Pennsylvania’s rainy day fund rectified
By Christen Smith | The Center Square
HARRISBURG, PA – Pennsylvania’s rainy day fund will receive a big deposit after lawmakers settled a dispute with the governor’s administration this week over the definition of “surplus.”
State Treasurer Stacy Garrity said the $898 million contribution into the account, which helps agencies and programs withstand economic downturns, will keep the government operational for 48 days before running out of money – 3.5 days above the national median.
“Continuing to build our state’s rainy day fund is a smart, prudent way to plan for the future,” Garrity said.
The change of heart comes after legislative Republicans and the treasury questioned the administration’s request to transfer just $411.6 million into the savings account– or about 10% of the $4.1 billion revenue surplus left over on June 30, the end of the prior fiscal year.
Officials said the deposit should have been twice the size, accusing the administration of holding onto the money for a future spending spree.
In a letter to the treasurer, Budget Secretary Uri Monson said the state collected $44.9 billion and spent all but $4.1 billion. Per state law, the administration must transfer 10% of the surplus into the rainy day fund before Sept. 30.
Critics in the legislature say, however, the administration’s calculations don’t include $1.5 billion in refunds and $811 million left over from the prior fiscal year. The state also received $2.1 billion from the federal government for enhanced Medicaid benefits.
In the end, lawmakers agreed to better define “surplus” in legislation headed to the governor’s desk this week.
The term stipulates that a surplus is “a fiscal operating result which occurs in a fund at the end of a fiscal year, whereby expenditures, including tax refunds, are less than the fund’s beginning balance, revenues and receipts and lapses during the same period.”
“Defining ‘surplus’ more clearly benefits Pennsylvania taxpayers by eliminating any questions about the intent of the rainy day fund law,” Garrity said. “It also conforms to historic practice in the commonwealth.”
Rep. Seth Grove, R-York, called the development a “big win” before declaring “the political games are over” on his X account Thursday.
One of the loudest critics of the administration’s original deposit, Grove called Monson the “sheriff of robbingham” in his comments to the media last month.
