The Philadelphia school board on Thursday moved to borrow $600 million to pay employees and keep the lights on over the next several months.
Read more North Philly’s Kahleah Copper is heading to the 2026 WNBA All-Star Game as a replacement selection
The temporary borrowing, authorized at a special school board meeting, comes in two tranches — $200 million this month, and $400 million in September.
Borrowing to pay bills is a rite of summer for the district, the only school system in Pennsylvania unable to raise its own funds. The school board has had to issue tax and revenue anticipation notes for 43 of the past 45 years, officials said. Last year, the district authorized borrowing up to $1.5 billion because the state budget had not yet been passed.
“Simply put, it helps ensure our schools have the cash flow needed to open on time, pay employees and vendors, and continue serving students without interruption,” school board president Reginald Streater said at the meeting, which was held virtually.
Rates are not locked in, but chief financial officer Michael Herbstman said if the transactions happened now, the first borrowing, which is set to happen Tuesday through Bank of America, would come at a rate of 3.4%, and the September public borrowing would have a rate of 2.85%.
The move, then, will mean millions in borrowing costs for the school system.
Philadelphia, the nation’s ninth-largest school system, has about 114,000 students in 216 traditional public schools, and about 65,000 more in 83 charter schools. The district has a budget of about $4.6 billion.