Treasurer Reiterates, No Loans Until The Budget’s Done
State Treasurer Joe Torsella has found himself at the center of contentious battles over funding Pennsylvania’s unbalanced budget and paying the commonwealth’s bills.
Last month, Torsella decided he wouldn’t loan money to cover short-term expenses until the budget is done. The state has since had to delay some payments
He maintains his decision was responsible.
The practice became routine over several years in Harrisburg: at the beginning of the fiscal year, general fund revenues often come in after bills are due, so the Treasury started extending short-term loans to cover costs during low periods.
But when the fund ran low this year, Torsella—who took office in January—stopped the quasi-tradition.
“Is it prudent to make an unprecedented loan to a borrower that doesn’t yet have a plan in place to bring revenues and expenditures into balance? The simple answer is no,” he said.
That has earned him criticism from lawmakers—particularly House Republicans—some of whom have called it a political stance.
House Appropriations Chair, Republican Stan Saylor, has been one of the vocal critics.
“I believe that as long as we have a state budget in place and there’s money there, we can borrow from ourselves to pay the bills,” he said. “I don’t want people not to receive the payments that they should justly get when we have the money sitting there.”
Speaking at a Pennsylvania Press Club event, Torsella said his decision was not partisan, and added that he’s reining in a practice that has helped the commonwealth ignore its structural issues.
“Has the short-term borrowing that’s enabled us to get through years and years—has it had the outcome of putting us on sounder footing?” he asked. “I think the answer you have to say to that is no.”
Torsella said he personally supports taxing natural gas drillers—but added that he’ll authorize more loans when the commonwealth passes a balanced plan, taxes or not.