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Scranton superintendent warns of state budget impasse, orders freeze on discretionary spending
Summary
Superintendent Keating told the operations committee Sept. 24 that the state budget could be delayed for weeks, leaving the district with roughly $32 million in liquid cash and about 12 weeks of payroll runway; he said he is freezing discretionary spending and will inform staff and the community.
Superintendent Keating told the Scranton School District operations committee on Sept. 24 that a state budget impasse could stretch for weeks and that the district must take immediate steps to preserve funds. "We have about $32,000,000 in liquid cash," Keating said, and he added that, "just our salary and benefits... It is approximately $9,500,000 per month." He said those figures leave the district with roughly 12 weeks of payroll runway if subsidy allocations do not arrive.
Keating said he will "freeze all spending" for discretionary items and prepare a staffwide communication to make the situation public. "I have to, at this point, as a superintendent, freeze all spending," he said. Finance staff confirmed the district has already collected about 80% of its local revenue for the calendar year and that local property-tax revenues will not resume until the district's tax calendar begins in April.
Mister Laffey, the district finance staff, told the committee the district faces approximately $7,000,000 of debt service due in December and described a state program under Act 85 that can make debt-service payments on a district's behalf during an impasse; officials said the district had not used the intercept for October but may enroll for December if necessary. "We have approximately $75,000,000 [in annual local revenue]," Laffey said, and noted about 20% remains for the remainder of the calendar year.
Board members discussed contingency options, including short-term lines of credit and tax-revenue anticipation notes. Director Casey said other districts have already secured lines of credit; staff warned that, because the district's fiscal year ends Dec. 31, any short-term revenue note would come due that same date and could be difficult to repay if state subsidy remains unpaid. "That presents a little bit of a problem," Laffey said, describing repayment timing as a risk.
Keating and staff urged transparency with employees and the community and said local representatives are actively advocating in Harrisburg. Keating said he would send a full district email and continue to update the board and staff. The committee did not take a formal fiscal action during the meeting; staff said they will continue exploring options with the solicitor and municipal advisor and will report back to the board.
