PHILADELPHIA—The oversight panel for Philadelphia's cash-strapped school district is moving to borrow $300 million to cover a budget gap while it seeks to overhaul operations and right its financial ship.

The Philadelphia School Reform Commission on Monday approved a five-year plan including the bond deal. The borrowing would cover a deficit of more than $200 million for this year's $2.5 billion budget, plus an anticipated shortfall for next year.

The Philadelphia Inquirer ( http://bit.ly/PYVx9X) reports Chief Recovery Officer Thomas Knudsen told attendees the shortfall could balloon to $1.35 billion over the next five years unless the district makes major changes.

The five-year plan includes school closures, reduction of labor costs and seeking new revenue sources.

The borrowing still requires regulatory approval.

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Information from: The Philadelphia Inquirer, http://www.philly.com