Sunday, January 21, 2007

Debt Service by Any Other Name

I was perusing the University budget to try to answer the questions in my last post about the $170 million that the University recently borrowed. I didn't find answers to those questions, but I did find, rather oddly, that there is no line item for debt service in the budget. You can find one for Penn College which is a self contained subsidiary of the University, but not one for the University itself. However, there is this rather confusing bit.

Insufficient or inadequate space continues to be a serious impediment to Penn State's academic programs. The University lags behind its peers in providing modern laboratory and classroom space for its students, faculty, and staff. Even with the new facilities constructed over the last several years, Penn State still has among the lowest overall space per full-time-equivalent (FTE) student of any public university in the Big 10. While capital funds received from the Commonwealth are greatly appreciated, they will not be sufficient to meet the University's most critical needs. As a result, the University established an ongoing general funds budget to support the capital improvement program. These funds enable the University to incur debt for building renovations and construction, and to provide for the operating costs of the buildings once they are completed. A total of $3,650,000 is included in the budget for 2006-07.
It sounds to me like the $3.65 million in the 2006-2007 budget is for paying back borrowed money. The fact that it is buried at the end of rather defensively written paragraph certainly suggests that the "capitol improvement" line item is debt service renamed.

Can anyone doubt that these guys are full of shit. We need Tim Mahoney's new open records law and fast!

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