California school funding delay could force districts into short-term borrowing

08-25-2010

By Theresa Harrington and Katy Murphy/Contra Costa Times

The state's budget impasse is forcing some schools to seek loans to pay their bills as they start the school year. To help the state meet debt and pension obligations, state officials decided Monday to start delaying school payments of $2.5 billion a month in September instead of October, as originally planned. "It's not good news," said Bill Clark, associate superintendent for business in the Contra Costa County Office of Education. "With the deferral and extended delay of the state budget, there are heightened concerns with districts for cash flow." Business officials from county districts will discuss their financial needs Friday, he said. Some districts will likely seek short-term loans to pay their expenses and the county may establish its own loan pool for those with poor credit ratings, he said. The money would be repaid when districts get their state money. (more…)

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California school funding delay could force districts into short-term borrowing

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