Standard & Poor's Ratings Services says it is ready to "lower (Pennsylvania's credit) rating in the next few months" unless state officials replace Gov. Tom Corbett's and legislative leaders' proposed "one-time" budget gimmicks, such as the plan to defer payments to the state's underfunded pension systems, and instead make "a concerted effort to bring revenues and expenditures into alignment," rebuild cash reserves, and pass "meaningful pension reform," S&P analyst John Sugden warns today in a report to investors. The agency wants state leaders to make tough choices even as they face re-election this fall.

That's a more insistent threat than the "two years" S&P gave the state to fix its finances, or risk a downgrade, in a report last April and a previous report in 2012. The agency currently rates Pennsylvania AA ("Very Strong"). S&P is weighing lower ratings for $545 million the state plans to borrow in General Obligation bonds, and $293 million in bond refundings. A lower rating could force the Commonwealth to pay more to borrow money.

Sugden says Pennsylvania faces "below-average job and population growth over the next five years," and a policy of borrowing money "to fund aging infrastructure and provide economic stimulus" faster than the state is paying off its existing debts. By spending faster than they are raising taxes, state leaders have created "growing expenditure pressures, primarily due to inaction on pension reform, coupled with slow economic growth and limited-to-no-reserves" that have "diminshed the state's financial flexibility," he added. 

The state hopes to save $16 million that Corbett hasn't yet factored into the state budget by refinancing old debt at lower rates in fiscal 2015.