Wolf says bad budgeting is costing Pennsylvania state government $170M a year in bond interest

Markets Associated Press

Gov. Tom Wolf said Tuesday that bad state budgeting is costing taxpayers about $170 million a year, the Democrat's latest attack on Republicans who control the Legislature as he and top GOP lawmakers prepare to resume meetings on a 3-week-old budget stalemate.

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Wolf told KDKA-AM radio in Pittsburgh during a regularly scheduled appearance that state government is paying a premium of about 1 percent interest on $17 billion in debt. He linked the extra borrowing cost to five credit downgrades that Pennsylvania has received in the past three years.

"This isn't just Democrat Tom Wolf talking, this is people outside looking at us and right now we're paying a premium of about 1 percent on our debt, that's $17 billion," Wolf said. "That adds up to about $170 million a year we're all paying. It's not going to education. It's not going to roads and bridges. It's going to the pockets of people who have bought our bonds because we don't have a good budget."

The House of Representatives was returning to session Tuesday, with no major votes scheduled. Afternoon talks between Wolf and top Republican lawmakers were scheduled in the Capitol.

In the meantime, Republicans are complaining about a $750,000 ad campaign by an affiliate of the Washington, D.C.-based Democratic Governors Association that is targeting them in the showdown. The affiliate, America Works USA, has not disclosed the source of the money.

Wolf and Republicans are sparring over competing budget proposals during the stalemate, which has left the state government without full spending authority. That includes payments to schools and nonprofits and county agencies that help administer Pennsylvania's social services safety net.

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Wolf is seeking a multibillion-dollar tax increase to deliver a record funding boost to schools and wipe out a long-term deficit that's damaged Pennsylvania's creditworthiness. Republicans passed a zero-tax increase budget with a smaller boost for education, but Wolf vetoed it, saying it didn't meet his goals and used gimmickry to balance.

Wolf, a first-time officeholder who became governor in January, told KDKA-AM he believes that Republicans are probably doing "some testing of me as a new governor, which I think is designed to see if I'm really serious about standing up for what I believe and what I think the people of Pennsylvania want."