Local officials want state to pay interest

HARRISBURG, Pa. (AP) — Some counties, social-services providers and school districts that borrowed money to replace state subsidies held up by the 101-day budget impasse said Monday that they want the state to repay the interest.

They said repayment is a matter of basic fairness, and they plan to bring the issue up this week with Gov. Ed Rendell’s administration.

Tom Gentzel, executive director of the Pennsylvania School Boards Association, said his organization will make the request after districts receive their overdue money.

“The question of interest on the money that was delayed is a really legitimate question,” Gentzel said.

The state Treasury Department on Monday was processing around $3 billion in payments after Rendell signed a key appropriations bill that freed up the money Friday.

Gentzel and others said they did not know exactly how much money counties, school districts and the private businesses and nonprofits that delivered social services borrowed during the July-October stalemate.

Tony Ross, president of the United Way of Pennsylvania, said he believes social-service agencies may have borrowed enough to incur interest of $5 million to $10 million.

“These agencies maintained their commitment to the public without compensation for three months,” Ross said. “They didn’t say, ‘We’re not getting paid, we’re not going to maintain our commitment to the public and the commonwealth.’”

Rendell said Friday that he had not considered the matter, and when asked said it would depend on whether the state can afford it.

“I’m willing to take a look at it, but we’d have to know what the total was,” he said.