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In school districts from Pennsylvania to Illinois, Kentucky to West Virginia, state and local budget delays are putting the pinch on classrooms and costing districts tens of millions of dollars in additional borrowing fees — money going straight to Wall Street.

In effect, political failures like budget delays, faulty tax software programs, or just political impasses are forcing some of the poorest school districts to borrow money unnecessarily. It is a massive transfer of wealth out of our local classrooms directly to the richest banks and individuals in the nation.

The Problem Is Nationwide

In June, the Whitman-Hanson School District south of Boston had to issue $6 million in emergency loans to bridge a summer cash flow shortage. In May in Fayette County, Kentucky, that number was $110 million to bridge their shortfall. In Union Local School District in Belmont, Ohio, schools needed $2.6 million in emergency financing earlier this year. And in Cook County, home to Chicago’s public schools, districts across the county had to borrow tens of millions of dollars because the county had trouble collecting and distributing its property taxes.

In Cook County, the Palatine School District, for example, had to borrow $25 million to make up for the cash flow shortfall. That borrowing cost them $450,000 in interest and fees for Wall Street, and another estimated $700,000 in lost investments. That’s money that could have been spent in the classroom.

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“We’ve done everything by the book,” said Mary Gorr, the superintendent for Mount Prospect School District, and we are “being forced to waste this significant amount of money on interest and emergency borrowing.” She told the Chicago Tribune, “[it] feels deeply unfair to our taxpayers and incredibly irresponsible of the county.”

While schools all over the United States face the problem of paying for emergency funding for their classrooms, there is no greater example of this fiscal and political crisis than what is happening in Philadelphia.

Political failures like budget delays, faulty tax software programs, or just political impasses are forcing some of the poorest school districts to borrow money unnecessarily.

Political failures like budget delays, faulty tax software programs, or just political impasses are forcing some of the poorest school districts to borrow money unnecessarily.

The Philadelphia School District is one of the most chronically underfunded districts in the region, in one of the U.S.’s poorest major cities. The underfunding crisis in Pennsylvania is so acute that in 2023 a lawsuit from some of the poorest districts in the state provoked a Republican judge to rule Pennsylvania school funding unconstitutional, a violation of equal protection rights.

While there have been some efforts to address chronic underfunding, Philadelphia schools continue to suffer from a lack of resources. In the last month, the School District of Philadelphia faced another budget crisis that threatened to close 17 schools, losing 340 school-based jobs. After a regressive tax proposed by the city’s mayor, Cherelle Parker, failed to pass the city council, Parker found creative solutions to shore up school funding.

Taking money from the capital budget, the mayor has promised to stop the cuts. But the long-term source of these funds are still unidentified. In effect, the mayor’s budget is........

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