Experts discuss Pennsylvania borrowing more money
Once again, the governor needed to borrow money to pay the Pennsylvania's bills. Experts say it's time to stop borrowing, and get a plan on the books.
It has now been 104 days since a balanced budget was due. Almost midway through October, there's a spending plan, but no way to pay for it.
What happens when the bills are due? The answer is to borrow money from the treasurer's reserve fund, which is something Treasurer Torsella previously said he wasn't going to do again.
Nathan Benefield s the Vice President of Policy Analysis with the Commonwealth Foundation. Benefield said, "Lawmakers came in and debated and went home without bouncing a budget. Governor Wolf got angry, and it seems like he’s doing this with pressure from the governor and do it as a temporary loan.”
$700 million was put on loan to pay medicaid bills, and needs to be paid back by October 20.
Auditor General Eugene Depasquale had a few things to say about it.
“If the negotiations are truly over I think anything the treasurer can do to try and make sure the state continues to function and not have a credit downgrade is an important thing to do," said Depasquale.
Experts are at odds over what the solution is to these budget woes.
Stephen Herzenberg with the Keystone Research Center says at this point, a natural gas tax could help, or the governor's proposal to bond the state's liquor sale revenues.
"There’s a way in which this is burning the furniture to heat the house," said Herzenberg, "I mean that may be a little strong, but what it means is that when you use, for example, the money from one wine and spirits stores, I mean you don’t have that revenue in the future years because you’re taking the money upfront.”
However, Benefield says he believes liquor privatization may be the answer.
Benefield said, "We believe, and I would say that some sort of liquor private position of that should be part of that solution, and could be used both as a good, it’s a good policy for consumers and could help alleviate the need to raise taxes."
In the announcement Thursday, there was no implication on what would happen if the money was not paid back by October 20.
Last time it happened, the state did meet the deadline.