City Council gave preliminary approval Thursday to a bill that would transfer $50 million to the School District of Philadelphia in exchange for a portfolio of shuttered buildings to be put on the market for sale.

The district is counting on $50 million from the city by the end of the year, but Council and Mayor Nutter remain in stark disagreement about how to provide it. Each side also has the ability to thwart the other's plans.

Nutter would rather borrow the money against future collections of the city's extra 1 percent sales tax, but legislation for that hasn't been introduced, for lack of a sponsor.

Several Council members on Thursday bemoaned an apparent lack of progress in reaching a settlement to this stalemate.

"We can't understand why we can't get the administration to come up with some kind of agreement," said Councilwoman Jannie L. Blackwell. "We all feel stuck because the administration doesn't seem to want to work with us."

Finance Director Rob Dubow, who testified against Council's proposal in a committee hearing Thursday, said that the sides had a number of shared goals and that he hoped to work with Council to solve the district's money woes.

But he also said the administration was convinced that the only way out of the crisis - the district is grappling with a $304 million budget shortfall - was to follow the outlines of a state-bailout package.

The state plan calls for Council to extend the city's extra 1 percent sales tax, which was slated to expire next year, and borrow $50 million against that revenue now.

Future sales tax collections would pay back the loan and provide an extra $120 million a year for the schools, with the remainder going toward the city's underfunded pension system.

Council President Darrell L. Clarke would rather split the extra 1 percent evenly between the schools and the pension system and create a cigarette tax for the schools.

State lawmakers this year rebuffed the city's attempt to create a cigarette tax. Dubow noted that national antitax crusader Grover Norquist sent a letter cautioning Harrisburg Republicans against backing the new levy.

"We do think it's a real hard push in Harrisburg," he said. "We saw whatever support there was evaporate quickly."

He also said he doubted the state would be willing to change the distribution of revenue from the sales tax extension.

But Councilman Brian J. O'Neill said the administration made a "fatal flaw" allowing the state to dictate the terms of the bailout, especially since the sales tax was city money being used "to fund a state responsibility."

"The state should know we're not going to do it," he said.

Council and the mayor also have sparred over whether enough shuttered school buildings could be sold to pay back the $50 million under Council's strategy. The administration is skeptical of that aspect of the plan.

"You may be right that there's not $50 million in this," O'Neill said. "I don't have a negotiated agreement here. I have to go with one [plan] or the other. That's an easy vote for me."

Majority Leader Curtis Jones Jr. was the only Council member to sound hopeful Thursday - and his note of optimism was unspecific.

"First and foremost, we're not Washington, D.C.," he said, referring to the federal government shutdown. "We're going to find a way to work this out for the kids."

tgraham@phillynews.com

215-854-2730

@troyjgraham