Gov. Tom Wolf is taking another step in the quest to cut Pennsylvania spending in the face of a burgeoning deficit and a GOP-led Legislature firmly opposed to raising taxes.
The administration is shifting investment management of three state funds from private managers to the state Treasury.
The State Workers’ Insurance Fund, Workers Compensation Security Fund, and Underground Storage Tank Indemnification Fund are all relatively small pools of state money currently managed by dozens of outside investors.
The governor said eliminating those private managers makes good financial sense.
“The Treasury of Pennsylvania does this for billions of dollars on a routine basis,” he said. “Why not just hand this over to the Treasury of Pennsylvania, consolidate the management — it’ll save about $5.6 million.”
Wolf noted that $5.6 million isn’t a lot in the big picture, but he hopes to make more moves along these lines to save additional funds.
The funds were chosen because they’re under jurisdiction of the executive office, meaning Wolf doesn’t have to get legislative approval for the move.
This is just the latest in the state’s efforts to cut spending in the face of a $600 million projected revenue shortfall this fiscal year and a nearly $2 billion structural deficit.
In his last two budgets Wolf, a Democrat, has unsuccessfully attempted to pass broad-based tax hikes, but maintains that won’t be the case this year.
“We have to be really creative here,” he said. “We’ve got to figure out how we can do the most with what we have.”
Some Democratic state lawmakers have raised doubts about whether the commonwealth can address its debts without new revenues.