State’s emergency savings account infused $737M
(The Center Square) – Pennsylvania’s emergency savings account will now cover state government’s bills for nearly two months after the latest infusion of $737 million.
Treasurer Stacy Garrity said Wednesday the $7 billion safety net, called the Rainy Day Fund, will last 53.6 days in an economic crash, nearly eight days beyond the national average of 46.
“When I took office, we had one of the worst reserve funds in the country – the Rainy Day Fund was so small that it would barely cover the commonwealth’s bills for two days,” she said in an email to The Center Square. “Now, thanks to four consecutive years of smart decisions by the General Assembly to bolster our savings, we’re well above the national median.”
Calling the deposits “integral to responsible state budgeting,” Garrity also credited Gov. Josh Shapiro for “prioritizing our state’s future.”
The fund’s growth has also been integral to the treasurer’s reelection campaign against Democratic challenger Erin McClelland, who has criticized her office’s oversight of public employee retirement investments.
In a recent email to The Center Square, Garrity’s campaign disputed those claims as misleading, noting that the Treasury is required by law to steward those funds on behalf of the Public School Employees Retirement System and the State Employees Retirement System.
Both organizations contracted with BNY Mellon, which never exercised its right to invest in the Saudi Arabian stock market.
“Nor is it likely to be,” said Dennis Roddy, Garrity’s campaign consultant.
The transfer came as part of the latest budget deal struck in early July that included record-spending for economically disadvantaged public schools, business tax reforms and an infusion into mass transit systems that continue to hemorrhage money postpandemic.
While Senate Republicans applauded the plan’s regulatory changes and support for higher education initiatives, House Republicans were decidedly less enthusiastic weren’t shy about their disdain, saying that it drains the state’s savings accounts to support recurring new costs and barrels down the path of tax hikes.
Rep. Aaron Bernstine, R-Ellwood City, called it the worst budget he’s ever seen during his last year eight years in office. He, along with more than three-quarters of the lower chamber’s Republicans, voted against the bill.
The party further dinged Shapiro for draining Pennsylvania’s surplus from $8.1 billion to $3.5 billion in less than two years. The spending pace means lawmakers worry they may be forced to raid the Raindy Day Fund in the next two years.
