Treasurer Authorizes Major Loan To Cover State Expenses
The state Treasury has authorized a major $1.8 billion loan to keep Pennsylvania's general fund from running out of money.
It comes just in time for the commonwealth to make major public school payments.
Over the last several years, it became routine for the Treasury to extend large loans early in the fiscal year, because the bulk of state revenues have tended to come in later months.
But this year, Treasurer Joe Torsella refused to follow suit until the state budget was finished--calling it irresponsible to do so.
The Senate and Governor Tom Wolf supported the decision to delay the loan, though House Republicans didn't.
Wolf still hasn't confirmed whether he'll sign the legislature's now-complete revenue plan, but Torsella said he's comfortable lending the money based on the administration's promises to manage funds responsibly.
In a statement, Torsella said because of the "unusual events surrounding this year's budget," the Treasury opted to add provisions to the loan that would "secure Treasury's investment, and provide alternatives if circumstances change."
He also said his department would be putting together some concrete standards for lending to the state, should a similar budget standoff reoccur.
The newly-announced loan comes from the Treasury's Short-Term Investment Pool, and has to be repaid with interest by April.