When looking at your financial picture, there are things to take into consideration. It isn’t just about how much you make and how much you spend. There’s also how much credit you have and how much you have in savings.
Pennsylvania’s top money men said Wednesday that the state’s savings is getting “dangerously low.”
Auditor General Eugene DePasquale and Treasurer Joe Torsella made their joint pronouncement through a letter to Pennsylvania’s legislators.
“We write to bring to your attention the deteriorating condition of the Commonwealth’s General Fund. As constitutional officers entrusted with the financial oversight of public funds, it is our responsibility to share with you our current projections and concern that the General Fund will post a negative balance for approximately eight continuous months in the next fiscal year. Using historical revenue and expenditure data, we project a need to borrow as much as $3 billion to maintain routine budgeted operations between July 2017 and April 2018,” the two Democrats wrote.
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Borrowing money, they said, isn’t unusual. Many government bodies get tax anticipation loans to cover funding needs before revenue comes in.
DePasquale and Torsella said the state’s requirement is about to move from those manageable levels to a “chronic need for billions of dollars.”
In July 2016, the state’s general fund balance was $2.73 billion —$500 million less than where it was in July 2015. In July 2017, they say it could be $850 million less than that. Recent numbers from the Department of Revenue put fiscal-year-to-date receipts at $1.1 billion less than estimates say is needed to cover state spending through June 30.
“To be clear, absent appropriate and significant fiscal changes, Pennsylvania will be paying the bills on borrowed money for most of the 2017-18 fiscal year. The continued drop in the average annual General Fund balance is indicative of a structural imbalance between revenues and expenditures. Without a correction to this imbalance, we anticipate the trend of lower General Fund average balances to continue to worsen in the coming years,” the two wrote to legislators.
The state has not nailed down a budget for the new fiscal year yet. Democratic Gov. Tom Wolf is facing off with the Republican-led legislature over different priorities moving forward. One of the Republicans on the other side of the table is state Senate Majority Leader Jake Corman, R-Benner Township.
“To translate all of their fiscal speak, basically they are telling us that we should turn to the taxpayers for more money,” said Corman’s spokeswoman, Jennifer Kocher. “As we continue with budget negotiations, we remain committed to our responsibility to examine all other avenues and make turning to taxpayers our last resort, not the first.”
Corman has been adamant through three budget negotiations that spending has to be curtailed while the state addresses its pension crisis.
State Rep. Scott Conklin, D-Rush Township, said he wants to see cooperation to address the financial issues.
“We cannot keep kicking the can down the road. We must come together and fix the problem. I have submitted many proposals and they have all fallen on deaf ears. The time to act is now,’” he said.