Pennsylvania Credit Rating Takes Hit After Budget Standoff

Pennsylvania Credit Rating Takes Hit After Budget Standoff

Call your state senators and tell them to approve the state House's no-tax-increase plan. First off, the Commonwealth of Pennsylvania spends more than $80 billion per year on everything.

The budget bill also seeks a $1 billion lump-sum payment by selling rights to a portion of the state's tobacco settlement fund, which now receives about $350 million per year. "What we've seen is that typically, the budgets are not balanced".

Pennsylvania's credit rating took its latest punch Wednesday, another black eye in a almost three-month budget stalemate that has pitted Democratic Gov. Tom Wolf and the Republican-controlled Senate against the Republican-controlled House of Representatives.

The Senate has not yet taken action on the plan, while the state treasurer and auditor general have refused additional lending to the general fund.

Governor Wolf declared the downgrade a "wake-up call".

"This credit down grade need not, and should not have happened".




"We view it as possible that lawmakers could fail to reach a compromise" by then, Spain said. But spending has declined as share of state GDP for the last five years, and the main reason for our structural deficit is cuts to corporate taxes and our upside-down tax system.

Democratic Gov. Tom Wolf supports a revenue plan passed by the Republican-controlled Senate in July.

Lawmakers authorized almost $32 billion in spending on June 30 and have grappled ever since with how to fully fund it.

In a two-page letter sent September 12 to lawmakers and Wolf, state Treasurer Joseph M. Torsella and Auditor General Eugene A. DePasquale, both Democrats, cited the state's imminent inability to pay its bills.

They said the Treasury should let the state keep spending despite the funding gap, because "revenue is still coming in". Perhaps the clanging of the sword will awaken the many responsible Republican legislators in both the House and Senate and lead them to demand serious action to resolve the budget crisis quickly and reasonably.

"Unfortunately for the citizens of the state, the sword has fallen today and we will all pay the price for the fundamentally irresponsible and dishonest approach to state budgeting taken by Speaker Turzai and his followers".

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