Philadelphia School District Takes Out Big Loan To Pay Bills
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By Mike DeNardo
PHILADELPHIA (CBS) - The Philadelphia school district whipped out its credit card Wednesday to pay its bills.
The School Reform Commission okayed the sale of $265-million in bonds just to get the district through its deficit this year.
“People think that the solution is we can just continue to buy time, and we can just borrow more. And we really can’t,” SRC chair Pedro Ramos said.
The move adds $22-million to the district’s debt service for the next 20 years.
Superintendent William Hite says the district’s five-year financial plan seeks to get expenses in line with revenues, partly by restructuring union wages and benefits.
“Those things probably were in high-revenue times,” he said. “But now we don’t have the ability to sustain that structure.”
Hite says he’ll make his own recommendations in January.