BLOG: Pennsylvania’s Checkbook
By: Sophie Stone, Deputy Press Secretary
March 02, 2016
Most people use a checkbook and understand how they work. They deposit money in their bank account and write out checks to pay their electricity bill, heating bill, car payments and credit cards. Every month the bank sends a statement. Most people also know that if they write checks for more money than is in their checkbook, their bills will not be paid and the bank will be charge a fee for writing the “bad check.”
Let’s take a look at how Pennsylvania has been managing its checkbook.
For many years, Pennsylvania wrote out more checks than was available in its bank account. This left the commonwealth with an unbalanced checkbook and not enough money to pay the bills. In order to cover for the checks, the commonwealth used different gimmicks. Bills were shuffled around, payment dates were moved, and money was taken out of accounts that were not supposed to be used to pay the bills. Pennsylvania delayed paying bills in order to make its bank account look better than it really was.
Sooner or later delay tactics and gimmicks eventually catch up with us. Sooner or later the bills are due. If bills are not paid , the lights go off, the heating is shut down, and the credit card company demands payment.
Pennsylvania’s checkbook is in bad shape and the commonwealth is facing a $2 billion budget deficit. This deficit is a fact. Independent credit rating agencies like Fitch, Moody’s, and Standard and Poor’s – have each downgraded Pennsylvania’s credit, a total of five times over the last five years. Pennsylvania’s credit has actually been downgraded three times in the last two years alone. They too understand that Pennsylvania’s checkbook is woefully underfunded and out of balance, we’re not paying our credit card bills, and they’re raising our APR.
Pennsylvania’s economy is much different and more complex than the average family, but it’s operated by the same principles.
We can’t stay on the same path much longer. We need to balance our budget with sustainable revenues that address our more than $2 billion deficit.
It’s time to balance Pennsylvania’s checkbook for the first time in years. It’s time to finally pass a balanced budget.
Read more posts about Governor Wolf’s 2016-17 budget.
Like Governor Tom Wolf on Facebook: Facebook.com/GovernorWolf