News

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

Written by The Associated Press | Jan 6, 2016 12:43 PM
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(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 said the Wolf administration drew $1 billion against the line of credit today.

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

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