Rep. Seth Grove (R-Dover) joined fellow House members to approve legislation to address and reduce debt in Pennsylvania, which are part of efforts to reform how state government operates.
“I have long said Harrisburg doesn’t have a revenue problem, it has a spending problem,” Grove said. “One way we can address this problem is to address debt. Two of the bills the House recently passed addresses current and future debt, which will aid residents now and for decades.”
One of the bills approved by the House was House Bill 880
. The legislation seeks to extend and accelerate the reduction of the debt ceiling for the Redevelopment Assistance Capital Program, commonly known as RACP, by $500 million over five years.
In addition, representatives unanimously approved House Bill 24
to decrease the amount of interest the state pays on such debt, thus improving its credit rating. The bill would require the principal for new issuances of state debt be repaid in equal amounts over the generally 20-year term of the bond. Currently, the state uses a repayment scheme with lower principal payments in the first few years, with much higher principal payments as the loan matures.
“There are two major advantages of getting House Bill 24 signed into law,” Grove said. “It allows the principle of debt to be paid down faster, which would mean Pennsylvania’s overall debt obligation is paid off sooner. And the interest paid over the life of the loan would be substantially lower.”
Both bills now go to the Senate for consideration.
Representative Seth Grove
Pennsylvania House of Representatives
Media Contact: Greg Gross