The Philadelphia School Reform Commission moved Wednesday to borrow $300 million - money it needs just to pay teachers, heat buildings, and buy books for the rest of the school year.
Chairman Pedro Ramos made it clear that the SRC's back was to the wall and that the state of its finances constituted "dire circumstances" for the district.
"I couldn't be more unhappy that we're in a situation where it's necessary to do a borrowing for the purposes of merely paying our bills," Ramos said.
The bond sale the SRC unanimously authorized at the Wednesday special meeting comes with a hefty price tag - an additional $22 million in debt service annually for 20 years, beginning in 2014.
It's the second time in a decade the district has had to borrow money to keep schools open - the last deficit financing occurred in 2002 - and officials say the school system's credit card is maxed out.
"Some people think the solution is that we can just keep borrowing, and we really can't," Ramos said.
Because it represents nonrecurring revenue, this bond sale puts the district hundreds of millions in the hole for the 2013-14 school year just three months into the current school term.
The message? The district's current spending is not sustainable; the bond sale is a large and very expensive Band-Aid, but it only buys the district a little time.
"Extremely difficult" choices are approaching quickly, SRC member Wendell Pritchett said, and "we're going to have to make them. We don't have any choice."
Thursday, November 8, 2012
Philadelphia schools borrow $300 million to pay itself.
Considering it has applauded itself for finally graduating students at 60%, a suspect number giving the ease someone can get a diploma in places like Philly and with a dropout rate of over 50%. I am sure the $300 million will continue to churn out functionally illiterate humps.