Frazier latest Fayette County district to borrow as budge impasse persists
Since releasing his September report, 10 additional school districts, including one in Fayette County, have had to borrow money in October because of the state budget impasse, bringing the total to 27 districts and $431 million borrowed, Pennsylvania’s auditor general said Wednesday.
“At a minimum, this is a significant distraction to schools and at its worst it’s a downright emergency,” Auditor General Eugene DePasquale said during a press conference in Harrisburg unveiling the latest survey results.
Those 10 districts, including Frazier School District, borrowed a total of $85 million and could incur another $14 million in interest and fees on those loans, DePasquale said.
Frazier borrowed $1.5 million, which was the least among the 10 districts. At $50 million, the Allentown School District borrowed the most.
No Beaver County or Greene County districts were on the latest list, although Blackhawk, Midland and Western Beaver in Beaver County, as well as New Castle in Lawrence County, were described as districts that might have to borrow money in November if the budget stalemate continues.
DePasquale said the lack of state funding is “impacting school districts in literally every facet of their operations.” It is also forcing some of them to make tough decisions, including possibly closing schools, not filling teacher vacancies and cutting staff, all of which puts classroom instruction in danger, he said.
“You think any of these kids care about any of this damn symbolism that’s going on?” DePasquale said referring to the political showdown in Harrisburg between the Republican-controlled Legislature and Gov. Tom Wolf.
“Everybody should be waking up everyday thinking, ‘What can I do to fix this?’ not waking up and figuring out, ‘Who can I blame for this?'” DePasquale said.
DePasquale warned that downgrades in the state’s credit rating will ultimately hurt taxpayers through the state having to payback loans with higher interest rates. If the budget impasse goes deep into November another 54 school districts, including Philadelphia, could be forced to borrow money, he said.
“We go to borderline disastrous if something isn’t done by Thanksgiving,” DePasquale said.
In September, the auditor general reported that 17 districts and two intermediate units had borrowed $346 million, though that was skewed by Philadelphia’s $275 million loan. Of those 17 districts, Albert Gallatin Area School District took out a $3.9 million tax-anticipating note (TAN) in August, which the district controller said was put towards bond payments, and Connellsville Area School District had taken out $9 million in TANs.
At that time, Aliquippa was considering taking out a $2 million TAN and Western Beaver was pursuing a $2.4 million TAN, but neither Beaver County district was included in DePasquale’s October report.