City to Borrow $50M to Open Schools on Time

By Dan Stamm and AP
|  Thursday, Aug 15, 2013  |  Updated 11:33 PM EDT
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The School Reform Commission passed controversial rule changes on Thursday, that suspend seniority as the mayor and city council promise money for Philadelphia schools to open on time.  NBC10's George Spencer explains.

NBCPhiladelphia.com- George Spencer

The School Reform Commission passed controversial rule changes on Thursday, that suspend seniority as the mayor and city council promise money for Philadelphia schools to open on time. NBC10's George Spencer explains.

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City Guarantees $50M With Different Plans

NBC10's Daralene Jones reports on the two different plans -- one from Mayor Nutter and the other from City Council -- that will give $50 million to Philadelphia public schools, so they can open on September 9th.

City Will Borrow $50M For Public Schools

NBC10's Tracy Davidson reports that Mayor Michael Nutter says the city will borrow $50 million, so Philadelphia schools can start on time.
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Philadelphia Mayor Michael Nutter says the city will borrow $50 million to ensure that schools can open on time next month.

"Today, as Mayor of this great City, I’m here to say I WILL NOT RISK A CATASTROPHE. We WILL avoid this disaster," Nutter said in a prepared press release.

"We are taking these actions because Philadelphia children and their parents and their hopes for a brighter future are not going to be shattered by indecision, fear or doubt."

Nutter's announcement on Thursday comes a day ahead of a deadline set by school officials.

The struggling district has laid off about 20 percent of its staff to close a $304 million deficit. Nutter sent a letter to Superintendent Dr. William Hite to begin the process of rehiring some employees.

Hite was meeting with school officials today to discuss if rehiring should be based on merit or tenure.

Hite said he needed $50M by Friday to rehire enough employees to open schools safely on Sept. 9.

"...the $50 million will enable us to provide many crucial school functions and restore critical staff positions, including assistant principals, counselors and hallway, recess and lunch monitors," Hite said in a press release.

Nutter didn't say by what means the city would secure the loans but did say that the finance director, treasurer and budget director would work together to get the loans.

The mayor's plan includes repaying the loan from money generated through the one-percent extra sale tax extension. City Council still must sign off on that plan.

"If Council approves a sales tax bill consistent with what’s been approved in Harrisburg, or any other legislation, it will give the City access to $15 million a year to repay the borrowing," Nutter said.

If the Council doesn't sign off on the plan then the loan must be repaid from the general fund.

Nutter warned that dipping into the general fund could cause more problems in areas like city pensions.

"Our school children did not create the City pension problem nor are they responsible for the School District’s funding problems. They should not suffer as we try to resolve it. They should not be pawns in a political chess match of leverage and strategy."

Nutter said that if the cigarette tax passes in Harrisburg then the extension of the 8-percent sales tax can be split between the school district and the city.

However the money gets to the district, Hite is grateful for it. He expressed his appreciation to Nutter for getting the money secured before Friday's deadline.

"We have received a letter that would allow us to immediately start recalling the necessary staff to open our schools on time for the 2013-14 school year," Hite said in a press release.

"This money will also help us to avoid combining grades in single classrooms, offer extracurricular activities at all schools, and ensure adequate maintenance and custodial services. In short, this will get us closer to keeping the elements that make our schools quality educational facilities."

In the meantime, Nutter hopes for the state to move to new ways to fund education including "student-based" formulas that take into account population and needs.

 


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