Pennsylvania's school districts, counties and human services organizations could begin to receive delayed state payments as soon as Tuesday after the state Treasury completed sending out nearly $3.3 billion to cover a backlog caused by the commonwealth's budget impasse.
Gov. Tom Wolf last week signed a partial, $23.3 billion budget for fiscal 2016 that freed up the funds. Local borrowing in the absence of state reimbursements had reached nearly $1 billion and Philadelphia's school district, the state's largest, said it might have to close in late January.
According to state Treasurer Timothy Reese, staff worked with the governor's Office of the Budget to accelerate the payments. It processed all 16,400 expedited payments and staff worked over the holiday weekend to begin processing an additional 35,000 payment requests.
Moody's Investors Service last week called Wolf's move a positive for school districts.
Moody's rates Pennsylvania's general obligation bonds Aa3 with a negative outlook. Fitch Ratings and Standard & Poor's rate them AA-minus, both with stable outlooks.
Wolf, a first-year Democratic governor, and the Republican controlled-legislature have sparred all year over how to fund a roughly $30 billion spending plan. Wolf used his line-item veto powers last week to send the basic education aid component of the budget back to lawmakers. Republican leaders say the budget lacks a clear revenue strategy.
Companion bills including changes to the state pension system and the state-run liquor store system could be in play as lawmakers reconvene in Harrisburg this week.
One of them thinks hitting his peers in the pocketbook would be an effective wakeup call.
Rep. Daniel McNeill, D-Whitehall, refiled a bill to suspend legislator pay if a budget is late. McNeill had introduced such a bill last June but pulled it he got but two co-sponsors.
"My bill would incentivize all involved by removing any pay or per diem after the deadline until a budget is passed," he said.
