Schools examine borrowing options in budget crisis

September 15, 2009|By JENNIFER FITCH

WAYNESBORO, Pa. -- The Commonwealth of Pennsylvania owes Franklin County schools tens of millions of dollars for the 2009-10 fiscal year.

The Chambersburg (Pa.) Area School District alone is owed more than $12 million in payments not received because of the state budget crisis, Chambersburg school officials said.

The Waynesboro Area School Board talked Tuesday about how to sustain the district if state leaders fail to negotiate a budget in the next several weeks. A missed June 30 budget deadline suspended aid checks for schools and many agencies.

Bond payments due in November will cause cash-flow issues without state aid by then, said Caroline Dean, business administrator for the Waynesboro Area School District. If a budget isn't passed, financial advisers will talk to the school board in October about a "tax and revenue anticipation note" borrowing option.

"The banks and other lending institutions are being flooded with them," Dean said, explaining that they are loans for school districts, counties and municipalities.

The Waynesboro Area School Board passed a resolution urging state leaders to finalize a budget, something that Superintendent James Robertson said is "possibly eminent," considering recent headlines about a potential deal.

"Since we don't have another meeting until October, this is our only chance to do it," Board President K. Marilyn Smith said.

Board member Leland Lemley asked that a section of the resolution be removed. It made reference to the potential temporary closing of schools without a state budget.

The problem is special-education services provided by the Lincoln Intermediate Unit and Franklin Learning Center, both of which are already struggling financially, Robertson said.

"There was talk at one point they might have to shut down the Learning Center until it's settled," Smith said, saying she is hopeful a budget will be passed before then.

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