Florida’s public schools are borrowing to pay their bills at the highest level on record, as enrollment declines and competition from school choice programs put pressure on budgets. This year, school districts in the state have issued $1.4 billion in short-term notes via the municipal market to pay for operating expenses, a 62% increase compared to all of 2025, according to data from LSEG.
The debt, known as tax-anticipation notes or TANs, is often issued by local and state governments to bridge the gap between when bills need to be paid and when tax revenue comes in. “Issuing tax anticipation notes in large or increasing amounts can indicate underlying liquidity or credit stress,” said Michael Rinaldi, a senior director at Fitch Ratings.
Public schools around the country are facing financial strain due to declining enrollment as the birth rate falls. In Florida, the rapid growth of school choice programs has also amplified the problem, as has President Donald Trump’s immigration crackdown, especially in south Florida. For the 2025-2026 school year, Florida’s school choice scholarship funding was approximately $4.41 billion, according to the state’s Department of Education.
Over the past year, S&P Global Ratings’ downgrades and negative actions on school districts outnumbered upgrades by a ratio of about three to one. In May, S&P revised its outlooks for the state’s two largest school systems to negative, citing the financial impact of falling enrollment. The districts, Miami-Dade and Broward, regularly issue TANs and did so earlier this year.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing