The State Treasurer Tuesday announced the Wolf Administration drew another $1.2 billion against the $2.5 billion line of credit that Treasury extended to the Commonwealth last month.
On August 16 the Administration drew $400 million on the line of credit.
Accessing the additional funds once again prevents the General Fund cash balance from falling into the negative.
Tuesday’s draw, combined with the $400 million the state previously borrowed against the credit line to prevent the General Fund from running out of money, brings the total amount borrowed to $1.6 billion. The line of credit has $900 million remaining.
“Continuing to borrow to pay our state’s bills clearly illustrates Pennsylvania’s poor financial health,” Pennsylvania Treasurer Timothy Reese said. “The line of credit merely addresses the symptoms and does nothing to cure the cause – our state’s structural deficit.”
The $2.5 billion line of credit has an interest rate of 0.75 percent on the money borrowed against it. The state is required to pay back the loan to Treasury by June 30, 2017.