Superintendent: Phila. Schools Face Shutdown In January Due To State Budget Impasse

HARRISBURG, Pa. (AP) —  Pennsylvania’s long budget stalemate could soon make it impossible for some school districts to get another loan to stay open.
William Hite, superintendent of the Philadelphia School District, says in light of the budget impasse, it can continue making payroll while operating without state funds through the end of January. After that, whether schools remain open, Hite says, is uncertain.
“Our goal throughout the budget talks has been to keep educating students for as long as possible. At this point, we can continue to make payroll, operating without state funds, through January 29, 2016. After that date, our ability to keep schools open, issue paychecks and pay bills is uncertain,” Hite said in a letter to school district employees issued Tuesday.
“The prospect of running out of operating funds is dire. We are exploring all options for contingency planning with our lenders and considering possibilities across many fronts to provide for students’ uninterrupted education. We will also provide financial planning information to employees in the near future. We will continue to communicate with you in the weeks ahead,” the letter continued.
Hite urges staff to contact state Legislature and Governor Tom Wolf to “advocate for a budget that provides the critical support all Pennsylvania students deserve.”
Standard & Poor’s says it has withdrawn its ratings on a state government program that helps school districts borrow by giving a guarantee to repay bondholders.
In a Friday note, Standard & Poor’s says Pennsylvania can’t ensure the timely payment of debt service because of the stalemate.
The Pennsylvania Treasury Department’s chief counsel, Christopher Craig, says if the other ratings agencies were to follow suit, some of the state’s poorest districts would be effectively cut off from the debt market, or the cost would be so high, they couldn’t afford it.
The state auditor general’s office has tallied about $900 million in borrowing by Pennsylvania school districts to pay bills during the impasse.
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