Pennsylvania’s long budget stalemate could soon make it impossible for some school districts to get another loan to stay open.
Standard & Poor’s has withdrawn its ratings on a state government program that helps school districts borrow by giving a guarantee to repay bondholders.
In a Friday note, Standard & Poor’s said Pennsylvania can’t ensure the timely payment of debt service because of the stalemate.
The Pennsylvania Treasury Department’s chief counsel, Christopher Craig, said if the other ratings agencies were to follow suit, some of the state’s poorest districts would be effectively cut off from the debt market, or the cost would be so high, they couldn’t afford it.
The state auditor general’s office has tallied about $900 million in borrowing by Pennsylvania school districts to pay bills during the impasse.