State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

The State House Sound Bites Podcast is now called State of the State and is a part of PA Post, a digital-first, citizen-focused news organization to hold Pennsylvania’s government accountable to its citizens.

PA can make September payments; but after that, it's unclear

Written by Katie Meyer, Capitol Bureau Chief | Sep 25, 2017 5:11 AM

Revenues may hit another weak spot in early October. (Photo by AP)


(Harrisburg) -- As state lawmakers fight over the details of a long-overdue budget funding plan, the commonwealth is having trouble covering short-term costs.

After temporarily delaying several payments, the Wolf administration says it can meet expenses for the rest of this month.

But after that, things may get tricky.

Through October 2, the state owes more than $700 million for various major obligations--including school costs, state employee salaries, and county assistance--plus at least tens of millions more for smaller ones.

Revenue Department reports show that a billion dollars in Medicaid insurer payments and a half billion in pension fund payments that the state deferred this month have already been paid off.

But the administration isn't making detailed data available on expenses after October 2nd.

Spokesman JJ Abbott said around then, the general fund will hit another low point.

He confirmed that cash flow issues are possible--though noted that nothing is certain, and the situation is constantly changing.

"It is essential," he said, "that the General Assembly get [the budget] done expeditiously. Governor Wolf will work to cause the least amount of disruption so the commonwealth can meet its obligations and commitments."

Important school payments are due on the last Thursday of October.

Revenue shortfalls early in the fiscal year aren't unusual. But state Treasurer Joe Torsella is currently refraining from extending a customary loan to cover the gap, saying it's irresponsible to lend the commonwealth money while the budget remains unfinished. 

Published in News, State House Sound Bites

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