S&P downgrades Pa.'s credit rating due to unresolved revenue plan

Capitol building in Harrisburg

Citing the budget stalemate and the state's chronic structural budget imbalance, Standard and Poor's Wednesday lowered Pennsylvania's credit rating.

Pennsylvania's credit rating took its latest punch Wednesday, another black eye in a almost three-month budget stalemate that has pitted Democratic Gov. Tom Wolf and the Republican-controlled Senate against the Republican-controlled House of Representatives. "We agree with S&P's concerns about the need for stability in our financial plans to address the ongoing structural deficit".

Governor Tom Wolf said if budget negotiations haven't progressed by next week, he'll "be forced to take further steps to manage this situation".

The downgrade means Pennsylvania will pay more to borrow money: an estimated $10.0 million for every billion dollars the state borrows or refinances. Instead, year after year, budgets passed with Republican majorities have been balanced with one-year revenues, phantom funds, and other budgetary gimmicks.

"We understand", Spain said, "that the commonwealth plans to make payments to both the Medicaid insurers and school districts within a week of the scheduled due dates; however, in the absence of additional liquidity, and with the likely need for external borrowing, these late payments could recur".




Senate GOP leaders responded by saying compromise must happen immediately and that they are standing behind the July budget package.

Lawmakers authorized almost $32 billion in spending on June 30 and have grappled ever since with how to fully fund it.

"So what we have seen in the last five years is that right-wing legislators send press releases objecting to state spending totals, and refuse to fund the budget with recurring revenues, but never actually name, let alone enact the cuts necessary to balance the budget". It went nowhere in the General Assembly because Republicans can never raise taxes, even to pay off the debt they created.

House Democratic Leader Frank Dermody of Allegheny County called today's news a blow to the state's fiscal standing, but also an opportunity for everyone to get back to work on a "real budget solution".

"Meanwhile, the House Republicans were leading the way as they uncovered billions - yes, with a 'B"! - in extra funds.

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