PA Shows Growing Reliance On Short-Term Financing To Pay Its Bills
The state's acting treasurer says the amount of money slated to pay the interest on borrowing is going up under Gov. Tom Wolf's budget, showing a growing reliance on short-term financing.
Pennsylvania's cash flow problem has arguably worsened over the past year.
The Wolf administration got the OK to borrow $500 million from the state treasury to pay its bills. The latest round of borrowing builds on a $1.5 billion line of credit established by the Corbett administration last September.
Acting Treasurer Christopher Craig says the timing of that large loan was significant.
"The last time that that ever happened was in 1991, and that resulted in a PIT increase," he told lawmakers.
By PIT, he means personal income tax. Craig's warning came in response to an indignant Republican Sen. Scott Wagner of York County.
"The media is spinning, and I believe, they're spinning this borrowing," he said.
Wagner said this kind of short-term financing is common in the private sector.