District restructures debt amid concerns about future
by Dale Mezzacappa on Dec 09 2010
A few hours before the marathon afternoon meeting on Wednesday dominated by passionate discussion of minority contracting, the School Reform Commission held a short, businesslike session to approve a resolution restructuring its debt. And while everything was presented as routine, pro-forma, and in the District's best interest, it drew attention to some jaw-dropping information that is hardly secret but is not often discussed.
For instance, the District carries $3 billion in debt, and 10 percent of its operating budget goes to debt service - its annual pricetag has soared to $253 million of $2.4 billion. State law guarantees that the District pay off this debt no matter what; it has no option to delay doing this so it can, say, keep qualified teachers in every classroom.
And both Chief Financial Officer Michael Masch and the commissioners said it is likely that the District's overall revenues will decline precipitously next year, given the expiration of the federal stimulus funds and Harrisburg's takeover by Repubicans promising more austerity and no new taxes.
I will not pretend to have read the resolution, which is more than an inch thick. Masch said, in an understatement, that the restructuring was a "complicated
