a reasonable compromise.