Budget Office Draws on Line of Credit from Treasury for 2nd Time This Year
Pennsylvania’s cash balance approaches zero again
Harrisburg – Pennsylvania’s primary operating account, the General Fund, nearly ran out of cash for the second time in less than two months yesterday, causing the Corbett Administration to borrow additional money from the state Treasury.
Treasurer Rob McCord said the state Budget Office drew $750 million from a previously established line of credit on Wednesday afternoon to avert another negative cash balance in the General Fund. That brings the total amount borrowed from the Treasury in the current fiscal year to $1.45 billion. The administration expects to borrow the remaining $50 million left in the credit line next week.
“We see a deteriorating financial scenario that casts serious doubt on Pennsylvania’s ability to balance its budget this year,” McCord said. “The state’s fiscal health remains precarious.”
The McCord Treasury created a $1.5 billion line of credit in September, when the state’s General Fund cash balance fell below zero by $20 million. At that time, the administration borrowed $700 million to maintain normal operations. The move was followed within days by a downgrade of Pennsylvania’s credit from two rating agencies – Fitch and Standard and Poor’s.
Click here to read a news release from September 16 that contains details about the line of credit and the state’s financial condition at the time it was established.
For more information, visit www.patreasury.gov.
Media contact: Gary Tuma, 717-787-2465 or firstname.lastname@example.org