Recently, Pennsylvania Treasurer Stacy Garrity announced that the Pennsylvania Treasury Department will be offering short-term loans to counties and Head Start Programs due to the state budget impasse. The planned loans will come with a 4.5% interest rate, which would be due within 15 days of the state budget coming into effect.
 
While the desire to assist public entities during a budget impasse is laudable, the decision by the Treasurer to charge a 4.5% interest rate on these loans is, to say the least, problematic.
 
While the Republican-controlled Senate is playing political games and refusing to come back to work and find agreement with the state House and send a budget to the Governor’s desk, our schools and other state entities are suffering the consequences of their inaction.
 
There is no justification for collecting a 4.5% interest rate on money that is rightfully owed to these organizations, which bear the responsibility of educating our youth and providing essential health and social services to the families of our great Commonwealth.
 
I will be introducing legislation to add clarity in our law that would limit the authority of the State Treasurer to grant loans during a budget impasse and to ensure any loans offered by the Treasury Department are not subject to the outrageous demand of paying a 4.5% interest rate on what is essentially an organization’s own money.
 
I hope you will join me in supporting this legislation and send a message that this type of behavior is unacceptable.