PA Auditor General Warns Another Budget Impasse Will Be Costly

HARRISBURG (CBS) -- Pennsylvania's auditor general is warning that another state budget impasse like the one that played out over the last year could have even greater consequences.

Auditor General Eugene DePasquale says for one thing, another budget stalemate could make things even tougher for school districts.

"There is, especially at the school district level, significantly less wiggle room, because many of the districts that didn't have to take out loans, what they did was they spent down their reserves," DePasquale says.

DePasquale says in the current fiscal year that runs through the end of June, school districts had to borrow just under a billion dollars, and spent an estimated $40 t0 $50 million dollars on interest.

The auditor general also warns that if the state's structural deficit is not addressed and Pennsylvania's credit is downgraded again, it will cost even more to borrow, resulting in what he calls a "back door tax increase."