HARRISBURG, Pa. (KYW Newsradio) — Warning of economic uncertainty in the coming months, Pennsylvania lawmakers are renewing their calls to protect the state’s rainy-day fund as budget negotiations heat up. The state’s treasurer is joining the Republican appropriations committee chairman in calling for an increase to the fund.
Treasurer Stacy Garrity says there’s enough money in there to keep things running for about 42 days, slightly under the national median, which is 44.5 days.
But she says now is not the time to start dipping into savings.
“The Rainy Day Fund is designed to be a buffer. It's a safety net to make sure that we can avoid tax hikes, and cuts to important programs during an economic downturn, which we know is on the horizon,” Garrity said.
She says thanks to high interest rates and a large balance in the general fund, investment income is expected to be $437 million, almost 10 times more than initial projections made last year.
She is joined by House minority appropriations chairman Seth Grove in saying that $437 million should go straight into the rainy-day fund — to prepare for what Grove expects will be a fiscal downturn, and adjusting Gov. Josh Shapiro’s budget plan to prevent dipping unnecessarily into savings.
Grove says the current budget proposal has a structural deficit, with projections showing it could deplete Pennsylvania’s $5.1 billion rainy-day fund in five years.
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“Our revenues are not growing fast enough to keep pace with costs. That is the structural deficit. Raiding our savings does not fix this problem. In fact, it places us in an even worse position, should the economy end up just tapping the brakes.”
The budget deadline is June 30. Bills are starting to move in the legislature, setting up more intense negotiations.
Grove says he continues to be optimistic about the governor’s willingness to work with legislative leaders, but he adds he’ll continue to stress the need to prepare for economic uncertainty.
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