Tags: Pennsylvania | Treasurer | 650 Million | Bond | Sale

Pennsylvania Treasurer Proposes $650 Million Bond Sale

Thursday, 09 Dec 2010 03:49 PM

Pennsylvania Treasurer Rob McCord on Thursday rejected a $1 billion general-obligation bond issue planned by outgoing Democratic Gov. Ed Rendell, proposing instead a $650 million bond accepted by both Rendell and his Republican successor.

"It's more than we need," McCord said at a news conference to announce his decision, which was needed for any bond issue to take place.

But he said issuing zero debt would be "terribly unwise," given the hundreds of public and private construction projects already under way that depend on the funding.

McCord said he had consulted with Republican Governor-elect Tom Corbett, and had concluded that the reduced bond issue was in the new administration's "comfort zone."

The state treasurer said his decision considered the "deep financial distress" of Pennsylvania's budget, which is expected to face a deficit of about $4 billion in the 2011-2012 fiscal year.

His recommendation was also based on the fact that the state is still recovering from recession, and that its government is in transition between administrations, he said.

Rendell, the outgoing Democratic governor who proposed the $1 billion bond, will agree to the lower bond issue.

"It's less than we would have liked but, yes, we will do $650," Rendell's spokesman Gary Tuma wrote in an e-mail.

SAVING OVER $36 MILLION A YEAR

Issuing $1 billion would have cost taxpayers $83 million a year in debt-service payments, McCord said. The smaller bond will reduce annual debt service by $36.3 million, he said.

The original proposal — by far the largest of any bond issue during transitions between Pennsylvania administrations — would have provided funding for public works such as bridge repair and prison construction as well as transportation and environmental projects.

"I believe the proposed issuance of $1 billion in new debt is neither justified nor necessary," McCord said in a letter to Rendell released Thursday.

The original plan was already rejected by Auditor-General Jack Wagner. State law requires at least two of these three officials — the governor, the treasurer and the auditor-general — to approve bond issues.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Economy
Pennsylvania Treasurer Rob McCord on Thursday rejected a $1 billion general-obligation bond issue planned by outgoing Democratic Gov. Ed Rendell, proposing instead a $650 million bond accepted by both Rendell and his Republican successor. It's more than we need, McCord...
Pennsylvania,Treasurer,650 Million,Bond,Sale
335
2010-49-09
Thursday, 09 Dec 2010 03:49 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved