Gov. Tom Wolf Friday announced the state will delay paying over $1.7 billion owed to managed care organizations ($1.169 billion) and the PA School Employees Retirement System ($581 million) until at least September 21.
In a statement, the Governor’s Press Secretary J.J. Abbott said, "The Commonwealth will be unable to make these important payments for at least a week, which will likely force many of these entities to have to borrow money, an expense they can charge back to the taxpayers.
"Without a completed budget, the Commonwealth’s Treasurer and Auditor General have said they are not currently inclined to authorize the normal short-term lending that would typically allow for seasonal cash flow interruption. Delayed payments will remain stalled until funding exists to meet commitments.”
House Appropriations Committee Majority Chair Stan Saylor (R-York) appealed to Treasurer Joe Torsella and Auditor General Eugene DePasquale in a letter Thursday urging them to provide a short-term loan to the General Fund.
"We all very clearly understand the fiscal situation facing the Commonwealth today,” said Rep. Saylor. “But, your joint decision to not make payments to state agencies, schools, health care providers, human service delivery agencies and our most vulnerable citizens would be extremely harmful to the well-being of Pennsylvania.
"By not making funds available to the General Fund, what image would you, our top financial officers, be projecting?" added Rep. Saylor.
In a statement, Treasurer Joe Torsella said, "To be clear, Treasury has no role in writing the state’s budget; those choices and that duty belong to the Governor and legislative leaders. We recognize the Senate action on July 27 and the House action on a different revenue proposal on September 13. But a constitutionally enacted revenue package is one that is agreed to by all the parties..
"Treasury’s position continues to be that we do not consider it appropriate to make a loan to the General Fund at the present time. As Treasurer, I am legally required to make only prudent investments with the taxpayer funds entrusted to my care.
“Treasury’s Short Term Investment Pool is neither a general savings account nor a Rainy Day Fund for the Commonwealth, and lending from its assets to make an emergency loan to the General Fund under the current circumstances fails to satisfy this requirement.
“While lending to smooth cash flows can be prudent when revenues and expenses are aligned, the state’s budget remains $2.2 billion out of balance due to the lack of an enacted revenue package nearly three months into the fiscal year. These conditions would raise significant concerns about repayment for any lender."
Senate Republican spokesperson Jenn Kocher said the Senate is reviewing the budget plan passed by the House Wednesday, adding “We grasp the urgency of the situation which is why we are rushing our review and intend to act as quickly and responsibly as possible.”
The Senate is due to return to voting session September 18. The House is not scheduled to return until September 25, although the House Speaker could convene the House sooner.
The Senate is due to return to voting session September 18. The House is not scheduled to return until September 25, although the House Speaker could convene the House sooner.
(Based in part on reporting by PLS Reporter.)
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