Montgomery County schools, including the school district that serves Montgomery, are facing an unprecedented level of debt and a major budget crisis.
The district’s financial crisis was exacerbated by the school board’s refusal to pay the full cost of its proposed $1.4 billion bond issue, according to documents obtained by Buzzfeed.
The bond issue had to be approved by the board to be considered on the November ballot.
The Montgomery County School System, which serves over 3 million students in grades K-8, has been on the brink of financial collapse for months.
Its fiscal crisis reached a critical point in January when the county board rejected a request from the school system to cut nearly $600 million in operating expenses.
That’s when the district’s debt ballooned to $1,872 million, according a statement released by the county in January.
The district had to borrow money to stay afloat.
The school district’s fiscal crisis began on January 12 when the board rejected the district plan to cut more than $600,000 in operating costs, according the statement.
That means the school’s financial position is at an all-time high.
The board also refused to pay back the $500 million in bonds the district had already approved for the fiscal year.
The school district had only $2.3 million in cash on hand, according district officials.
The board voted to suspend the bond program, which was a condition for the district to be eligible for additional funds from the state.
But after that, the school had to decide whether to make payments on the bonds.
In a letter to the board, district officials said the board could not afford to pay for the additional bond payments on a per-student basis, or pay back any of the money already spent on the bond programs.
The county’s budget has been in crisis for months, especially after the state slashed its funding for the Montgomery County Public Schools in December.
The Montgomery County school system’s annual budget was cut by $300 million, and the district is facing a $2 billion deficit.
The state has been struggling with the county’s fiscal woes.
The budget deficit was projected to hit $1 billion by March.
That’s roughly one-third of the district budget.
In December, the district was forced to cancel two classes due to the budget crisis, and a fourth class was canceled due to a lack of funding.
In January, the Montgomery School System was forced into a bankruptcy court.
The case was resolved with a $250,000 settlement.
The county agreed to pay $2 million to the county to cover the school districts pension and health care expenses.