News

School borrowing piling up amid budget stalemate

Written by The Associated Press | Sep 29, 2015 12:56 PM
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(Harrisburg) -- Pennsylvania Auditor General Eugene DePasquale says public school borrowing is in the hundreds of millions as officials search for ways to stay open through a three-month-old state government budget stalemate.

DePasquale says his office found that 17 school districts and two intermediate units have borrowed a total of about $346 million to make up for the stoppage in state payments. He says interest and fees on the loans could reach $11.2 million.

DePasquale's office surveyed officials at nearly 300 of Pennsylvania's 500 school districts to reach those figures. DePasquale also notes that many districts are losing investment income because they are spending down their reserves. The biggest borrower is the Philadelphia School District at $275 million. The others each borrowed $10 million or less.

DePasquale says public school borrowing will surpass $500 million by Nov. 1 and $1 billion by Dec. 1, if the stalemate continues that long.

Meanwhile, Pennsylvania is still without a plan to pay for government operations after Democratic Gov. Tom Wolf vetoed a Republican-crafted short-term spending measure.

Wolf vetoed the three-bill package, saying it would sell out the people of Pennsylvania to oil and gas companies and special interests, increase the state government's deficit and harm its credit rating.

Wolf wants a multibillion-dollar tax increase to close a long-term budget deficit and boost aid to schools and human services.

On June 30, the governor vetoed a $30.2 billion budget package passed June 30 by Republicans who control both chambers of the Legislature. No Democratic lawmakers voted for the GOP's budget bill or short-term spending measure.

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