Mary Potter
Tuesday, February 13, 2018 3:36 pm
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"HB 141 Summary: AN ACT relating to the emergency revolving school loan fund account, making an appropriation therefore, and declaring an emergency.
Amend KRS 160.599 to remove eligibility criteria for a loan from the emergency revolving school loan fund account; provide loan eligibility for a school district with a significant revenue shortfall due to circumstances beyond the district's control or other extraordinary financial circumstances; reduce the maximum loan term from 10 to 5 years; increase the maximum loan amount from $250,000 to $500,000; authorize the Kentucky Board of Education to promulgate administrative regulations regarding the loan process; direct the Kentucky Department of Education to monitor loans made from the emergency revolving school loan fund account and provide the Interim Joint Committee on Appropriations and Revenue a financial report by October 1 each year; amend KRS 157.330 to specify that any unexpended SEEK funds shall not lapse and shall be transferred to the emergency revolving school loan fund account; APPROPRIATION; EMERGENCY."
(Clinton KY February 13, 2018) - House Bill 141 which has now gone to the Kentucky Senate has been touted as a panacea for school districts having trouble making ends meet.
Excuse my cynicism, but is loaning money to struggling school systems a good idea?
It occurs to me that the Commonwealth of Kentucky is on the verge of becoming a predatory lender. I sorrow to predict that those who borrow won't be able to repay and the interest rate in loss of local control will be an unbearable local burden.
While it is prudent not to deplete the basic fund, lending it out to poor credit risks doesn't sound - well - sound. Even the problem "is cause by "circumstances beyond the district's control" that doesn't make repayment any more sure. We could argue election of a Republican governor and an all Republican legislature is a circumstance beyond a school district's control. However, in fairness, despite protests to the contrary, the state has been cutting funds to local school districts for years during Democratic administrations.
The bill's sponsors mumble incoherently when asked how the borrowers can pay back the money borrowed.
Lending broke school districts money while Governor Bevin's 2018 budget will cut their transportation funding is an unfunny pratfall joke on those to whom we entrust our children. The combination of funding cuts and easy pay back later money is a banana peel waiting for unwary school board feet.
We have to wonder if this is not part of a plan to run school districts into such a ditch that take over by the state becomes inevitable. Then charter schools will sound like a good idea - no tenure, no salary schedules, no annoying teacher pension issues. Voila! Problem solved.
Paraphrasing Popeye's friend Wimpy - we'll gladly pay you in 2024 for $500,000 today.
What could possibly go wrong?