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Depasquale: state budget crisis to blame for school districts borrowing $431 million

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HARRISBURG, Pa. - With the state’s budget impasse entering its fourth month, Auditor General Eugene DePasquale said on Wednesday that the stalemate has now prompted an extra 10 school districts to borrow $85 million, bringing the total borrowed to date to $431 million. Interest and fees on the money borrowed to date could potentially reach $14 million, according to a release.

"At a minimum, this is a significant distraction for our schools, and at its worst, it's a down right emergency," Depasquale said. "These costs will almost double between now and Thanksgiving if there isn't a budget deal by then."

Depasquale says on top of borrowing, some schools are withholding payments to retirement funds, postponing hiring, and delaying staff paychecks.

In late September, Auditor General DePasquale initially reported that the state budget impasse forced at least 17 school districts and two intermediate units to borrow more than $346 million to meet expenses and keep classrooms open.

To date, Department of the Auditor General staff members spoke with officials at more than 320 school districts across the state. The department will continue to reach out to school districts and release updated borrowing figures every month until the final budget is signed into law.

For a full list of schools expected to take out loans to cover their costs, click here.