Auditor general says some Pa. school districts running out of money


Claims that York City schools will soon have to borrow money to remain open as the state budget impasse enters its third month are not true, a district official said.

Pennsylvania Auditor General Eugene DePasquale said during a Tuesday morning news conference that some districts in the state, including York City, will soon have to turn to creditors to keep doors open. The city district would have to borrow money in October, according to his office.

However, Erin James, city schools spokeswoman, rejected the assertion, saying the district will not run out of cash anytime soon. The list, she said, was likely prepared using outdated information.

"We are in solid financial footing for October and beyond," she said, adding it's not clear when the impasse will start taking its toll on the district. "We are confident we'll get through October just fine."

During the news conference, DePasquale said his office found that 17 school districts and two intermediate units have borrowed a total of about $346 million to make up for the stoppage in state payments. Interest and fees on the loans could reach $11.2 million.

No relief: Some potential relief for districts, nonprofit agencies and others feeling the financial pinch from the state budget impasse was quashed Tuesday when Democratic Gov. Tom Wolf vetoed, as promised, a Republican-crafted short-term spending measure.

Wolf vetoed the three-bill package, saying it would sell out the people of Pennsylvania to oil and gas companies and special interests, increase the state government's deficit and harm its credit rating.

Republicans said their $11 billion, four-month spending package would have ended unnecessary hardships while budget talks continue. Democrats opposed it.

Wolf wants a multi-billion-dollar tax increase to wipe out Republican funding cuts for schools and human services and to eliminate a long-term budget deficit. He also wants measures to cut residential school property taxes and impose a severance tax on the natural gas industry.

The governor vetoed on June 30 a GOP-drafted $30.2 billion budget package. No Democratic lawmakers voted for the budget bill or short-term spending measure.

School districts: The Auditor General's Office surveyed officials at nearly 300 of Pennsylvania's 500 school districts to reach the financial figures. DePasquale noted many districts are losing investment income because they are spending down their reserves. The biggest borrower is the Philadelphia School District at $275 million.

DePasquale says public school borrowing will surpass $500 million by Nov. 1 and $1 billion by Dec. 1 if the stalemate continues that long.

Another York County district said to be on the verge of financial dire straits, according to the Auditor General's Office, is financially sound until next year if a budget isn't signed into law.

DePasquale's list says South Eastern School District has only enough cash available to operate until November.

But the district can go until March without having to borrow money, said Mary Childress, district business manager.

"The local taxpayers contribute the majority of funds toward our budget," she said.

The list: Childress said she was contacted by a state official a few weeks ago asking about the effects of the impasse on the district's financial situation. At the time she told the official the district would likely examine that in November.

The York City district was also contacted by the state in August. At the time, the business manager said the district might need to borrow money in October, James said.

But the financial situation has changed since then, and the district won't have to borrow money in the coming month, she said.

The list was compiled through an informal phone survey, said Susan Woods, spokeswoman for the Auditor General's Office and was meant to paint a broad picture of the effect of the impasse on districts.

The Associated Press contributed to this report.

— Reach Greg Gross at