With the Pennsylvania General Assembly considering legislation to rework the redevelopment assistance capital program, state Treasurer Rob McCord offered additional changes that he said would enhance the capital budget process.
According to McCord, the answer is not simply to focus on the state’s debt ceiling.
“Debt limits have proven ineffective. The current system already attempts to limit debt, but it consistently fails,” he said.
“We need a system that instills fiscal discipline with limits on commitments to projects as well as measures of return on investment.”
Fitch Ratings assigns AA-plus to Pennsylvania’s general obligation bonds, while Moody’s Investors Service and Standard & Poor’s assign Aa1 and AA ratings, respectively.
McCord noted that leading credit rating agencies have all affirmed the state, and that the commonwealth’s debt service to revenues ratio is below the 5% level Standard & Poor’s uses to signify a low burden.