The School Reform Commission adopted a $2.66 billion “lump-sum budget” Thursday evening. The lump-sum budget provides overall projections for revenue, expenses, and any surplus or deficit, but does not include a detailed breakdown. The detailed budget typically comes in late April and must be adopted by May 31.
From the budget and Thursday's presentation by District staff, here are some key numbers on this year and how officials propose to close a huge gap for next year.
♦ The District ended last fiscal year on June 30, 2012, $20 million in the red.
♦ This fiscal year, ending June 30, the District expects to spend $227 million more than its revenues.
♦ The District is staying afloat financially this year on the strength of a $302 million deficit financing bond that it issued last fall.
♦ The deficit from last year and the current fiscal year means that all but $58 million of the borrowed funds will be gone as of June 30, 2013.
♦ Initial projections for next year (2013-14) are that the gap between revenues and expenses will widen, with expenses for the year exceeding revenues by $304 million ($2.66 billion in expenses vs. $2.36 billion in revenues).
♦ Those projections assume about a 2 percent increase in revenues and a 5 percent increase in expenses.
♦ A major driver of the increased expenses is charter school costs, which are expected to rise by more than $80 million to $690 million next year.
♦ After tapping the District’s remaining reserves, there will still be a $242 million gap to close next year.
♦ To eliminate that gap, the District first proposes to cut a total of $133 million from its salary and benefits lines – a 10 percent cut. No additional reduction in force in schools is planned.
♦ District also hopes to receive $120 million in additional funding from the state and $60 million from the city. State officials quickly cast doubt on the likelihood of that occurring, while Mayor Nutter said the city would "very seriously" consider the request.
♦ Without the $120 million boost, state aid to the District would be 9 percent less ($131 million less) than it was in 2010-11, the last year of the Rendell administration.
♦ If it were to achieve both the saving and revenue projections -- an unlikely scenario -- the District would end the year with a $56 million fund balance to hedge against potential but unplanned expenses.
♦ On top of proposed cuts to the operating budget, schools face the loss of as much as $134 million in federal funding, due to factors including the expiration of federal grants and possible cuts due to the sequestration. These cuts could cost the District 1,300 school-based jobs.