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February 2011 Vol. 18. No. 4 Focus on School Closings

News in brief

Facing a daunting budget gap, District is in austerity mode

By by Paul Socolar on Feb 2, 2011 07:32 PM

Four years ago, the School District was entering its budget season facing an unprecedented $180 million budget gap. For months it focused on finding the right combination of cuts and new revenues to balance the budget.

As it prepares its 2011-12 budget, the District is staring at a daunting gap easily twice as large as 2007's – and both its main funders, local and state government, face financial problems of their own. In January, the District moved into austerity mode, restricting "non-urgent spending" for personnel, contracts, equipment, and supplies.

At the same time, District officials consistently declined to put a dollar figure on the impending hole they will face next year, other than to acknowledge that a quarter billion dollars in federal stimulus funding for Philadelphia is coming to an end. They emphasize that they expect to end this school year in the black.

On top of losing the stimulus, the District faces substantial cost increases next year for salaries, pensions, utilities, debt service, and charter schools. Some sources have put the total gap at over $400 million. The District could cut all the extra money in this year's budget for its Imagine 2014 strategic plan initiatives – which Superintendent Arlene Ackerman said she won't do – and still only close half of the gap.

Former interim District CEO Philip Goldsmith, a Daily News columnist, said he doesn't understand the District's reluctance to state the size of the problem. "It's important that the public be informed of the fiscal realities of the District so it can be prepared for the consequences and help shape the discussion," he told the Notebook. "Not talking about it openly does not make the problem go away."

Goldsmith has argued that the District's budget shortfall is largely "self-inflicted."

"It has known for a very long time that this day of reckoning was likely to happen," he said. "It should have made reductions a while ago. The longer it waited, the larger the cuts would have to be in the future."

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