HARRISBURG, Pa. — Auditor General Eugene DePasquale a statement today on his acknowledgement of Treasurer Timothy Reese’s decision to extend a $2 billion line of credit to the commonwealth to fund operational expenses:
“This is the second consecutive year the state hit a cash flow problem and needs to borrow money halfway through the fiscal year. As I said 16 months ago, the need to borrow money this early in the fiscal year is a strong indicator that the commonwealth’s unsustainable structural budget deficit continues to grow.
“Last year the state borrowed $1.5 billion for operational expenses, this year the line of credit goes up to $2 billion and is exacerbated by the prolonged budget impasse that has hurt the commonwealth’s credit worthiness.
“This line of credit is a more fiscally prudent avenue to provide short-term funding instead of paying fees and interest on the open financial markets, but it underscores a long-term budget problem that must be addressed.
“Hopefully, extending this line of credit will help the state quickly get funding to our schools reopening classrooms after the holiday break and to our social service agencies that have been greatly affected by the prolonged budget battle.
“The long-term structural budget deficit and this year’s budget impasse should be a wake-up call to everyone involved that it is time to come to a resolution on these critical issues.”
The governor is required to present his 2016-17 budget proposal in early February.
