Plum School District leaders approve $14M loan to cover day-to-day costs
The state budget impasse prompted Plum School District leaders to approve a $14 million loan Tuesday night to cover day-to-day costs through the end of the school year.
The district, like others across the state, has not received its full complement of state funding for 2015-16 because the Legislature has failed to finalize a budget for the fiscal year.
District officials are owed about $14 million from the state, district Business Manager Eugene Marraccini said.
Taxpayers will pay about $46,000 in interest over the 100 days the loan is used, plus $12,500 in fees, Marraccini said. The interest rate will be 1.44 percent through S&T Bank. If the state has not approved a budget by June 30, Marraccini said, the district will have to borrow more money.
Marraccini said the district has about $450,000 in its general fund and $5.4 million in its investment funds. The district's capital improvement fund contains about $5 million.
“We're not broke, but we're going to be broke,” said board member Sal Collela, who heads the finance committee.
The district is expected to receive $1 million from the state this spring in retirement fund reimbursements, Marraccini said.
The district received $9.1 million in state funding in January when Gov. Tom Wolf signed a line item-vetoed budget, but the bulk of that money financed a nearly $7 million bond payment, and the remainder was scheduled to run out at the end of February or early March.
Marraccini said about $24 million of its budget comes from state funding and carries the district through half of the year.
In January, the board approved a preliminary, $64 million budget for the 2016-17 school year with no tax increase. The budget must be finalized by June 30.
Emily Balser is a Tribune-Review staff writer.
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments â either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.