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May 24, 10:05 PM EDT

Chicago schools to borrow about $900 million

CHICAGO (AP) -- The Chicago Board of Education has authorized borrowing about $900 million after the district's finance chief warned it would run out of money if it didn't do so.

The board on Wednesday approved a $397 million short-term loan backed by delayed state grant payments. It also approved about a half-billion dollars in long-term bonds meant to bring more cash into the system and modify the terms of some of the district's existing bond debts.

A spokeswoman for the nation's third-largest district says the half-billion dollars of bond debt would be used in the upcoming budget year starting July 1.

Mayor Rahm Emanuel announced plans for the short-term loans last week. City and schools officials say the state owes CPS $467 million in state block grant payments.

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