Lawmakers Considering Borrowing Money To Balance Budget
The Republican majority leaders of Pennsylvania’s House and Senate say they’re determined to put together a budget without raising taxes.
That means making up this year’s $1.5 billion shortfall, plus accounting for a roughly $3 billion structural deficit.
To get it done, the final plan is likely to involve significant borrowing.
One option under consideration would involve using an asset as collateral to get a loan, which would be paid off over 25 years or so.
Several assets could be used. One contender is the state’s significant tobacco fund, which comes from a settlement with tobacco companies two decades ago.
Senate Appropriations Chair, Republican Pat Browne, noted that other states have used the same tactic.
“A long list of many options are on the table,” he said when asked if the loan was a possibility. “It’s not ahead of anything at this point in time, [to the point where] I could say definitively that that is part of the plan.”
Browne said the revenue plan isn’t set in stone, but he's adamant that tax increases aren’t happening.
He also said Republicans are skeptical of Governor Tom Wolf’s proposal to save money by consolidating the state’s four biggest health agencies.
“There is a general thought that a $42 billion merger—the due diligence process over four months is very fast,” he said.
However, he said some of those savings could potentially still be captured by lowering the reimbursements the state pays pharmacies.