This deficit is no surprise – but unknown cuts loom

by Paul Socolar

Photo: Harvey Finkle

New CEO Arlene Ackerman has already become a key player in the School District's deficit reduction plans.

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.