In addition to the state operating budget, Pennsylvania lawmakers each year pass a capital budget, outlining how much the state can borrow, and detailing projects which may be funded through this borrowing. This PolicyPoints looks at Pennsylvania state debt.
- Under Governor Rendell, total state general obligation debt outstanding has increased from $6.8 billion to a projected $9.5 billion with his 2009-10 budget proposal, a 40% increase in seven years.
- One of the areas of growth has been the Redevelopment Assistance Capital Program (RACP), which allows the state to borrow funds against future tax collections to award to “economic development,” often to fund sports stadiums, convention centers, or direct grants to corporations.
- Annual payments on general obligation bonds have increased from $349 million in 2002-03 to $942 million in Gov. Rendell’s proposed budget, nearly two-and-a-half times the cost when he took office.
- The capital budget bill for 2009-10, HB 1418, would authorize $1.6 billion in new borrowing in 2009-10. This is $457 million, or 37%, more than last year.
- RACP borrowing would be $325 million, an increase of $125 million—or a whopping 62.5% more than in 2008-09. This would offset expected cuts in the WAMs and other grant programs from the operating budget.
- Gov. Rendell often justifies increased state borrowing by claiming Pennsylvania has a low debt burden relative to other states. Unfortunately, much of Pennsylvania’s borrowing is done by off-budget agencies, like the Turnpike Commission and the Commonwealth Financing Authority.
- While Pennsylvania’s “state debt” outstanding has increased 40% from Dec. 2002 to Dec. 2008, the amount owed by “state agencies and authorities”—which represents two-thirds of debt at the state level—increased 86%!
|Pennsylvania State Government Debt|
|Debtor||Debt Outstanding 2002||Debt Outstanding 2008||Increase||Percent Change|
|State Agencies and Authorities||$16,848,800,000||$31,277,000,000||$14,428,200,000||86%|
|Source: Governor’s Executive Budget|
- Pennsylvania taxpayers owe far more when local government debt is taken into account.
- Pennsylvanians owe $115 billion in state and local government debt.
- That debt amounts to over $9,000 for every resident of Pennsylvania, or over $37,000 for the average family of four.
|Pennsylvania State and Local Government Debt|
|Debtor||Debt Outstanding||As of:||Per Capita||Source|
|Total State||$40,038,212,000||Dec. 2008||$3,220|
|State||$8,761,212,000||Dec. 2008||$705||Governor’s Executive Budget|
|State Agencies and Authorities||$31,277,000,000||Dec. 2008||$2,516||Governor’s Executive Budget|
|School Districts||$23,968,836,143||FY 2006-07||$1,928||PA Dept. of Education|
|County/Municipal Debt (Est)||$51,345,851,868||FY 2005-06||$4,130||US Census Bureau|
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