Some Schools Borrowing Money To Stay Afloat
Friday, October 8, 2010
California Schools Chief Jack O'Connell says some public school districts are taking out loans to make payroll. He says that's one of the results of the budget delay.
SAN DIEGO California schools chief Jack O'Connell says some public school districts are taking out loans to make payroll. He says that's one of the results of the budget delay.
O'Connell says the situation is disappointing on a number of levels.
He says under the deal, the largest spending cut comes from placing California's education funding guarantee on hold. That move lowers school spending by about $3 billion. Schools would get nearly $2 billion back in reimbursements, but not until next year.
O'Connell says even if those payments come through, it's still not enough to keep some districts in the black.
"The delay of sending the less money to the school districts, is going to force some of our school districts to secure private money in order to meet payroll," O'Connell said. "(The loans) will be expensive, short term bridge loans. Those districts that need to borrow the money, will be those least able to pay it back."
That's not good for the San Diego Unified School District. It's facing $140 million shortfall for next year. School officials hope voters will approve a parcel tax in November to help make ends meet.
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