PHILADELPHIA (KYW Newsradio) — It’s not unusual for the School District of Philadelphia to borrow money to maintain cash flow until tax receipts come in. But with state lawmakers still unable to agree on a budget, the Philadelphia School Board on Thursday night had to approve borrowing much more than usual.
“This year, because of the budget impasse and the uncertainty it creates, the district is being forced to borrow $1.5 billion — three times more than what it may typically borrow in a given year,” said board member Whitney Jones.
It’s a move that could cost the district up to $30 million in interest — money that board member Wanda Novales said isn’t going into the classroom.
“That level of borrowing comes with enormous interest costs — money that could be going to classrooms, teachers and student supports,” she said. “Every week of the delay puts more pressure on our budget, and every dollar spent on interest is a dollar not spent on our kids.”
Board members said the money is unlikely to be reimbursed in any final budget. Board member Joyce Wilkerson blasted the Legislature for its inability to adopt a spending plan on time.
“It’s a disgrace that the state has not come forward with a budget that would allow us to proceed as budgeted,” she said.
The borrowing will allow the district to operate through December. District CFO Mike Herbstman told the board that if the impasse continues, a point will come where it’s too difficult to borrow more.