Pa. may consider borrowing funds to help pay down pension debt

     Pennsylvania Senate President Pro Tem Joe Scarnati and other GOP leaders are considering borrowing to help pay down the state's pension debt, a spokesman says. (AP file photo)

    Pennsylvania Senate President Pro Tem Joe Scarnati and other GOP leaders are considering borrowing to help pay down the state's pension debt, a spokesman says. (AP file photo)

    Pennsylvania lawmakers are just in the early stages of negotiating with Gov.-elect Tom Wolf over how to deal with the state’s spiking public pension payments.

    But Senate Republican leaders say they are willing to consider a move conservatives have ruled out in the past.

    Some have suggested borrowing a few billion dollars to help pay down part of that debt – a gamble that counts on favorable interest rates staying favorable.

    While many conservatives say that’s too risky, Drew Crompton, chief counsel and spokesman for Senate President Pro Tem Joe Scarnati, said the Senate GOP is still considering it.

    Any borrowing should be paired with changing pension benefits, he cautioned.

    “It absolutely can’t be some sort of, we’ll go borrow a couple billion dollars and declare victory. I think banks in New York that do credit ratings would have a very adverse reaction to that, as they should,” Crompton said. “It’s not a solution. The question is, is it part of the equation?

    Wolf has said he’s open to borrowing to score more favorable interest rates to help pay down some of the pension debt.

    Such a move has been opposed by conservative lawmakers and the Corbett administration for being too risky. Pension obligation bonds, as they’re called, were outlawed by Pennsylvania lawmakers in 2010.

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