Pennsylvania’s acting treasurer is cautioning lawmakers not to take the state’s recent short-term internal borrowing too lightly.
The amount of money slated to pay the interest on borrowing is going up under Governor Tom Wolf’s budget, showing a growing reliance on short-term financing, said Christopher Craig.
“Now there’s nothing inherently bad about that, but it’s not a habit that you want to get into,” he said.
The Wolf administration was authorized to borrow an additional $500 million from the state treasury earlier this month, building on a $1.5 billion line of credit taken out by the Corbett administration in September. Craig said the borrowing authorized under Corbett was remarkably large – and remarkably early.
“Every governor, Democrat or Republican, it doesn’t matter the party affiliation, relies upon short-term financing to get through difficult dips in the year. The difference is last year it occurred in September and at a number of $1.5 billion,” said Craig. “The last time that happened was 1991.”
Shortly after that, state lawmakers passed an increase in the personal income tax rate.
Craig was responding Tuesday to an indignant Sen. Scott Wagner, R-York County, who said “the media is spinning, and I believe, they’re spinning this borrowing.”
Wagner said short-term financing is common in the private sector.