The state Department of Education put the Wilkinsburg and Aliquippa school districts on a financial watch list Friday.
The watch list was created by Act 141, a state law passed last year, as part of an "early warning system" for designating school districts struggling to make ends meet.
The warning system is a precursor to a process in which an appointed receiver takes control of a financially distressed district from the elected school board -- a scenario that is playing out in the Duquesne School District.
Wilkinsburg was placed on the list partly because of a $3 million loan approved by the school board Feb. 26, according to a letter sent to board President Karen Payne from the Department of Education. The letter also cited high millage rates as a reason.
The warning system is supposed to help districts avoid financial recovery, a separate process in which an appointed receiver takes control of a financially distressed district from the elected school board--a scenario that is playing out in the Duquesne School District, according to state department of education spokesman Tim Eller.
Mr. Eller said districts on the watch list will get a variety of consulting resources "aimed at helping the district to return to a solid financial position."
Acting Wilkinsburg superintendent Archie Perrin said at the time, "[The loan] is not designed to make us solvent. It's designed to get us through a period."
School board members and district administrators did not return calls for comment Friday.
State Sen. Jim Ferlo, D-Highland Park, said Wilkinsburg is in "a state of crisis" and suggested merging the district with Pittsburgh Public Schools as one potential solution.
"It's time to do something different and something bold and something that's sustainable," he said.
It is not yet clear if Pittsburgh Public Schools would support a plan to merge the districts.
Pittsburgh Public Schools spokeswoman Ebony Pugh said, "We would need to learn more information about what necessary steps we would have to take and the feasibility of the plan."
The Aliquippa School District was placed on the list because of significant financial difficulties, ranging from a projected $725,000 cash shortfall to outstanding debt, which was 228 percent of expenditures at the end of the 2011-12 fiscal year.
The state also added Reading School District in Berks County and Steelton-Highspire School District in Dauphin County, in the eastern part of the state, to the financial watch list.
Correction/Clarification, Updated: March 16, 2013: In an earlier version State Sen. Jim Ferlo's comments were omitted, which made responding comments by Pittsburgh Public Schools spokeswoman Ebony Pugh confusing. They have been restored. education - neigh_west - neigh_east
Alex Zimmerman: firstname.lastname@example.org, 412-263-3909 or on Twitter @AGZimmerman.