Governor’s Budget Office Secures Short-term Loan from Treasury
By: Jeff Sheridan, Press Secretary
August 18, 2016
Due to persistent issues with Pennsylvania’s structural finances and past budgetary practices, the Office of the Budget found it necessary to take a Short Term Investment Program (STIP) loan from Treasury.
When Governor Wolf took office, we inherited a budget deficit of more than $2 billion. While we have made significant progress reducing the deficit, including the enactment of a 2016-17 budget with recurring and sustainable revenue, more work remains. Cash flow needs will require short term borrowing to continue throughout the fiscal year, until newly adopted revenues are fully implemented and collected.
We have recently seen positive signs regarding the commonwealth’s financial outlook from S&P, who removed the commonwealth from CreditWatch, Moody’s, who revised the commonwealth’s financial outlook to stable and upgraded our school district intercept programs, and from the results of our $1.2 billion bond sale that received strong interest from multiple banks and showed that the market recognizes that Pennsylvania is on stronger financial footing.
All of these recent actions will allow the commonwealth and districts to borrow money at lower costs and save taxpayers money. The governor looks forward to continuing to work with the legislature to finally fix the deficit and move the commonwealth forward.
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