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Philly to borrow $275 million to pay vendors

Philadelphia Mayor Michael Nutter says the city will borrow $275 million to pay vendors that have not received money since mid-July because of a budget crisis.
/ Source: The Associated Press

Philadelphia Mayor Michael Nutter says the city will borrow $275 million to pay vendors that have not received money since mid-July because of a budget crisis.

Nutter says the short-term loan from JPMorgan Chase & Co. will allow the city to pay about $200 million of the $225 million owed to vendors. He says the rest of the loan will help the city keep cash on hand.

Nutter says the city needs state lawmakers to pass a bill allowing Philadelphia to temporarily increase the local sales tax and defer some pension contributions. The bill is scheduled for a vote by the state House Sept. 8.

If lawmakers do not act by Sept. 18, Nutter says about 3,000 city employees will be notified of layoffs to begin Oct. 2.