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Pennsylvania releases $45 mln for struggling Philadelphia schools

By Hilary Russ

Oct 16 (Reuters) - Philadelphia's cash-starved school district will get $45 million from the state of Pennsylvania after Governor Tom Corbett said on Wednesday that he would release the funds, which were being held until teachers made concessions in a new labor contract.

The Philadelphia Federation of Teachers still has not announced a new contract after their previous one expired on August 31.

But Corbett said he was handing down the money, previously approved by state lawmakers, after Philadelphia schools' Superintendent William Hite sent a letter on Tuesday to the state's education department that outlined reforms implemented since the beginning of the school year.

Based on those changes, Corbett said in a statement, he decided that the school system had made enough fiscal, educational and operational progress for the funds to be released.

"The reforms... are critical to the district's ability to better manage costs, ensuring that any new money that goes to the district gets spent on things that will improve the quality of education for students," Corbett said.

Philadelphia's 134,000 public school students began the current school year as the district's long-simmering financial crisis threatened to come to a head.

A last minute promise for a $50 million loan from the city allowed school officials to rehire about 1,000 of the 3,800 teachers and staffers it previously laid off because of budget cuts.

Corbett spokesman Jay Pagni said that contract concessions from teachers was just one of several changes the state wanted to see before releasing the funds.

"It is not about one thing or the other," Pagni told Reuters. "It is a demonstrative commitment by the school district. It was a comprehensive plan."

One big change the school district made, according to Hite's letter: suspending parts of the school code, which allows the district to rehire employees without having to consider seniority as the sole factor - a change the union has opposed.

"The release of this money is welcome news in what has been a very tough school year, but it is not a long-term fix," said PFT president Jerry Jordan in a statement.