This is an excerpt from the article "The 2013-14 "Doomsday Budget" of the School District of Philadelphia: How Did It Come to This?" on this website.
Finally, a major part of the budget crisis is the huge financing costs of the debt accumulated over the last ten years. The district’s annual debt-service obligation is up 32% from five years ago. Half of that debt, $159.9 million, goes to interest. According to 2011 Census data, districts nationwide paid an average of $155 per non-charter pupil on debt service. Philadelphia spends $1,684 per non-charter student. Last year the District borrowed $300 million to cover the deficit that year. The interest for that loan is $22 million annually for 20 years. Before the 2008 banking crisis, the District entered into $3.5 billion in variable rate bank swaps. The School District is out $186 million because they bought variable rates, which plummeted in the 2008 banking crisis, instead of fixed rates. Debt service is 12% of the FY14 budget for the School District.
SRC adopts nearly $2.9B 'lump sum' budget for 2015 - 16
Philadelphia Public School Notebook - March 26, 2015