S&P action marks sixth downgrade or negative credit watch since 2012
Harrisburg, PA – Pennsylvania Treasurer Joe Torsella today issued the following statement on Standard & Poor’s (S&P) Global Rating lowering its general obligation rating on the Commonwealth to ‘A+’ from ‘AA-‘.
“Today’s unfortunate news of yet another credit downgrade by Standard & Poor’s for Pennsylvania is yet another wake-up call that policymakers should complete a responsible budget urgently. This downgrade should come as a surprise to no one. For many months —and as recently as last week— Treasury has been warning that the Commonwealth’s General Fund imbalance and the increasing borrowing needs to meet operating costs would likely lead to another credit downgrade if unaddressed.
This action marks the 6th downgrade or negative credit watch of Pennsylvania by S&P since 2012. Additionally, the Commonwealth has been on a negative credit watch for nearly a year. These actions result in a backdoor tax for Pennsylvanians, as costs increase for the state to borrow money in the future.
This downgrade is a symptom of a chronic illness in our budgetary process. Without addressing the structural mismatch between revenues and expenditures, the Commonwealth will be at risk for additional downgrades to our credit rating in the future.
I am encouraged by recent reports of progress in negotiations, and it is my hope that the General Assembly and the Governor will quickly come to agreement on a responsible revenue package for the 2017-18 fiscal year. With responsible action, we can all begin to work toward putting Pennsylvania back on the path of financial responsibility, and restoring our reputation for fiscal prudence.”
Pennsylvania Treasurer, Joe Torsella