Philly District’s borrowing due to Pa. budget impasse passes $500M
As Pennsylvania enters its fifth month without a state budget, school districts across the commonwealth have been forced to borrow money in order to keep their doors open.
The Philadelphia School District has needed to borrow the most – authorizing more than $500 million in loans.
On Monday, the Philadelphia School Reform Commission approved a $250 million loan in order to stay afloat through the end of the calendar year.
This is on top of the $275 million it borrowed in August to compensate for the fact that funds haven’t been flowing from the state Capitol – leaving the already cash-strapped district on the hook for an estimated $2.5 million in interest payments.
The system will pay a hefty price for this period of financial turmoil, said District spokesman Fernando Gallard.
"That is the cost that we pay when we are out there, not only trying to attract future employees, but also attract parents and attract students. That’s a more difficult cost to show, but it’s there," he said. "And it takes the focus away from what we should be doing day to day, which is teaching kids and concentrating and making sure that students are learning in a classroom."