Pennsylvania Delays Medicaid, State Pension Payments Because Money Has Run Out

All week, state officials warned that bills due Friday would not be paid in full because of a nearly $2.2 billion hole in the budget

Gov. Tom Wolf is delaying more than $1.7 billion in Medicaid and public pension payments that were due Friday and this upcoming Monday because the state government's main account has hit zero.

The Medicaid payment was due Friday while the pension payment is due Monday.

All week, state officials warned that bills would not be paid in full because of a nearly $2.2 billion hole in the budget that the General Assembly has not filled. NBC10 first reported that the state Treasurer would not bail out lawmakers by issuing another short-term loan.

A House package passed Wednesday, but the Senate still needs to conference with the bill. That chamber is not scheduled to convene until Monday.

"Without a completed budget, the commonwealth’s Treasurer and Auditor General have said they are not currently inclined to authorize the normal short-term lending that would typically allow for seasonal cashflow interruption," Wolf spokesman J.J. Abbott said. "Delayed payments will remain stalled until funding exists to meet commitments."

He said the treasury delayed $1.169 billion in payments to managed care providers for medical assistance services as well as $581 million in the state's share of pension obligations to the Pennsylvania School Employees Retirement System (PSERS).

Treasurer Joe Torsella warned state lawmakers that the general fund would run out of money Sept. 15. He previously issued a short-term loan to allow the government to meet its financial obligations through August. But he said more recently he would not issue another loan through what is called the Short-Term Investment Program (STIP).

Torsella seemed inclined earlier in the week to issue another loan if the General Assembly approved a funding package that balances the 2017-2018 budget. The $32 billion budget was approved in June by the Republican-controlled General Assembly even though lawmakers knew of the revenue shortfall.

The House did narrowly approve a funding package late Wednesday night. It relies on transfers of money from funds dedicated to transportation, environmental protection and numerous other state programs as well as future expected revenue.

But Wolf expressed dissatisfaction with the House package. Abbott had told that it "fails the basic test of solving the fiscal problems."

Here's a detailed look at what immediately happens when the general fund goes to zero.

Contact Us