Philadelphia will borrow $50 million to fund the opening of its school system on September 9th. Reuters reported:
The city of Philadelphia will borrow $50 million in the capital market for its cash-strapped public schools so they can rehire about 1,000 furloughed employees and open on time on Sept. 9, Mayor Michael Nutter said on Thursday.
It’s not clear, however, that Philadelphia can assume debt for the school. I discovered this while reading the Philadelphia school district financial statement (page B-93):
[T]he School District is a separate and independent home rule school district of the first class formally established by the Philadelphia Home Rule Charter (the “Charter”) in December of 1965. The Philadelphia Home Rule Charter Act, P.L. 643 (the “Act”) expressly limits the powers of the City by prohibiting the City from, among other things, assuming the debt of the School District or enacting legislation regulating public education and its administration except only to set tax rates for school purposes as authorized by the General Assembly of the Commonwealth.
Philadelphia schools relied on $840 million of city property tax revenues, $440 million of federal grants and $1.3 billion of state aid in 2012. The school district is overseen by the state.