PHILADELPHIA (KYW Newsradio) — The School District of Philadelphia spends millions of dollars each year to borrow money, because city tax revenues don’t arrive in time for the district’s officials to pay the bills.
In align with every year around this time, on Tuesday, the board voted in favor of borrowing $175 million to tide it over until city tax revenues come in around February or March. That borrowing will cost the district $2.6 million in interest payments.
However, district chief financial officer Uri Monson says the district needs cash year-round to make payroll, pension payments and charter school payments.
School board member Maria McColgan, who attended the meeting by phone, asked Monson why the city or state couldn’t send their annual revenues sooner, so the district could avoid the cost of borrowing money.
Monson said that would call for the due date of real estate taxes to be moved by six months.
And, if that happens, “We get paid once in 18 months. Or people have to pay twice in 18 months,” he said. “And I’m not confident that either is, actually, I’m confident that neither is going to happen, let me put it that way,”
McColgan says that’s a shame. “Because again, it’s millions of dollars wasted each year.”
“Right. There are better uses of the millions of dollars we spend in interest,” he said.
Monson applauded some of the district’s progress. He said the district is borrowing $75 million less than last year. He also pointed out that the district was delaying the borrowing until closer to when it actually needs the money in order to minimize interest payments.