Sources say Council to propose new borrowing for schools

After weeks of being pressured to find money to plug the School District of Philadelphia's $216 million budget deficit for the next school year, City Council plans to unveil a new borrowing plan Thursday, at its final scheduled meeting before the summer recess, according to sources in the Council president's office.

The measure could not be approved until the fall, when Council returns, and it is unclear how much it would authorize the city to borrow.

But it is also unclear, less than two weeks before the start of the new fiscal year, how much more money the School District will need.

Council already has approved an extension of the city's extra 1 percent sales tax, which guarantees the district an additional $120 million next year, leaving a $96 million gap.

City leaders also continue to lobby for state approval to enact a $2-a-pack cigarette tax for the benefit of the schools. Council President Darrell L. Clarke was in Harrisburg on Wednesday.

There is some optimism that with state Republican leaders grappling with their own enormous budget deficit, Philadelphia Democrats may be able to trade votes to get the cigarette tax.

School leaders also are seeking new state funding and union concessions. They hope for far more than the $216 million needed to maintain what many consider a bare-bones environment at most schools.

Council members, hoping to put pressure on the state to approve the cigarette tax and possibly find other funding, previously suggested that the $120 million was all they were willing to offer.

But many members have been saying privately that Council likely would have to find yet more for the schools in the fall. The new borrowing plan could be one avenue.

Also Thursday, Council is slated to pass legislation to allow the city to borrow $27 million the schools need for the current fiscal year. That loan would be paid back with proceeds from the extra sales tax.

The district has asked Council to increase that borrowing to $55 million, the limit allowed by the state, and apply the extra cash to the next fiscal year.

Some Council members support that request, and they could seek to amend the legislation Thursday to get the full $55 million. Council then would need an extra meeting or a special session the following week to approve the amended bill.

Clarke opposes borrowing more than the $27 million, and he normally presides over a tightly managed Council. If his colleagues were to amend the borrowing against his wishes, that would represent a rebellion not seen in his 21/2 years at the helm.