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Pennsylvania takes credit ratings hit amid budget fight

Written by Marc Levy/The Associated Press | Sep 20, 2017 10:33 AM
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Photo by (AP Photo/Matt Rourke)

(Harrisburg) --  Pennsylvania's credit rating is taking a hit, another black eye in the nearly three-month budget stalemate between Democratic Governor Tom Wolf and the Republican-controlled Legislature.

The credit rating agency Standard and Poor's has lowered its rating on the commownealth's debt. That's the second downgrade it has slapped on the state in three years as budget makers have struggled to pull the state out of a stubborn post-recession deficit.

Pennsylvania is now rated even lower among states, sliding to the bottom five rated by Standard and Poor's.

"For months, I have warned that a credit downgrade was looming. I have said repeatedly for three years that we must responsibly fund the budget with recurring revenues," Governor Tom Wolf said in a statement.  "We must reach an immediate resolution to the budget and today's news should be a wake-up call to come together and end this now. If an agreement has not progressed by next week, I will be forced to take further steps to manage this situation."

The downgrade means the commonwealth will pay more to borrow money, potentially tens of millions of dollars a year.

The House and Senate are divided over whether to raise taxes as lawmakers look to borrow $1 billion or more to help bail the state out of a $2.2 billion projected deficit.

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