State Transfers $110 Million from USTIF to General Fund
On August 31, the Pennsylvania Office of the Budget informed USTIF that $110 million will be transferred from the fund to the state’s General Fund.
As part of the 2026–2027 state budget, Act 21 of 2026 directed that $580 million be transferred from restricted accounts and special funds to the General Fund to balance the budget. However, the law did not identify USTIF—or any of the other affected funds—when the budget was enacted.
Instead, Act 21 gave the Secretary of the Budget authority to determine which funds had surplus balances that could be transferred without jeopardizing the objectives of the programs they support. The Secretary was then required to provide the State Treasurer with a list of the selected funds and transfer amounts.
The specific funding sources were not made public until the Budget Office issued Expenditure Symbol Notification 26-039 on August 31. That notice identified USTIF as the source of $110 million—nearly 19% of the total transfer.
In addition to USTIF, the Budget Office directed or identified transfers from the following funds and restricted accounts:
- Workers’ Compensation Security Fund — $207 million
- State Gaming Fund — $109.919 million
- Pennsylvania Infrastructure Bank — $25 million
- Local Share Assessment–Category 4 — $25 million
- Securities Operations — $20 million
- Small Business First Fund — $15 million
- Compulsive and Problem Gambling Treatment Fund — $15 million
- Unconventional Gas Well Fund — $15 million
- Agricultural Conservation Easement Purchase Fund — $11.5 million
- Pesticide Regulatory Account — $11 million
- Asbestos and Lead Certification — $5.715 million
- Machinery and Equipment Loan Fund — $4.6 million
- Marcellus Legacy Fund — $2 million
- Agronomic Regulation — $1.5 million
- Motor Vehicle Transaction Recovery Fund — $750,000
- Dormitory Sprinklers — $515,910
- UCC Review and Advisory Council — $500,000
These transfers, together with the $110 million from USTIF, total the $580 million required under Act 21.
Act 21 does not include an exclusion protecting funds that support environmental programs. Act 45 of 2025 established such an exclusion for reporting and annual transfers of interest earned by special funds, but that protection does not apply to the separate $580 million transfer authorized under Act 21.
USTIF is reviewing the impact of the transfer with its actuary and expects to provide additional information at its upcoming Board meeting on September 10. The PPA has a Governor-appointed seat on the USTIF Board. Based on a projected investment return of 4.5%, USTIF estimates that the $110 million reduction in its fund balance will result in approximately $4.9 million in lost investment income during the current fiscal year.
USTIF currently projects that fee income will cover its expenses for the current fiscal year and for the next five years. PPA will continue monitoring the fund’s financial position, the potential longer-term impact of removing $110 million in fee-supported reserves, and potential courses of action in response to this fund transfer. PPA will provide additional information to members as it becomes available.
