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Schools Rack Up Interest Costs As PA Budget Stalemate Drags On

Carbondale Area School District plans to take out $2.3 million in loans to cover its costs during the Pennsylvania budget impasse.

School districts in Pennsylvania are running out of money. The state budget is nearly four months late, which means school funding hasn’t been distributed. Districts are taking out loans to keep their doors open, and school superintendents say the delay is only going to get more costly.

At Carbondale Area High School in northeastern Pennsylvania, fifth period just ended. Superintendent Joe Gorham stands in a patch of sun from a hallway skylight, handing out “hellos”. He moves to the side as students rush by. “The fishies are swimming,” he says.

“You don’t go against the stream, you follow the fishies. It’s much safer that way.”

Despite the jokes, there are creases of worry on Gorham’s forehead, and his voice is strained. Carbondale has big financial problems looming because of Pennsylvania’s late budget. The district always has tight finances – over half its students are considered economically disadvantaged. Now they’re missing over half their budget, because they haven’t received any state aid yet. Gorham says they took out almost a million dollars in loans back in June, and that money is nearly gone.

“We just had to authorize going after probably another $2.3 million,” he says.

The extra loan would just cover salaries and health care costs. Gorham rattles off a list of day-to-day expenses that it wouldn’t touch.

Carbondale senior Sydney Toy says she hasn’t noticed changes at school yet. But she’s losing patience with her elected officials. The Democratic governor and Republican legislative leaders can’t agree on how to fix Pennsylvania’s big deficit. Toy says school funding should come ahead of all that political maneuvering.

“We can’t just sit around and wait and keep putting it off and putting it off and putting it off,” she says. “I feel like this is something that needs to come first before anything else.”

Governor Tom Wolf refused to back down in a recent address. “The math has to actually work,” he said. “We have to be honest about our budgeting.”

Wolf insists that the state needs tax increases to balance its books. He won’t give in to Republicans who say there’s not enough legislative support for his plan. Earlier this fall, Wolf vetoed stopgap funding. Instead, his administration offers to guarantee loans for school districts.

“We don’t see that as a good option,” says Erie School District Superintendent Jay Badams. Erie depends on the state for 70 percent of its funding. The district hasn’t paid any bills since July. Soon it won’t be able to pay teachers, but Badams bristles at interest costs that make loans expensive in the long run. His district arranged a loan that it hasn’t closed on yet. It would get them through mid-January and cost more than $100 thousand in interest.

“That would be the equivalent of two teacher salaries, a thousand textbooks, hundreds of computers,” he explains.

Badams considered closing the schools instead. Joe Gorham at Carbondale also thought about taking three-day weekends to save on heating costs. But both superintendents hesitate. High numbers of students in their districts get free or reduced price meals at school. Closing could also delay graduation.

For Gorham it’s a last resort, and it depends how long the stalemate lasts. “We laughed back in June when they said this budget is not going to be realized until frost is on the pumpkins,” he says.

Now, he worries it may not get done before February.