SRC finalizes SEPTA loan for free student TransPasses
By thenotebook on Feb 23, 2012 07:24 PM
by Oscar Wang
The School Reform Commission Thursday finalized a $37 million loan from SEPTA to underwrite this year's free student TransPasses, a move that has helped it close its budget gap.
The program assists more than 55,000 public, charter, private, and parochial students who ride public transportation for free to and from school daily.
The agreement, however, does not save the program going into the future.
The District originally planned to cut TransPass subsidy for this year due to its massive budget crisis, but reversed course due to public outcry and announced an agreement in principle with SEPTA.
In calculating the amount of cuts it still had to make, the SRC had always counted the $37 million deal, but it took this long to make it happen.
A unanimous 4-0 vote (Commissioner Joseph Dworetzky was absent) sealed the deal at a 15-minute special SRC meeting.
According to Chief Recovery Officer Thomas Knudsen, the loan is for five years at 2 percent interest. He said the District will pay SEPTA approximately $7.4 million next year, which will impact the fiscal 2013 shortfall, In addition, the District will have to find the money to continue the program next year at a time when it starts the year facing at least a $269 million structural deficit.
The current budget gap still stands at $38.8 million, with more cuts to come.