School officials worried about gloomy economy

This from the National School Board Association:

For school districts, the biggest immediate impact of the Wall Street crisis was the drying up of short-term credit. Over the long-term, districts can expect decreased revenue if tax receipts continue to decline and costs keep rising.

“The lack of liquidity and high interest rates means districts will have significant difficulty borrowing, which is going to affect construction,” says Scott Pattison, executive director of the National Association of State Budget Officers.

Short-term bridge loans, which are used by local and state governments to cover costs until anticipated tax receipts come in, have dried up, says Ronald Snell, director of state services for the National Conference of State Legislatures.

“State and local governments are generally excellent credit risks, but the entire national and international money system is tied up in knots,” Snell says. “Banks are reluctant to lend even if governments have an excellent credit rating.” ...