Forsyth county Schools Face Interest Accrual on Outstanding State Debt
WINSTON-SALEM, N.C. – Forsyth County Schools’ outstanding debt to the state of North Carolina will begin accruing interest in October, according to a notice received by the school board. The debt, totaling approximately $34.7 million, stems from a longstanding financial arrangement related to capital projects and local funding flexibility.
The arrangement, permitted under state law, allows school districts to defer payments to the state for certain capital expenditures. However, a recent change in state policy mandates that any remaining balance after a specified period will be subject to interest charges.
“We were aware of the potential for interest to accrue,” saeid Superintendent Tricia McManus during a recent school board meeting. “We have been working to address the balance, but the timing of the state’s policy change means interest will begin in October.”
The interest rate has not yet been finalized by the state, but school officials are preparing for the additional financial burden. The debt originated from various projects over several years, including renovations and new construction. Forsyth County schools has historically utilized this deferral option to manage cash flow and prioritize local needs.
The school board is currently exploring options to mitigate the impact of the accruing interest,including potential adjustments to the district’s budget and continued efforts to accelerate debt repayment.Further details regarding the specific interest rate and repayment plan are expected to be released by the state in the coming weeks.