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by Benjamin Herold
for the Notebook and WHYY/NewsWorks
 

After months of maneuvering, the School Reform Commission is scheduled to vote Thursday on a $2.55 billion operating budget for the 2012-13 school year, including a projected $218 million gap that will likely be plugged through deficit borrowing.

But first, parents, advocates, and labor unions – angry at deep cuts to schools this year and fearful of a new “transformation blueprint” that would radically overhaul public education in the city – are planning to turn out in force to protest.

“We’re not taking it anymore,” said parent Shakeda Gaines, president of the Home and School Association at Finletter Elementary, one of more than 40 schools that will send parent representatives to Thursday’s meeting to stage a “vote of no confidence” in the District’s budget and transformation plan.

The final straw at Finletter, said Gaines, who has three children at the K-8 school in Olney, was when parents “were asked to buy toilet paper for our children to go to school.”

The “vote of no confidence” is being coordinated by Parents United for Public Education and the Philadelphia Home and School Council.

Fifteen organizations, including the Philadelphia Federation of Teachers and student organizing groups Youth United for Change and the Philadelphia Student Union, have also signed on to participate in a protest rally outside District headquarters at 4:30 p.m. 

The SRC meeting itself will begin at 5:30 p.m. in the auditorium of 440 N. Broad St. An overflow crowd is expected. 

The proposed District budget to be voted on by the commissioners includes another round of cuts to basic services, including the elimination of nearly 100 counselors and the elimination of summer school for the vast majority of students. 

Even so, the District will need to borrow up to $218 million to plug the remaining gap in its operating budget. Spokesman Fernando Gallard said the District intends to ask the State Public School Building Authority to authorize issuance of 20-year bonds next fall.

District officials, however, want to discontinue the practice of borrowing to cover operating costs. At least one prominent ratings agency, Moody’s Investors Service, already considers the District “below investment grade” – essentially, junk bond status – but has indicated that operating deficits in 2012-13 and beyond could lead to further downgrading of the District’s rating. That in turn would drive up borrowing costs.

In order to help close the gap between revenue and expenses in future years, the District is counting on Philadelphia City Council to approve Mayor Michael Nutter’s proposed “Actual Value Initiative,” a change to the city’s system for assessing property taxes that would generate an estimated $94 million for the District this year and continue to provide revenue in the future.

To date, however, Council has been resistant, and now there is talk of raising more city money for the District through other means.

No additional city funding this year would mean a gap of $312 million – a “truly unmanageable” amount, according to District Chief Recovery Officer Thomas Knudsen.

And a one-time influx of funds from a source other than AVI won’t provide the District with the long-term relief it needs, Gallard said.

“It is the District’s position that structural balance can only be reached by having recurring revenues,” he said.

But the city’s final contribution to the District will likely not be settled before Thursday’s vote. Though the SRC is required to adopt a budget by May 31, neither the city nor the state is required to pass a budget until June 30.

It also appears unlikely that the District will have a resolution with its largest blue-collar labor union, SEIU District 1201 Local 32BJ, before Thursday’s vote.

The District has already projected tens of millions in savings from modernizing the custodial, maintenance, and transportation services now provided by 32BJ members, possibly by outsourcing those departments entirely.

Officials from both the District and 32BJ have said negotiations are ongoing.

Teachers’ union president Jerry Jordan, on the other hand, said he will not come back to the bargaining table before the expiration of the teachers’ current contract next year.

“We made a $58 million concession in October 2011,” Jordan said. “We have an agreement and we plan on living up to that agreement.”

Jordan said his members are deeply concerned about both the impact of further school budget cuts and the District’s transformation plan, which he described as “intertwined.”

“By reducing the allocation to schools, cutting back services to children, outsourcing positions, and eliminating vital services, it’s setting up [schools] for failure,” he said.

Jordan said he planned to address the pre-meeting rally, then give testimony against the proposed budget before the SRC.

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