Governor Rendell is almost certain to receive a large chunk of the $1 billion in new borrowing he wants before he leaves office in mid-January, according to legislative sources. The issuance of the new bonds require the approval of either Auditor General Jack Wagner or Treasurer Rob McCord. Wagner refuses to sign off, saying the state can’t afford additional debt. Sources say McCord will sign-off on a lesser amount after he reviews the funding requested by the Governor “A lot of the programs include capital projects that we absolutely need to keep funding, and some are promises made by the governor he would like to fulfill before he leaves office,” one legislative source said.
Governor Rendell, moreover, said he doesn’t want to leave Governor-Elect Tom Corbett with the prospect of issuing more debt as one of his first acts as governor. Corbett will be sworn-in as governor on January 18, 2011.
In an e-mail, Rendell Press Secretary Gary Tuma outlined the new funding requests:
- $400M public improvement projects (things like new state prisons, flood protection projects, high hazard dam repairs, renovations of state park facilities, renovations to military facilities and veterans homes, renovations to higher education facilities at Pitt, PSU, Temple, Lincoln, and SSHE's 14 universities.
- $200M in bridge repair projects for structurally deficient bridges across the commonwealth.
- $155M for RACP (Redevelopment Assistance Capital Program). Those RACP projects are for previously approved projects that have gone through the application and contracting process already and are for RACP projects currently under construction.
- $114M in funding for transportation assistance projects to the local transportation agencies for upgrades and repairs to mass transit, rail freight projects and aviation projects.
- $76M for Pennvest grants and loans for repairs and renovations of local water and sewer infrastructure.
- $30M for Growing Greener II projects for environmental reclamation and preservation projects
- $25M for Pennworks grants and loans for repairs and renovations to water supply and wastewater treatment projects at the local level.
Rendell defends the borrowing as crucial to keep money flowing to public projects that are under contract or construction, such as the bridges, prisons and college dormitories outlined above. The government has about $300 million on hand from past bond issues that is projected to run out around the end of January. He also argues that if the state issues the bonds before December 31, 2010, it will be able to take advantage of a federal program that will lower interest rates.
“There is some criticism that we should wait to take advantage of lower interest rates,” Tuma said. ‘But our budget office worked it out. If we borrow now our taking advantage of the lower rates will save us money in the long run.”