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Public education in collapse: School commissions are repeatedly having to borrow millions of dollars to pay bills

Thursday, November 22, 2012 by: Jonathan Benson, staff writer
Tags: public education, collapse, debt

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(NaturalNews) The viability of public education in the United States appears to be on a continuous downward spiral, as school districts all across the country are becoming so strapped for cash that they are now having to take out loans just to buy books and heat classrooms. A recent report by Philly.com explains that the Philadelphia School Reform Commission (PSRC) recently had to take out a massive $300 million loan just to keep the local school system running, while the Poway Unified School District (PUSC) in California reportedly borrowed $105 million earlier this year for the same purpose -- and many more school districts across the country could be next based on the way things are degenerating.

In both of the aforementioned cases, a perfect storm exists where there are simply too many schools and not enough local tax revenues to sustain either them or the bloated bureaucracies that run them, not to mention the ever-flailing national economy that has exacerbated the problem even further. So to keep the two systems afloat, school districts are having to take out massive loans, which of course will strap the next generation and beyond with an unprecedented amount of compounded debt, that is if the school systems even last that long.

"I couldn't be more unhappy that we're in a situation where it's necessary to do a borrowing for the purposes of merely paying our bills," said PSRC Chairman Pedro Ramos to Philly.com about his district's financial woes. "Some people think the solution is that we can just keep borrowing, and we really can't."

All the way across the country in California, the situation is much the same, as expected property tax revenue increases never actually materialized following the financial collapse that initiated back in 2008. This has left PUSC, according to some, with no choice other than to take on a risky, and extremely expensive, capital appreciation bond loan, which will end up costing future taxpayers nearly ten times the loan amount in interest charges.

"This is way worse than loan sharking," said Michael Turnipseed, Executive Director of the Kern County Taxpayers Association in central California, to Voice of San Diego about PUSC's situation. "What they have done is absolutely insane," he added, referencing the $982 million future area homeowners will have to pay in property taxes to service interest for the district's $105 million loan, which was approved in 2011.

Free market education is the only sustainable option for providing quality education

For PSRC, one of the other major driving factors fueling the district's ongoing financial troubles is the fact that many parents have pulled their children out of the public school system and put them into charter schools, which are experiencing a massive resurgence nationwide as a result of the educational failures of public schools. Similarly, California voters have repeatedly shot down measures that would have raised taxes to continue supporting the bloated public education system, and have instead chosen to send their children to independent, charter, and private schools.

Why are they doing this? Because when it really comes down to it, most public school systems today simply do not cut it when it comes to providing a quality education for the money. Taxpayers are simply tired of funneling their hard-earned dollars into a system that requires ever more money every year to sustain, but that offers ever less value when it comes to education.

"Early in our history, education was mainly a private, free-market activity -- no compulsory attendance laws, and no school taxes," wrote Sheldon Richman in a 1995 article on the merits of free-market education. "We need to separate school and state. That's the only sure way to revitalize education, families, and the American spirit."

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