News

Pennsylvania gets $2B credit line amid budget fight, deficit

Written by The Associated Press | Jan 8, 2016 3:15 AM
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The Pennsylvania Capitol building is shown Wednesday, Oct. 7, 2015, in Harrisburg, Pa. Gov. Tom Wolf's tax proposal is being debated in the state House of Representatives in the first-term Democrat's effort to break Pennsylvania's 3-month-old budget impasse. (AP Photo/Matt Rourke)

(Harrisburg) -- The state treasurer is extending a $2 billion line of credit to prevent the state government from bouncing checks amid a seven-month-old budget fight between Democratic Governor Tom Wolf and the Republican-controlled Legislature.

Treasurer Tim Reese says the Wolf administration drew $1 billion against the line of credit Wednesday.

He says the state government's cash balance was expected to be as much as $922 million in the red by next week and remain below $0 until tax collections pick up in early spring.

Reese blames the state's shortfall on a long-term budget deficit that also required a $1.5 billion treasury loan in 2014.

He notes the loan carries an interest rate of 0.6 percent and payback is required June 30.

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