Pa. Treasurer Approves Scaled-Back Borrowing Plan

HARRISBURG, Pa. (CBS) -- Citing the state's strained finances, Pennsylvania's state treasurer has agreed to sign off on a bond issue totaling only about two-thirds of what Governor Rendell wanted.

And a Rendell spokesman says the governor will go along with the smaller borrowing plan.

To proceed with the $1 billion in borrowing, Governor Rendell needed either the state auditor general or treasurer to agree. Auditor general Jack Wagner had already announced that he wouldn't go along, effectively leaving the decision to treasurer Rob McCord (above), who  said he wanted to consult with governor-elect Tom Corbett.

Now, McCord says he's decided he can't go along with the full proposal.

"To approve a one-billion-dollar bond issue at this time would, in my judgment, be irresponsible," McCord said on Thursday.  "It's more than we need –- it's twice as much debt as was issued in the gubernatorial transition eight years ago.  And importantly, it would have created annual debt service obligations of $83 million."

At the same time, McCord says, issuing no bonds would be equally unwise, so he says he'll approve a bond issue of $650 million.

Reported by KYW Harrisburg Bureau chief Tony Romeo.