Friday File


September 22, 2017

PA’s credit downgraded

In the midst of the state’s budget stalemate, S&P Global Ratings downgraded Pennsylvania’s credit rating. The state’s bond rating went from AA- to A+. Overall it means “higher borrowing costs when the state issues or refinances taxpayer-backed bonds in the future.” The lowered rating puts the state only ahead of Illinois and New Jersey. Contributing factors to the downgraded are cited as in part, last year’s budget and the deficit that continued into this year; the failure to finalize a budget for the current fiscal year, a recent history of late budget adoptions, and Treasurer Torsella’s decision not to extend a line of credit.

Governor Wolf made a statement citing his warnings that the downgrade was coming; he praised the Senate for their efforts to pass a budget with recurring revenues. House Republicans took their turn and partially blamed Auditor General Eugene DePasquale and State Treasurer Torsella for the downgrade; citing their approval of deficit spending and failure to authorize bill payments.

As for the budget itself: the Senate voted against the House’s version of the budget this week and is sending the bill to a conference committee for consideration. Stay tuned…