07:20 PM CST on Thursday, March 23, 2006

By Wendell Edwards / 11 New

A local school district has asked for and received one whopping bank loan.

How about $20 million?

That's how much it claims it needed to meet payroll.

And we've learned the problem may get worse before its gets better.

KHOU-TV

Cy-Fair School District had to borrow money to make payroll.

The Cy-Fair School District is pointing to state lawmakers for the reason behind its payroll problem.

As a fifth grade math teacher Jennifer Soto clearly understands when something doesn't quite add up.

"They pretty much told us, 'Guys guess what? We're having to tap into funding balance again and we had to do it to pay your salaries.' We all went 'huh?', " said Soto.

District administrators said they felt the same way when they first realized they didn't have enough cash flow to make payroll.

As result they had to borrow $20 million last fall just to make sure all district employees got paid.

"Probably most people will be shocked that I'm having to borrow money to operate until I get my tax revenue and state revenue in," said George Hobson, associate supt. of business services

Tax payments are now coming in, but it's the lack of state funding that administrators say continues to put the district in a bind.

Gov. Rick Perry has called a special session for April 17thto address this very issue.

And district administrators say if the legislature doesn't come up with a solution this time, Cy-Fair may have to borrow even more money, as much as $40 million just to make school payroll next year.

"We're having to make some decisions that are not in the best interest of kids. I can't plan. Right now I have no idea what my state funding will be," said Hobson.

Back in the classroom, Soto says for her if the money is not there she fears it's the students who will end up really paying the price.

"It's not right. It's not right and I don't know what we can do except banding together to do something at the legislature. I mean we have to," Soto said.

Texas is facing a June 1st court-ordered deadline to revamp the finance system for public schools.

Perry is pushing a comprehensive tax reform as an alternative to high property taxes.