PHILADELPHIA — Pennsylvania’s budget dispute is nearing its third month, with Democratic Gov. Tom Wolf and Republican lawmakers still at odds.
The Senate on Friday passed an $11.2 billion stopgap plan despite Wolf having warned two days earlier that he would veto the measure. The amount includes $1 billion in missed payments to schools and hundreds of millions of dollars to social services agencies.
“Voting to provide this funding is the right thing to do,” said Senate Majority Leader Jake Corman, R-Bellefonte.
Some agencies have been drawing on lines of credit.
Wolf called the measure “yet another gimmick that further highlights the Republicans’ clear comfort with politics as usual in Harrisburg and embracing a failed status quo that is holding Pennsylvania back."
Meanwhile, the House is scheduled to reconvene for its fall session on Monday.
Wolf vetoed a $30 billion budget in late June. Tax changes, school funding, pension overall and liquor store privatization are the dividing points.
Moody's Investors Service rates Pennsylvania's general obligation bonds Aa3. Fitch Ratings and Standard & Poor's rate them AA-minus. All three downgraded the commonwealth last year, citing chronic structural imbalance and an estimated $53 billion unfunded pension liability.
“Fitch's emphasis will be on details of a final fiscal 2016 budget, including the extent to which it makes progress in reducing Pennsylvania's structural budget gap,” Fitch said in a statement. “The impasse itself does not affect Fitch's view of the commonwealth's credit quality.
“Pennsylvania faces fiscal pressures in the form of a structurally unbalanced budget, depleted reserves, and a rapidly growing pension contribution burden following years of contribution underfunding and market-driven investment declines.”
