(The Center Square) – State Treasurer Stacy Garrity enjoyed bipartisan praise for several of the initiatives her office has undertaken during the department’s hearing before the House Appropriations Committee.
Her office is in charge of making the state’s 1.7 million monthly payments and making sure the cash is available to fulfill its legislative appropriations. The treasury also manages investments including pension funds and savings plans like educational 529 plans and ABLE savings plans for those living with a disability.
They’ve seen success with returning unclaimed property they’re tasked with keeping secure, from unclaimed wages to objects whose owners remain unidentified or out of reach. The work has taken Garrity, an elected official, throughout the commonwealth to educate people about opportunities to save money and possibly get some back. These efforts have earned her a congenial rapport with many House legislators.
House representatives were eager to keep momentum up to improvements to the state’s 529 plan as well as moving forward the Keystone plan, a proposed retirement plan that would be available to residents who don’t have a 401k through their employers. In both cases, bipartisan efforts in the house stalled at the senate last year, even with Garrity’s support.
Garrity will oversee a proposed budget of just over $1.6 billion for her department, a relatively modest figure within the larger state budget. Rather than probing the spending of the Treasury as a department, lawmakers focused their questions on savings, financial programs, and the fiscal impact of the spending their own body must sign off on.
Top of mind for House Republicans was the impact of the over $56 billion proposed 2025-2026 budget. When asked about the long-term impacts of spending, Garrity said the good news is the strong outlook for the state’s general fund through the end of the current fiscal year.
The treasurer anticipates the state will end the year with an $11.3 billion cash balance, but she cited the Independent Fiscal Office’s projections that project a $3.5 billion deficit this year, increasing to $6 billion the next. If correct, this would mean the total depletion of the state’s general fund in 2026 and rainy day fund in 2027.
Garrity recalled the nearly negligible Rainy Day Fund in the state at the start of her term. The balance over time can impact a state’s credit rating. In October of this year, Moody’s upgraded the commonwealth from Aa2 to Aa3.
The governor’s budget shows a different balance. While still anticipating a deficit next year, his accounting shows an over $3 billion balance this year before having to dip into the rainy day fund for $1.6 trillion in 2026. Garrity said cash flow issues would start to arise in 2028.
“That sounds to me like what I would characterize as a fiscal cliff,” said Rep. Thomas Kutz, R-Mechanicsburg, noting that the Independent Fiscal Office views it as “kind of a dire situation.”
“I don’t envy the decision of the General Assembly,” said Garrity. “So of course that’s up to you how much you spend. This is going to be a tough year, and you’re going to have tough conversations.”
