Letter calls on Treasurer Garrity to withhold any transfer from the budget stabilization reserve fund, pending legal adjudication.
Harrisburg, Pa., September 8, 2025 — Today, the Commonwealth Foundation sent a letter to leaders of the General Assembly and Pennsylvania State Treasurer Stacy Garrity, urging the legal protection of the commonwealth’s Rainy Day Fund.
Gov. Josh Shapiro proposed, and House Democrats supported, unlawfully transferring $1.6 billion from the Budget Stabilization Reserve Fund, more commonly known as the Rainy Day Fund, to cover the potential $7 billion deficit created by the governor’s unbalanced, irresponsible spending plan.
The Rainy Day Fund was established to weather the state through financial instability due to emergencies like sudden economic downturn or unforeseen crises that halt the state’s normal revenue streams. Statutory language makes clear that use of the Rainy Day Fund is limited to emergency conditions that “cannot be dealt with through the normal budget process.”
The Commonwealth Foundation’s letter intends to bring attention to the illegitimate nature of the governor’s request and calls for the highest level of scrutiny against any spending plan that leverages the fund to cover its deficits.
Pennsylvanians agree. New polling reveals nearly two-thirds (65 percent) of Pennsylvanians oppose Governor Shapiro’s plan to use the Rainy Day Fund to cover his proposed spending increases.
Commonwealth Foundation President & CEO Andrew Lewis issued the following statement in response:
“The governor’s insistence on using the Rainy Day Fund to cover his excessive spending is both irresponsible and unlawful.
“The financial mess facing our state is no accident—it’s the product of Governor Shapiro’s refusal to rein in spending. Year after year, Shapiro pushes the state further into financial crisis by spending well beyond the state’s revenues, deepening the deficit by billions to bankroll his political ambitions.
“Pennsylvanians balance their household budgets every day, and they expect the same from our governor.
“It’s disgraceful for Shapiro and his party to threaten the financial security of our commonwealth and undermine the state’s ability to weather an actual crisis, all to pay for an extreme budget of his own making.
“As Pennsylvania faces an out-migration problem, the governor and his party are threatening the future financial security of the state. People want—and deserve—stability in the state that they call home. Pennsylvania losing its emergency reserves, as Shapiro is threatening, jeopardizes our fiscal rankings. Also, it threatens tax hikes on working families, making it more difficult to stay and raise a family.
“Any budget proposal that leverages the use of the Rainy Day Fund must be met with the highest level of scrutiny.
“We urge the General Assembly and Treasurer to protect the Rainy Day Fund for the future security of Pennsylvania and its next generations. Our state’s future is at stake.”
Commonwealth Foundation COO & General Counsel Megan Martin continued:
“The Rainy Day Fund ensures Pennsylvania’s operations can continue either during an emergency or a recession with a drastic drop in revenue.
“Neither of those legally required circumstances for using the fund currently exists today. Instead, the state’s financial crisis is a direct result of Governor Shapiro’s reckless spending habits and inability or unwillingness to balance a budget, which has resulted in consistently worsening the commonwealth’s deficit by billions of dollars year after year to pay for his radical agenda.
“Permitting the governor to deplete this fund without any legal basis sets a dangerous precedent and exposes every Pennsylvanian to serious financial consequences. It opens the door to sweeping tax hikes, destabilizes our fiscal safeguards, and undermines the rule of law. This isn’t just a budgetary misstep, but it is a direct threat to the economic security of families, businesses, and communities all across our great Commonwealth.
“Lawmakers must closely examine the governor’s attempt to siphon money from the fund and take immediate action to block it. His efforts lack any legal justification and, if left unchecked, would erode public trust and violate the safeguards designed to protect Pennsylvania’s hard-earned taxpayer dollars.”
For media inquiries, please contact Giana DePaul at gmd@commonwealthfoundation.org or (215) 859-0384.
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