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HARRISBURG, Pa. (WENY) – Republican lawmakers and Pennsylvania Treasurer Stacy Garrity discussed the importance a healthy rainy-day fund in the 2023-24 budget, which needs to be finalized in a month.
“Spending our rainy-day fund and budgetary reserve is a major concern for House Republicans. The proposal offered by the Governor and House Democrats will result in the spending down of our reserves and rainy-day fund within five years,” said Rep. Seth Grove (R-York), the Republican Chair of the House Appropriations Committee. “The average citizen knows the importance of saving and the benefits that it can bring. It’s the same thing for a Commonwealth’s financial health,” Grove added.
With four weeks until the budget deadline, Grove and Garrity called for an increase to the state’s rainy-day fund.
“We believe that making a significant contribution to Pennsylvania’s rainy-day fund as part of this year’s budget is the right thing to do,” said Garrity. “There is bipartisan agreement that Pennsylvania will soon face a fiscal cliff. We owe it to the hardworking taxpayers we serve every day to prepare by making prudent and fiscally responsible decisions,” she added.
Garrity says the rainy-day fund is designed to be a buffer and a safety net to avoid tax hikes and cuts to important programs during an economic downturn, which she says is on the horizon.
“Being responsible and doing what’s right isn’t flashy, and it rarely grabs headlines. But we all know that the fiscal cliff is coming, and we must make good decisions now,” said Garrity.
Because of high interest rates and a large general fund balance, Garrity says the Treasury’s investment income estimate for the current fiscal year has increased to $437 million, about $432 million higher than what was anticipated. She says the unanticipated revenue needs to head to the rainy-day fund.
“I urge the General Assembly and the governor to allocate that unanticipated revenue to the rainy-day fund. Depositing all $432 million would lift us to slightly above the national median,” said Garrity. “Adding to the rainy-day fund so that we reach the national median is the right goal for this year’s budget, and it’s the right thing to do for the future of Pennsylvania,” Garrity added.
Grove added that Pennsylvania is experiencing a structural deficit and that the state can’t afford to address it with budgetary reserves.
“Our revenues are not growing fast enough to keep pace with costs. That is a 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,” said Grove.
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