Thursday, December 9, 2010

Rendell's Bond Sale Cut By 35%

Pennsylvania Treasurer Rob McCord (photo) is reining in Governor Ed Rendell’s plan to borrow one billion dollars for construction projects.
McCord has approved a 650-million dollar bond sale.
Either the treasurer or auditor general needs to sign off on a bond sale. Usually, both officials okay the paperwork, but Auditor General Jack Wagner rejected Rendell’s proposal last week, saying Pennsylvania is “drowning in debt.”
After talking to Rendell staffers, as well as members of the incoming Corbett Administration, McCord says he’s approving 650 million dollars in borrowing for various construction projects across the state.

"We’ve been given firm assurances that this money is for already contracted, ongoing projects. And that this will fund their cash flow needs until June."

Rendell’s spokesman, Gary Tuma says the bonds were a “matter of the state paying its bills” on preexisting projects and predicts the funds will run dry in April....

"The next administration is going to have to borrow money and do its bond issues sooner than it otherwise would have, if we had borrowed the full billion. It’s important for everyone to understand that this is not a matter of approving new projects. This is simply a matter of the state of Pennsylvania paying its bills. "

Auditor General Wagner calls the bond sale a bad deal for Pennsylvania taxpayers.....
"With Pennsylvania facing a $4 billion to $5 billion budget deficit next year, now is not the time to increase the state’s debt. “Americans hold 8 million fewer credit cards than they did a year ago, because they understand that debt is a bad thing,” Wagner said. “It’s time that state government listened to the public.”

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