What loans mean for taxpayers
Carbon County commissioners aired their frustrations over a state loan program that was recently announced to help counties during the budget impasse.
On Thursday, Commissioner Rocky Ahner vented over Pennsylvania Treasurer Stacy Garrity’s announcement that $500 million is available to Head Start providers and county governments through “short-term, investment loans.”
The county will hold payments to landlords and aging providers to allow for the meals programs to senior citizens to continue without disruption until a state budget is passed,
The program allows counties to take up to 25% of their budget as a loan with a 4.5% annual interest rate. However, counties must pay back the loans and interest accrued within 15 days once the state budget has been passed and funds begin to flow.
“I want everybody, whoever’s listening, add up all the budgets of our surrounding counties — Northampton, Lehigh, Schuylkill, Luzerne, Carbon and Monroe,” Ahner said. “There’s barely enough money in that $500 million to cover their budgets. What are they going to do with the other 61 counties?”
He stressed that this money they “found” to make available is tax money that residents have already paid and now the state wants counties to pay interest on that money that is theirs.
“If we would use 25% of our budget, I think we need anywhere from $500,000 to $600,000 for interest in the next couple of months. We can’t pay that,” Ahner said. “We’re put in a bind.”
He sympathized with nonprofits and businesses that will be forced to take out loans at even higher interest rates to keep their operations going because of the impasse.
“This here, they consider it a bridge loan,” Ahner said. “We don’t want a bridge loan, we want bridge funding. There’s no reason why they couldn’t send us one quarter of our money that we need to get us by. Then once this budget is resolved, now we have to pay it back within 10 to 15 days. Are we going to have our money within 10 to 15 days? How are we going to pay a loan back if we’re not having any kind of income coming in?”
The board said that the state is not being forthcoming with why they continue to delay the passage of a budget.
“At first they had that SEPTA was the problem,” Ahner said. “Well they resolved SEPTA so now what is the problem? When I asked somebody what the problem is, nobody knows.”
Commissioners’ Chairman Mike Sofranko echoed Ahner’s thoughts, saying that at first, all you heard was that SEPTA funding was the holdup and now that has been handled
“Well, I got news for you, that may be what your (the government) fight is over, but how about the human services that are out there that you are not even talking about? ... You’re making it one issue and it’s more than one issue. It’s more than one budget. We’re not just affecting health care of SEPTA ...
“If it was that easy, we wouldn’t be up here having these conversations. It’s when you stop that funding. We’re not asking you to not debate it or not even pass it, we’re just asking to keep the funding levels coming at the current level until you satisfy the budget,” Sofranko said.
When asked if the county will be borrowing from the recent short-term loan program, the commissioners said they would not commit an answer because they are hoping to not have to; however, it all depends on how things play out in the coming weeks.
“Do we want to borrow the money that’s ours? No. But here’s the reality. If the county goes out and tries to get a loan, we’re going to probably pay 6 or 7% and they’re offering it at 4.5%” Sofranko said. “So trying to be as fiscally responsible as we are, and we’re running out of cash, where do I get the cash at the cheapest rate? ... We don’t want and we’re trying our best not to ... but it doesn’t make sense for us to borrow money at 6 or 7% when you can borrow at 4.5%.”
Sofranko questioned where the state found $500 million in its funds for these loans, but couldn’t find the money to balance a state budget.
The board also confirmed that a statement made in September remains true. October will be dicey as county money continues to be used without any state funding coming in, with November being the official time Carbon County’s coffers become bare.