PA INDEPENDENT: …During the past two weeks, all three major credit rating agencies have issued stern warnings to Pennsylvania policymakers in advance of the coming budget season. Two of them, Fitch and Standard & Poor’s, say they may be forced to reduce Pennsylvania’s credit rating, making it more expensive for the state to borrow money on the bond market, unless pension debts are addressed and spending is brought in line with revenue to address a structural deficit in the state budget.
“Pennsylvania faces fiscal pressures in the form of a structurally unbalanced budget, depleted reserves, and a rapidly growing pension cost burden following years of underfunding and market-driven investment declines,” Fitch warned on April 24. “Continued inability to address these concerns, or worsening of any of these conditions, over the near term could trigger further negative rating action.”
The agencies are most worried about Pennsylvania’s $48 billion unfunded pension liability, which is split between the State Employees Retirement System and the Public School Employees Retirement System… (more)
