BLOG: More Consequences of Pennsylvania’s Structural Budget Deficit

By: Jeff Sheridan, Governor Wolf's Press Secretary

January 07, 2016

Yesterday, the Treasurer extended a $2 billion line of credit to the commonwealth. Until the Republican-controlled legislature passes a balanced budget that fixes the structural budget deficit that has resulted in multiple credit downgrades to the commonwealth, we will continue to experience severe financial hardships. As a result, loans such as this are necessary. The Republican leaders need to call the legislature back into session to finish the work they left incomplete before recessing for holiday vacation.

As S&P warned last week, Pennsylvania’s fiscal challenges remain and the Republican legislature must act responsibly to balance Pennsylvania’s budget. In their release, S&P said:

“Despite six months of deliberations, Pennsylvania’s budget deliberations continue, leaving it uncertain whether legislators will act to close the state’s budget gap… The $30.3 billion budget passed by both the house and senate is, in our view, structurally unbalanced and does not include pension reforms negotiated in the previously agreed-upon budget framework. As proposed, the budget had a $500 million budget gap for fiscal 2016 and left a $2 billion budget gap for fiscal 2017… As the state’s longest running budget impasse persists, the question of lawmakers’ political willingness to address fiscal challenges remains.”

You can read S&P’s full bulletin here.

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