BLOG: Two More Credit Rating Agencies Warn of Coming Fiscal Catastrophe
By: Jeff Sheridan, Press Secretary
March 25, 2016
Only one day after PNC said, “there is nothing that has occurred in recent weeks or months that leads us to believe the spending plan will begin to put Pennsylvania back on a path to structural balance. We do not expect the budget to come close to solving Pennsylvania’s fiscal pressures, including its structural budget gap, which is sizeable and growing,” and further warned that “without broader policy changes, Pennsylvania’s structural deficit will worsen,” two more credit rating agencies are warning of Pennsylvania’s forthcoming fiscal catastrophe.
Here’s what they’re saying:
S&P: “The outlook is negative. The negative outlook reflects our view that although the passage of the fiscal 2016 budget lays the groundwork for deliberations on the fiscal 2017 budget, lawmakers still face a projected budget gap for fiscal 2017. By failing to address long-term structural balance in fiscal 2016, lawmakers have pushed difficult fiscal decisions to the fiscal 2017 budget…Our negative outlook rather reflects our view that the state’s fiscal issues lie in lack of political will to solve them in a timely manner…”
Moody’s: “Pennsylvania’s 2016 Budget Doesn’t Solve Its Long-Term Challenges: On Wednesday, March 23, Commonwealth of Pennsylvania (Aa3 negative) Governor Tom Wolf said he would not veto the fiscal 2016 budget the legislature had passed, smoothing the way for the budget bill to become law on March 28. This officially ends the stalemate over Pennsylvania’s fiscal 2016 budget, but only brings to the fore a likely new stalemate over the budget for the fiscal year that starts July 1 and ongoing questions over the state’s progress toward structural balance over the longer term.”
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