HARRISBURG— The state senate has voted to let Treasurer Stacy Garrity give out short term loans with zero interest payments to counties and some non profits as Pennsylvania’s budget impasse continues.
The bill is directly linked to a “Budget Bridge Loan” program Garrity announced two weeks ago. The bill would still needs to pass the state house to take effect.
Senate Democrats have criticized the loan program as illegal—and emphasized in firey debates this morning that the whole program would be unnecessary if lawmakers passed a budget.
“This is trying to do a loan. The treasurer is permitted to make an investment. They’re very, very different things. And for the investment, it has to benefit the whole Commonwealth, so the bar is very high,” said Sen. Vincent Hughes, a Democrat from Philadelphia who is the Minority Appropriations Chair. “Now the treasurer’s talking about doing a loan and picking and choosing winners and losers. You get some money. You don’t get any money. This organization gets some money. This organization doesn’t get any money. That’s not her job.”
Republicans maintain that the process is legitimate.
“She can loan, but what she can’t do is, she can’t do it at a 0% interest rate,” said Sen. Kim Ward, the Senate President Pro Tempore and Republican for Westmoreland County. Ward said that the bill gives the treasurer permission to forgive interest payments.
The budget bridge loans right now are charging 4% interest. The Treasurer’s office said on Tuesday that over 30 organizations had applied for the loan.
The bill passed this morning with a 29-20 vote.
Democrats have put forth a bill proposal to forgive interest on all loans that organizations take out because of the budget impasse.
