Pennsylvania’s state treasurer is extending a $2 billion line of credit to prevent the state government from bouncing checks amid a 7-month-old budget fight between Democratic Gov. Tom Wolf and the Republican-controlled Legislature.
Treasurer Tim Reese said the Wolf administration drew $1 billion against the line of credit Wednesday. Reese said the state government’s cash balance was expected to be as much as $922 million in the red by next week.
Reese blamed the state’s shortfall on a long-term budget deficit that also required a $1.5 billion treasury loan in 2014.
The loan carries an interest rate of 0.6 percent, and payback is required June 30, Reese said.