Wolf says time running out on budget deal before downgrade

Georgia Reed
September 22, 2017

After months of warnings, S&P Global Ratings has downgraded Pennsylvania's credit, citing concerns over its chronically unbalanced budget.

S&P's report cites a litany of concerns about Pennsylvania's finances, including a almost decade-old structural deficit, habitually late budgets, and recent failures to make mandatory payments on time.

Pennsylvania has been without an operational budget since June, when the Republicans adopted a bipartisan spending plan of almost $32.0 billion.

This plan came out of the state Senate, voted for by 75 percent of Senate Democrats and a handful of Republicans, in name only, backed by Wolf. "I have said repeatedly for three years that we must responsibly fund the budget with recurring revenues". Perhaps the clanging of the sword will awaken the many responsible Republican legislators in both the House and Senate and lead them to demand serious action to resolve the budget crisis quickly and reasonably.

Governor Tom Wolf said if budget negotiations haven't progressed by next week, he'll "be forced to take further steps to manage this situation".

Over the past week, Pennsylvania missed about $1.7 billion in medical reimbursement payments and another $581 million in pension-related bills, S&P noted. But the House has opposed the tax increases.

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"The Senate understood the need for urgency and acted responsibly in July to fully fund the budget and enact recurring revenues to eliminate the deficit, and my administration has tried for weeks to hold off a downgrade".

The Senate will take up a house proposal that was passed lat week, which would take money from PennDOT and the E.P.A's coffers that are not being used.

House Republicans, however, pushed back on that concept and instead passed a revenue plan that relies heavily on what they call the $1 billion "sale" of a state "asset".

Without a plan to close the $2.3-billion budget gap for fiscal 2018 in place, the two said lending to the state, under the current political climate, would be an economic "moral hazard" that would increase long-term risk.

House Democratic Leader Frank Dermody of Allegheny County called today's news a blow to the state's fiscal standing, but also an opportunity for everyone to get back to work on a "real budget solution".

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