Gridlocked: Pa. school districts may lose ability to borrow

Written by The Associated Press | Dec 14, 2015 12:19 PM

(Harrisburg) -- The commonwealth's long budget stalemate could soon make it impossible for dozens of school districts to get another loan to stay open. 

Standard & Poor's says it has withdrawn its ratings on school districts whose debt is backed by the state government's guarantee to repay bondholders. 

In a recent note, Standard & Poor's says Pennsylvania's state aid payments are no longer a reliable and stable source of money. 

On Standard & Poor's list are some of the state's poorest and biggest school districts, including Philadelphia, Reading, Scranton, Erie and York. 

The state Treasury Department's chief counsel, Christopher Craig, says if the other ratings agencies were to follow suit, the districts would be effectively cut off from the debt market, or the cost would be so high, they couldn't afford it.

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