The Pennsylvania government is in some tough financial straits.
Last month, the state was running low on funds and had short-term expenses to pay. So, the treasury extended a $2.5 billion line of credit. The state immediately used $400 million of that money.
Now, it’s dipping into that credit again, recently drawing $1.2 billion to cover another set of immediate costs.
That money eventually has to be paid back with interest.
State treasury spokesman Scott Sloat said this is a recurring issue with the state.
“Unfortunately, it’s getting more and more common,” he said. “I think this is something that, over the last several years, you’ve seen an increase in the amount of times the state has had to borrow from the treasury pay its bills. And not only that, the amount that they need to borrow is increasing as well.”
Sloat said the state’s lack of financial flexibility shows institutional problems.
“Our revenues don’t come in on a regular basis — you know, there’s peaks and valleys,” he said. “Ideally the state would have enough money to withstand when there are valleys in the revenue. Unfortunately that’s not the case, which is why they have to borrow.”
When the budget was passed in July, the state’s Independent Fiscal Office valued its revenue package at $266 million short of what the state projected.
That shortage now appears to be even larger.
The administration didn’t respond to a request for comment.