How deep will they have to go? School District budget managers will be searching for further cuts this spring and summer, seeking tens of millions of dollars in savings in a $2.3 billion budget that has already been sliced repeatedly over the past two years.
It’s a familiar position: struggling to eliminate a large deficit of uncertain size as the May 31 deadline for budget adoption looms. But this time, the District is in the midst of a leadership change. And just days before the deadline, potential cuts still hadn’t been released to the public as officials grapple with what to do.
The District came under fire from Parents United for Public Education, a budget watchdog group, for not revealing the possibilities. “At this point in time in previous years, the District has usually published a prioritized list so that people are not surprised,” said Parents United spokesperson Helen Gym at a May 7 budget hearing.
Advocates are emphasizing the grim side of the situation – the inadequate resources and continued need to cut back. More optimistic District officials are highlighting the progress that has been made in reducing the $181 million shortfall projected a year ago to the current figure of $38.9 million.
“I’m not minimizing $38.9 million, but in comparison, it’s manageable,” said departing Interim CEO Tom Brady, who heads for a new position in Providence, RI in June. He has spent much of the past year working on lowering the deficit.
Both camps are holding out hope that Gov. Rendell’s proposal to radically alter the state aid funding formula will win approval in Harrisburg and drive badly needed state aid into Philadelphia now and in future years.
But District leaders signaled that the process of finalizing a deficit reduction plan could extend beyond the budget deadline.
“It’s very likely that some of this will continue to be worked on after May,” said School Reform Commission Chair Sandra Dungee Glenn. She explained that new CEO Arlene Ackerman, who starts work June 2, will want to “weigh in on some of the decisions that she’ll be responsible for implementing.”
Ackerman will have little room to initiate programs of her own until the budget gap is closed.
Governor's package is key
What has helped most to make that gap manageable on paper is the substantial $85 million growth in the basic education subsidy, part of Rendell’s proposal to increase and reallocate state aid, that the District is counting on from Harrisburg. But officials likely won’t know how receptive the legislature will be to that increase until the end of June.
There is no disagreement that draconian cuts will result if Harrisburg approves less than the $85 million.
Among District leaders, there is also optimism that Mayor Nutter’s administration will prove to be serious about saving millions through shared services with the city. He has established a task force to study such parallel programs as afterschool, safety, employee benefits, and energy management to find where it might be possible to join forces and cut costs.
Other bright spots in this undeniably tight budget include a plan to reduce class size in 35 Corrective Action II schools and boost support for art and music instruction– but this $15.4 million package of SRC initiatives will necessitate equivalent reductions in other areas.
Coming on the heels of two major central office layoffs and many other rounds of cuts, this time there is little low-hanging fruit. “Any reduction at this point is very difficult, particularly after last year, given what we did go through, with about $70 million worth of cuts,” Brady said.
The District central and regional office staff was reduced by 240 in those cuts. There has been no formal evaluation of the impact of those cuts on services to schools and students, but some District staff say that reductions in areas such as human resources and accounting are hampering operations.
Whatever additional steps are taken to close the pending budget gap, the 2008-09 budget already contains a number of austerity measures:
A $4.3 million transportation cut, which may be achieved by requiring that a student live at least two miles from school, instead of 1.5 miles, in order to be eligible for a TransPass.
The elimination of 151 teaching positions as a result of the continuing decline in overall District enrollment.
No funds in the capital budget for new construction beyond the projects already budgeted, with funds for maintenance over the next four years falling substantially below the annual repair needs in the District’s aging buildings.
No funds budgeted for the authorization of any additional charter schools, besides the two already scheduled to open in fall 2008.
No money for reforms
Parent activist Gym observed that the budget makes no money available for the restructuring of Corrective Action II schools or for proposals coming out of the High School Blueprint planning process. She said that funding for education management organizations and other contracts could be further reduced to free up resources for school-based programs.
Parents United is also questioning why the District continues to carry 85 employees from the Bureau of Revision of Taxes on its payroll, costing $4.9 million annually. These positions are for the purpose of collecting the portion of real estate taxes that are funneled to the schools. Gym said there is no reason for the workers to be charged to the District – except so that they can avoid the city’s ban on political activity. District workers have no such prohibition.
“We have a real problem with all the political appointments,” Gym said. “They wouldn’t be acceptable on the city’s payroll, so they shouldn’t be on the District’s payroll.”
The District’s new five-year financial plan does offer some optimistic revenue forecasts. That is premised upon Gov. Rendell’s ability to get the level of education aid increases he is seeking as well as a new formula for distributing that aid.
“As the District regains fiscal stability, it will be able to use a significant portion of the Governor’s proposed, multi-year increases to Basic Education funding for new academic reforms,” the plan says.
The amount Philadelphia would have available for new programs if the governor wins passage of his full school funding plan would grow from $41 million next fall to $272 million by 2011.