Mayor Nutter said the $275 million loan will be used to pay vendors that have gone without compensation since July.
Philadelphia Mayor Michael Nutter says the city will take a $275 million loan from JP Morgan Chase to pay hundreds of vendors who have gone without pay since July.
The loan will be used to pay $225 million currently owed to vendors. They include several social services agencies and vital providers. The rest of the money will help maintain adequate cash balance, according to kyw1060.com.
The budget crisis forced the city to withhold checks from vendors, Nutter said. He also urged the Pa. House to pass a revised bill allowing the city to make an increase in sales tax and defer pension payments.
Those amendments were originally passed by the House, but were amended in the Senate last week. The new bill is scheduled for a vote on September 8th in the House.
“Next week is possibly the most critical week, financially and operationally, that the City of Philadelphia has experienced in half a century,” Nutter said in a statement Tuesday.
Without state approval of the measures, Philadelphia will have to make $700 million worth of cuts including 3,000 job losses, the closure of some whole departments, and the reduction of many city services plan known as the "doomsday budget."