Pennsylvania Governor Tom Wolff suffered a major blow after S&P Global Ratings downgraded the state’s credit rating on Wednesday.
According to S&P, the downgrade was due to Pennsylvania’s chronic structural imbalance, weakening liquidity, and budget stalemate. Governor Tom Wolf has been negotiating with legislators regarding the state budget.
S&P lowered Pennsylvania’s general obligation (GO) rating to A+ and appropriation debt to A. It also downgraded the state’s departmental appropriation rating to A- and its departmental & moral obligation rating to BBB+.
In a statement, Carol Spain, credit analyst at S&P Global Ratings, said, “The downgrade largely reflects the commonwealth’s chronic structural imbalance dating back nearly a decade, a history of late budget adoption, and our opinion that this pattern could continue.”
Ms. Spain said Pennsylvania’s liquidity is weakening—another reason for the downgrade. She noted the delay or non-payment of scheduled expenditures for the first time in the history of the state.