Bill to Borrow $1.6B, Taxpayers Stuck With $2.3B Tab
Lawmakers approved more than $1 billion in new borrowing for Pennsylvania on Wednesday.
The bulk of the money will go to public improvement projects, while the rest will be used for mass transit, bridge repairs and redevelopment projects included in the state’s Redevelopment Assistance Capital Program.
The bill was approved by the state senate in June and will next go to the Governor for consideration.
According to a fiscal note attached to the legislation the new borrowing will cost more than $2. billion to repay over 20 years. That breaks down to $115 million in debt service annually, assuming the state can borrow the full amount at an interest rate of 3.25 percent.
At the end of the fiscal year on June 30, Pennsylvania held more than $9.5 billion in general obligation debt. This year, the state budgeted nearly $1.1 billion for debt service payments — about 4 percent of the total state budget.
Pennsylvania also has more than $30 billion in outstanding debt in off-budget agencies and authorities, including $7 billion held by the Pennsylvnia Turnpike.
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