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How do you close a $10 million school deficit?

March 7, 2012

Woonsocket city leaders are considering their options in the face of two consecutive years of school cost overruns. Woonsocket Finance Director Thomas Bruce says a supplemental tax and a bank advance may be required to keep the school department running.

“The deficit is impacting the schools’ ability to pay bills and operation of the school department is at risk of interruption,” Bruce said.

Former Woonsocket Schools Superintendent Robert Gerardi now runs a school district in Massachusetts. He declined to comment on Woonsocket school spending.

According to Bruce, the Woonsocket School Department currently has more than $4 million in unpaid bills, many of them over 90 days old. The schools ran up a $2.7 million deficit last year, and school officials are now projecting a $7.3 million budget gap this year.

Bruce says the schools will be talking to vendors about payment plans. Still, he estimates it will take at least $1 million in additional funding each month just to make it through the school year.

That’s where the supplemental tax and the tax anticipation note come in. The measure will require approval from the Woonsocket city council and the General Assembly, not to mention a bank willing to lend money to a city whose credit rating is already two notches below junk bond status.

“Bankruptcy is a last resort, but it has to be an option,” Bruce said.

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