Pa. CUs to aid state employees in budget impasse

HARRISBURG, Pa. (7/2/09)--Nine credit unions in Pennsylvania have announced plans to offer special low-interest loans and lines of credit to help members who are state employees cope with the potential loss of their paychecks.

Pennsylvania lawmakers were still negotiating a new budget when the state's fiscal year ended Tuesday. If legislators remain locked in a budget stalemate after July 17, paychecks would be withheld from 69,000 state employees, according to the Pennsylvania Credit Union Association (Life is a Highway July 1).

Speaking at a press conference, Gov. Ed Rendell and Secretary of Banking Steve Kaplan praised the leadership shown by Pennsylvania State Employees CU and highlighted the efforts of three additional credit unions: AmeriChoice FCU and Members 1st FCU, both based in Mechanicsburg, and Oil Country FCU, based in Titusville.

Other credit unions developing special programs include Altoona VA Hospital FCU, Altoona; Belco Community CU, Harrisburg; Grove City (Pa.) Area FCU; NE PA Community FCU, Stroudsburg; and Your Choice FCU, Altoona.

State employees are required to remain on the job even if the budget is still in limbo. They are then paid for their work retroactively after a budget is signed.

Pennsylvania has been unable to meet the annual July 1 budget deadline since 2002. This year, lawmakers have split over Rendell's proposal to help close a $3.2 billion deficit by increasing the personal income tax rate.