The Democrat said he released more than $23 billion, using used his line-item veto power for the first time since he took office in January. Among the rejected items was a proposed increase in the Legislature's appropriation.
At a Capitol news conference, Wolf said Republican lawmakers who "ran out of town" off for the year-end holidays needed to "get back to the work of the people."
"In doing this, I'm expressing the outrage that all of us should feel about the garbage the Republican legislative leaders have tried to dump on us," he said of his line item veto. "This budget is wrong for Pennsylvania. And our legislators - the folks we elected to serve us - need to own up to this. They need to do their jobs."
To make ends meet during the budget standoff, social service agencies were forced to lay off employees, many state-subsidized pre-kindergarten programs closed their doors and many school districts faced the possibility that they would not reopen after the holidays or run out of money.
Wolf's budget announcement does free up some money for the Philadelphia School District.
"We think we can operate further into the school year without the full budget. But understand, this is only a partial budget. This is not all of the monies that would be coming to Philadelphia, so naturally that will allow us to go much longer into the school year. Would it allow us to go through the school year? I don't know yet," Superintendent William Hite said.
Philadelphia's public schools had been slated to close on January 29th without a resolution to the budget stalemate.
The vetoed bill resembles a GOP budget plan Wolf rejected on June 30. He said it would leave a budget hole of about $500 million in the year that ends June 30 and an additional $2 billion in the next fiscal year.
It contains about $500 million less than a deal Wolf had negotiated with Republican leaders, who scaled down that plan last week after a companion bill that aimed to reduce state pension costs stalled in the GOP-controlled House. That plan would require up to $1 billion in unspecified tax increases.
Senate Republican leaders planned a noon news conference to respond to Wolf's announcement.
Wolf urged lawmakers to return to Harrisburg to reach a compromise.
"Let's get back to work to finish the job you almost finished last week," he said.
Rob Gleason, the state Republican chairman, said Tuesday that Wolf's June veto of the budget "needlessly plunged our school districts and nonprofits into a six-month crisis." He accused Wolf of making special interests his top priority.
"It is time for Tom Wolf to join with Republicans in enacting a fiscally responsible budget that puts our Commonwealth on the right track for the future," Gleason said.