PA Treasury has to issue a $500M credit line to government so capital projects can continue

15 November 2023- Treasurer Stacy Garrity today announced that she has authorized a $500 million line of credit from Treasury’s Liquid Asset Pool (formerly known as the Short-Term Investment Pool) to the state’s Capital Facilities Fund to ensure timely payments can be made to support ongoing capital projects.

“Important capital improvement projects, including highway construction, flood control infrastructure and other critical public improvements, are happening right now in communities across our state. This is the most efficient – and the most cost-effective – way to ensure that they continue uninterrupted.”
 Pennsylvania State Treasurer, Stacy Garrity

Following the General Assembly’s passage of House Bill 623 this week, the Commonwealth will begin the process of issuing new general obligation bonds for the Capital Facilities Fund. In the meantime, Treasury’s $500 million line of credit – an amount agreed to with the Governor’s Office of the Budget, which manages the Capital Facilities Fund – will allow critical projects to continue moving forward.

Last month, Treasury projected that the Capital Facilities Fund would become cash-flow insolvent by mid-November without additional funding. Thanks to the General Assembly’s action on HB 623 and Treasury’s authorization of a line of credit, that scenario will be avoided.

The line of credit is to be repaid within five business days following the closing of the new debt issuance or March 1, 2024, whichever is earlier.