Pennsylvania May Need Outside Lending Help To Prop Up Budget
Pennsylvania's state treasurer and auditor general are warning lawmakers that the state government's worsening long-term deficit may require it to borrow money from an outside lender to prop up routine budgeted operations.
Wednesday's letter to lawmakers says the state may need to borrow as much as $3 billion while its main bank account has a negative balance for eight months between July and next April.
The letter comes as Democratic Gov. Tom Wolf and the Republican-controlled Legislature eye a projected $3 billion deficit through July 1, 2018. That's almost 10 percent of approved spending.
In recent years, the state has drawn on a low-interest credit line from the treasury. But Treasurer Joe Torsella and Auditor General Eugene DePasquale say there may not be enough money in the treasury's long-term investment fund to meet the state's needs.