EASTON, Pa. — Easton will have to rely on loans in order to keep the city afloat as the state remains at a budget impasse.
City Council recently approved two ordinances, one for a tax revenue anticipation note and another for a grant anticipation note, to maintain vital services as Easton waits on state money held up by the budget.
As City Administrator Luis Campos explained, the TRAN and GAN are essentially loans procured by the city in anticipation of tax and grant revenue.
The TRAN, which came up at the Sept. 24 meeting, requests approximately $2 million, and the GAN, introduced on Wednesday, requests approximately $6 million.
“The TRAN, we needed to do that to assist with the city's cash flow due to the state impasse, [since] we are not able to receive pension state aid that we typically would have received by now, so we had to basically exercise a TRAN, which allows us to go get a loan for anticipated revenue,” Campos said.
As for the GAN, the city needs the money to pay for grant programs that the state will later reimburse.
“It’s essential to make sure that we continue to make our payroll, to keep services going for the city: police, fire, public works, amongst other positions,” Campos said.
However, the city will ultimately have to pay even more money in interest on those loans.
“Because they haven't passed a budget, now we have to take further liability, because now we have to pay interest on a loan to cover the fact they haven't passed a budget and they haven't released the funds,” Councilman Frank Pintabone said.
Being that Easton tends to run a lean budget, a loan is a necessity to keep operations afloat, Pintabone said, as “there’s no funding to really dip in to” to bridge the gaps.
“Because they haven't passed a budget, now we have to take further liability, because now we have to pay interest on a loan to cover the fact they haven't passed a budget and they haven't released the funds.”<br/>Easton Councilman Frank Pintabone
Pintabone added smaller municipalities may be even more dependent upon the TRANs and GANs, and they just might have even more difficulty with repayment.
According to the ordinance for the GAN, maximum interest rates on the borrowing sit at 4.75% annually for 2027 through 2030, escalating to 7.25% from 2031 through 2040.
Minimum principal amounts for the first four years range from $361,000 to $415,000; and for 2031 through 2040, from $322,000 to $605,000.
Details on the maturity schedule for the TRAN were not readily available.
Campos said the current predicament has put the city in a “cash crunch,” much like numerous other municipalities, schools and nonprofit agencies across the state.
Lawmakers missed the state budget deadline on June 30, 2025, and the impasse has stretched over 100 days with no agreement reached.
