HARRISBURG — The state will finish 2022-23 with $437 million in investment income, due to increased interest rates and the billions sitting in state coffers, Treasurer Stacy Garrity said Wednesday.
Ms. Garrity said that her office had originally projected that the state would get about $5 million in investment income.
“This is an anomaly,” she said, though she added that she expects that the state could see even more investment income in the coming year before it begins to drop again.
She joined House Republican Appropriations Committee chairman Rep. Seth Grove, R-York, at a press conference to call for the state to put the $437 million in the Rainy Day Fund and to urge lawmakers and the governor to scale back spending plans that could have the state begin raiding the savings already in the Rainy Day Fund.
“It is not very often government can say it raised significant revenues without raising taxes, but this is exactly what the Rainy Day Fund and budget reserves have done this year,” Mr. Grove said. “House Republicans led the charge to make real investments in the Rainy Day Fund, and Treasurer Garrity’s leadership has resulted in a monumental return on investment. We still face a structural deficit, but one that is made significantly less steep because of $437 million in investment income.”
The Rainy Day Fund now holds about $5 billion.
Act 114 of 2020 transferred $100 million to the General Fund. Act 24 of 2021 transferred 100% of the 2020-21 $2.6 billion General Fund surplus. Act 54 of 2022 transferred $2.1 billion of the 2021-22 General Fund surplus.
“We have enough saved to keep the state running for about 42 days,” Ms. Garrity said. “That’s a huge improvement, but we’re still below the national median of 44.5 days. The good news is that we can get there this year.”
Mr. Shapiro’s budget proposes no transfer from the General Fund for 2022-23.
Mr. Grove said that there is a general consensus that the state and nation are heading to some degree of economic slowdown. The state Independent Fiscal Office has warned that consumer spending will cool in the coming months as pandemic assistance programs end, putting less money in people’s pockets, and the student loan repayment pause ends, taking more out of their pockets.
Mr. Grove warned that Mr. Shapiro’s budget proposal not only calls for raiding the Rainy Day Fund in the coming years, it also makes unrealistic projections about how quickly state spending will increase in those years.
And once the state wipes out the Rainy Day Fund, lawmakers will have to find another way to fill the budget gap left behind, a situation Ms. Garrity described as reaching “a fiscal cliff.”
First Published: June 1, 2023, 4:41 p.m.