Turzai Says Debt Reform, Reduction Measure to Save Billions in Taxpayer Dollars
10/5/2017
HARRISBURG – Continuing efforts to restore fiscal responsibility and sustainability to state spending and borrowing, Speaker of the House Mike Turzai (R-Allegheny) today applauded House passage of legislation that would enact substantial debt reduction and responsible debt management policies in the Commonwealth.

Turzai said, “This is a major step forward in bringing the Commonwealth’s debt under control and, most importantly, reducing the burden on future generations of Pennsylvanians.”

This legislation is the culmination of years of work on the part of Turzai and House Appropriations Committee Chairman Stan Saylor (R-York), as well as a task force of legislators, including Reps. John Lawrence (R-Chester), Rosemary Brown (R-Monroe/Pike), George Dunbar (R-Westmoreland), Matt Gabler (R-Clearfield/Elk), Steve Mentzer (R-Lancaster), Todd Stephens (R-Montgomery), Tarah Toohil (R-Luzerne) and Jesse Topper (R-Bedford/Franklin/Fulton), who studied the Commonwealth’s General Obligation (GO) debt. Turzai indicated the bill also received the endorsement of Gov. Tom Wolf after the two discussed the state’s current fiscal crisis.

House Bill 785 includes three important reforms. First the bill would decrease the Redevelopment Assistance Capital Program (RACP) debt ceiling by $250 million over the next four years. Additionally, the legislation would implement spending controls for new projects being financed by debt. Up to $350 million in new public improvement projects, and up to $125 million in new RACP projects, could be released in a fiscal year. Finally, House Bill 785 would require the administration to use responsible debt management practices by repaying new capital debt using an equal annual maturities plan.

“The passage of House Bill 785 represents new thinking in Harrisburg,” Saylor said. “The House Republican Caucus has been committed to reinventing government and the passage of this legislation is a step in that direction. Not only will this legislation save the taxpayers of Pennsylvania millions of dollars, but it will also lessen the burden of debt on our children’s generation.”

According to projections from governor’s budget office, failing to enact these reforms would cause GO debt to increase by nearly $2 billion over the next 20 years (from $11.58 billion in 2016 to $13.404 billion in 2036, with an annual debt service increase of $340 million over the same period.

The combination of spending controls and responsible debt management practices will reduce the Commonwealth’s GO debt by an estimated $5.27 billion over this same 20-year period and decrease the Commonwealth’s annual GO debt service by approximately $450 million. Total debt service savings over this period would equal $3.14 billion.

“House Bill 785 successfully bends the Commonwealth’s debt curve in a downward direction, said Turzai. “It decreases our debt burden by billions of dollars even while continuing to authorize $475 million in new projects every year. Hundreds of millions of dollars that would have been spent on interest payments will be available to fund the immediate needs of Pennsylvanians.”

House Bill 785 was approved by a 117 to 81, and now goes back to the Senate for its consideration.

Speaker of the House Mike Turzai
28th Legislative District
Pennsylvania House of Representatives

Media Contact: Stephen Miskin, 717.705.1852
@SAM1963 / smiskin@pahousegop.com
RepTurzai.com / Facebook.com/RepTurzai



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