The governor’s budget office is borrowing once more from Pennsylvania’s Treasury to meet operating expenses. The move will avert cash flow problems that Treasury officials says were created by the state budget.
State Treasurer Rob McCord said the Corbett administration expects it will soon hit the limit of a $1.5 billion line of credit established back in September.
The governor’s spokesman said this kind of internal borrowing was necessary to pay bills at a time when revenue is typically low and spending is high.
“We had every intention to do it,” said Jay Pagni. “The first quarter, the first two quarters of the fiscal year, are not our large revenue collections.”
But Treasury spokesman Gary Tuma said this year’s rounds of borrowing are notable for what they say about the lack of a financial “cushion” in the state’s budget.
“This is more borrowing — and earlier borrowing — than has been necessary in recent years or even going back maybe 10 or 15 years,” Tuma said. “The general fund balance is weaker than it has been in a long, long time.”
Tuma and the Corbett administration said there are no plans to arrange an additional line of credit.
The administration borrowed $700 million in September, then another $750 million this week, with plans to take the $50 million remaining in the line of credit in the next week or so.
“It’s really an indication of a deeper, structural revenue problem,” said Tuma. “A deeper, structural budget problem that Pennsylvania has that isn’t experienced over the last, really, several decades.”