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Tuesday, August 31, 2010

Schools Borrow for Funding

This is a disturbing trend, school districts now have to borrow money to make up for their budget gaps.  Now school districts borrowing money (like small businesses) to make monthly payrolls is nothing new, but borrowing for the year to make up for budget gaps is.  The question arises, with the budgets getting increasingly cut each year (with no real end in sight) how do they pay these loans back?  Another issue brings up is that property taxes cannot be raised to fill the gap (and who can afford that in a declining economy anyhow?).  This will contribute to the already bleeding economy's list of debt woes as school districts get deeper and deeper in debt by refinancing (rolling over) the loans they cannot pay every year.  We have already seen how one financial institution scammed a Denver school district out of millions.  CNN Money's article is specific to Alabama and outlines how the reduction in tourism revenues, due to the BP spill, has crippled them.  What is BP's responsibility in this?  Are we going to hold them accountable for ripple effects of the damage they caused?  [ Read more ... ]

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