State Treasurer Joe Torsella has extended a temporary, $750 million line of credit to keep Pennsylvania’s general fund balance from running dry this month.
He’s calling the situation “extraordinary and without precedent.”
That doesn’t quite square with the way Governor Tom Wolf has appeared to downplay the impact of the state budget still being unbalanced, over a month into the fiscal year.
Wolf has repeatedly pushed for the general assembly to close the budget’s $2 billion funding gap, and has emphasized it needs to happen soon to avoid a downgrade by credit rating agencies.
But when asked if the state is in imminent fiscal danger, he takes a more positive stance.
“Revenues are coming in every day,” he said in a recent interview. “We just ended July revenues—we’re up six-and-a-half percent…That’s certainly higher than the increase in expenditures, which is less than one percent.”
Mike Connolly, a spokesman for the Treasury Department, said that uptick is not nearly enough to cover costs, and that by the last two weeks in August, the general fund will probably be empty.
Connolly says the $750 million loan can’t keep the state going for long—but it’s all the Treasury can do for now.
“We don’t have any clarity on what the state’s budget situation will be for the year, since only half of a budget has been passed,” he said.
This is the earliest a credit line has been used in decades, though not by much.
Last year, the general fund needed credit by mid-August, and ultimately borrowed $2.5 billion.