SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

September 13, 2016 15:49 ET

Administration Draws Additional $1.2 Billion From Treasury Line of Credit

Funds Needed to Prevent State's General Fund From Falling Into the Negative

HARRISBURG, PA--(Marketwired - September 13, 2016) - The Pennsylvania Treasury today announced that the administration drew another $1.2 billion against the $2.5 billion line of credit that Treasury extended to the commonwealth last month. Accessing the additional funds once again prevents the General Fund cash balance from falling into the negative.

Today's draw, combined with the $400 million the state previously borrowed against the credit line to prevent the General Fund from running out of money, brings the total amount borrowed to $1.6 billion. The line of credit has $900 million remaining.

"Continuing to borrow to pay our state's bills clearly illustrates Pennsylvania's poor financial health," Pennsylvania Treasurer Timothy Reese said. "The line of credit merely addresses the symptoms and does nothing to cure the cause -- our state's structural deficit."

The $2.5 billion line of credit has an interest rate of 0.75 percent on the money borrowed against it. The state is required to pay back the loan to Treasury by June 30, 2017.

Click here to read a news release from August 16 that contains details about the line of credit and additional materials on the state's historical borrowing and its impact.

The Pennsylvania Treasury is an independent department of state government led by the state treasurer, who is elected every four years. The department's primary duty is to safeguard and manage the state's public funds. It invests state money to generate income on behalf of the citizens of Pennsylvania, reviews and processes payments for state government agencies, and serves as custodian of more than $100 billion in state funds. Key Treasury programs include Unclaimed Property, PA 529 College Savings Program and the Board of Finance and Revenue. To learn more visit patreasury.gov.

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