PA Bond Rating Downgraded

Moody’s Investor Services downgraded over $11 billion in "general obligation" bonds. As an individual’s credit rating, a lower score makes borrowing more expensive; that is bad news for taxpayers. According to Moody’s:

"The downgrade of the general obligation rating to Aa3 reflects the commonwealth’s growing structural imbalance, exacerbated by the fiscal 2015 enacted budget that depends on non-recurring resources; a weak GAAP balance position that will further deteriorate based on the budget’s one-time measures; and the expectation that large and growing pension liabilities coupled with modest economic growth will limit Pennsylvania’s ability to regain structural balance in the near term." (Emphasis added)

The Pennsylvania General Assembly bears responsibility for the Commonwealth’s fiscal credibility. By siding with the CEO’s of Pennsylvania’s government unions, some members of the general assembly bear more responsibility than others. In a corporate culture, the shareholders would dispose of board members who were complicit in negatively impacting fiscal health of the corporation. Pennsylvania’s voters should do the
same.

Citizens Alliance of Pennsylvania (CAP) is a non-profit organization founded to
raise the standard of living of all Pennsylvanians by restoring limited government, economic freedom, and personal responsibility. By empowering the Commonwealth’s employers and taxpayers to break state government’s "Iron Triangle" of career politicians, bureaucrats, and Big Government lobbyists, this restoration will occur and Pennsylvania will prosper.[http://r20.rs6.net/tn.jsp?f=001P8JBghuuw32EdZadfn-W6CwMbBsgQBpK0DHUCnRPo8QV_KXEgoq_L_ipOl3ah08mAppcKJLn_QKsTyJE7Pr5C_mBUsujxMib_mkqsvuEQ73IaitPL6epbJKp-l0ppBx3Wk_nhjgBIXnHVKP4o0ErDkeVurBafEiheGqBBxCaZEab45JS95ptu1tZP4veLDUDomAxTiEv8as3EvDkTvlG6trOCih98YXYw1MFhYYEU2FVGhfwbrid_bo9Nu54KHkRF82sOYmS5Ftcmnrgu1xtOi3rXFpFmNepw0dAog5NymdJ1WGnkUVDhw==&c=-GSgMUdkUljN7m2KJHsz6WG1SrFWOW80WvVcvA-kdaY2xcBfPpo-Qg==&ch=vg6QN5v58JXe8HUizwftGCWY3t5wobN3iAU2WNtHYJgOV5tqZKjNVA==]

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over $11 billion in "general obligation" bonds. As an individual’s credit rating,
a lower score makes borrowing more expensive; that is bad news for taxpayers. According
to Moody’s:

"The downgrade of the general obligation rating to Aa3 reflects the commonwealth’s
growing structural imbalance, exacerbated by the fiscal 2015 enacted budget that
depends on non-recurring resources; a weak GAAP balance position that will further
deteriorate based on the budget’s one-time measures; and the expectation that large
and growing pension liabilities coupled with modest economic growth will limit
Pennsylvania’s
ability to regain structural balance in the near term." (Emphasis added)

This downgrade should not come as a surprise to anyone. Because the General Assembly
has not dealt with the pension funding crisis costs for servicing Pennsylvania’s
debt will go up further "straining" the budget in the future. The funding crisis
is the result of decades of mismanagement
[http://r20.rs6.net/tn.jsp?f=001P8JBghuuw32EdZadfn-W6CwMbBsgQBpK0DHUCnRPo8QV_KXEgoq_L_ipOl3ah08m1Cys8Jrfc9J43NDxBf2-SYSvR7jlHRZ0WRKDvatPRV-OWJQQFh9mlAAvb9_clhOoUSwnT8e5gyBDEwX1_abXbNDW5n_s4BGVQPHfKP9tcZ0E_1gLGgWUeTTWL9AbrY5gHSHT-4DRUo1mu3F5jYfUjeddhH57JStheqG7qh6qlfUlo13kA7nPv8j3C28w_46Na4ftWozC2lrqxpdCJjU_CyGa-2fx0K4ApNvG5zXOhYwhO8bfqFm6ocCOFyI2QXMOmQE22t8yXpI=&c=-GSgMUdkUljN7m2KJHsz6WG1SrFWOW80WvVcvA-kdaY2xcBfPpo-Qg==&ch=vg6QN5v58JXe8HUizwftGCWY3t5wobN3iAU2WNtHYJgOV5tqZKjNVA==]
by both political parties and their patrons, the government union bosses.

The Pennsylvania General Assembly bears responsibility for the Commonwealth’s fiscal
credibility. By siding with the CEO’s of Pennsylvania’s government unions, some
members of the general assembly bear more responsibility than others. In a corporate
culture, the shareholders would dispose of board members who were complicit in
negatively
impacting fiscal health of the corporation. Pennsylvania’s voters should do the
same.