A skeletal, fill-in-the-blanks $32 billion fiscal 2018 budget for Pennsylvania was scheduled to make its way through the Senate on Friday as the midnight deadline beckons.

The Senate appropriations committee approved a plan by a 23-3 vote around 10 p.m. Thursday. That exceeds the House of Representatives’ $31.5 billion version by 1.5% and is 1.2% lower than Gov. Tom Wolf’s request $32.3 billion request.

"There is a component of the gap that is a one-time component, and I think that’s fair that it should be a one-time solution," said Pennsylvania Gov. Tom Wolf. Pennsylvania Internet News Service

It lacks a tax-and-revenue package, which lawmakers expect to approve after the July 4 holiday. The revenue portion may include tobacco-settlement bonding to cover a deficit. Wolf estimated the borrowing, which he called one-time, at between $1 billion and $1.5 billion.

“There is a component of the gap that is a one-time component, and I think that’s fair that it should be a one-time solution,’ Wolf told reporters in Harrisburg. “But a big chunk of it is recurring revenue.”

Wolf, a Democrat, favors the plan. Members of Wolf’s administration have been meeting with leaders of the Republican-controlled legislature throughout the week.

Pennsylvania has produced several late budgets over the past decade, notably in fiscal 2016, which was nine months tardy.

“Pennsylvania's GO debt is protected in the event of a late budget,” S&P Global Ratiings said in a commentary. “Its constitution provides that if sufficient funds are not appropriated for timely payment of all debt service, the treasurer will use the next revenues that come into pay principal and interest on the debt.”

S&P and Fitch Ratings assign AA-minus ratings to Pennsylvania’s general obligation bonds. Moody’s Investors Service rates them Aa3.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Paul Burton

Paul Burton

Paul Burton is the Northeast Regional Editor for The Bond Buyer and the author of the book "Tales from the Newsrooms." He is a sought-after public speaker and has appeared on radio and TV shows, including former CBS News White House correspondent Sharyl Attkisson’s public-affairs program, “Full Measure.”