Gov. Wolf Says Time Running Out On Budget Deal Before Downgrade

Faith Castro
September 21, 2017

Pennsylvania is now in the bottom five rated by Standard and Poor's.

That could mean tens of millions of dollars this year, particularly as lawmakers look to borrow $1 billion or more to help bail out the deficit.

"For months, I have warned that a credit downgrade was looming", Wolf said in a statement.

"We must reach an immediate resolution to the budget and today's news should be a wake-up call to come together and end this now", said Gov. Wolf. "If an agreement has not progressed by next week, I will be forced to take further steps to manage this situation".

In a statement shortly after news of the downgrade became public Wednesday, House Republican leaders said: "Pennsylvanians are paying taxes and it is very disappointing Commonwealth budget costs will increase thanks to a small group of unknown people at Standard & Poor's who make decisions based on interviews with a governor and press releases from the state's fiscal officers". "I would hope that next week when we are back in Harrisburg that the Senate will send something over, we can concur on this and get this process completed", said Rep. Doyle Heffley, (R) Carbon County. Instead, year after year, budgets passed with Republican majorities have been balanced with one-year revenues, phantom funds, and other budgetary gimmicks.

Finger-pointing and blame-shifting began immediately over a downgrade that had been expected for months without a tax increase or deep spending cuts. The House spent weeks out of town.

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"This credit down grade need not, and should not have happened. Called the majority leader of the Senate, called the majority leader of the House and we had a good discussion and I think they had a good discussion themselves", said Wolf.

"No doubt some Republican legislators and some advocates will say that the real cause of the budget deficit is overspending".

Senate Republicans shot back saying they agree with S&P's concerns about fiscal stability.

This marks the third consecutive late budget for Democrat Wolf and the Republican-controlled legislature since he took office in January 2015.

The state's deficit is manageable, Standard and Poor's said, but the agency said the state's reliance on one-time cash infusions has put too much stress on its tax collections to pay its bills on time. But in July, House Republican leaders pulled out of negotiations over a revenue bill, and serious talks have yet to restart.

As the budget deadlock in the Capitol drags on, a credit rating agency on Wednesday delivered a hard fiscal punch to Pennsylvania: a credit downgrade.

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