Pennsylvania has received a “negative outlook” warning from Moody’s Investors Service on the eve of a general obligation bond sale aimed at raising $950 million, according to the Philadelphia Inquirer
But despite the credit warning, state treasurer Rob McCord says the state’s financial outlook isn’t as bleak as it sounds.
In its analysis of the Pennsylvania finances, Moody’s cited revenue shortfalls running through June that threaten to deplete many financial gains made last year by the state, the Inquirer said. It also noted the state is facing several multi-billion long-term shortfalls in at least two public retirement systems that could challenge its financial stability over the long haul.
The analysis concluded that the state’s aging population and low growth would likely force lawmakers to choose at some point between higher taxes and cuts in services.
Moody’s still gave the state a credit risk rating of Aa1, its second-highest grade. But whenever credit ratings go down, the expense of borrowing money usually goes up, which could prove troublesome over time.
McCord, though, pointed to stronger state tax collections in February and March, as evidence that things are improving.
© 2013 Newsmax. All rights reserved.