Kutztown Area School Board adopts resolution urging timely state budget after warning of lost interest

The Kutztown Area School District Board of School Directors voted Nov. 3 to adopt a resolution urging the Pennsylvania Legislature to pass a state budget promptly, citing direct financial impacts on the district.

The superintendent, speaking during the budget-resolution discussion, said the district is primarily funded by local revenue but still feels effects when the state fails to adopt a budget. “We have been unable to earn that interest,” the superintendent said, adding the district estimates about $15,000 in foregone interest by year end tied to delayed state payments. The board moved and seconded the resolution and approved it unanimously.

An intermediate-unit representative further warned that borrowing through intermediate units under variable rates could impose ongoing monthly interest costs on districts. “It’s almost a 6% variable rate, and that puts them at $25,000 a month on the $5,000,000 that they’re dipping into at this point,” the representative said, and cautioned that if $25,000,000 were used the monthly interest could rise to about $125,000.

Board members framed the resolution as an appeal to state lawmakers to act because delays affect the district’s cash flow, investment income and the intermediate units that serve multiple districts. The resolution was moved, seconded and adopted without recorded opposition.

The adoption is procedural; it asks the Legislature to pass a budget but does not change district tax rates or appropriations. The board will continue routine business while monitoring state action that could alter cash-flow projections for the current fiscal year.