Scaled-back budget still has a record spending increase
Even after making drastic adjustments in its budget to close a gap due to a disappointing state budget package, the District is still enjoying a record increase in its spending this year.
The revised $3.1 billion spending plan that was put before the School Reform Commission in November is still $326 million more than was spent last year – an extraordinary 12 percent increase. The increase would have been $100 million higher if the District had received the funding it had hoped to get from the state.
Even after the recent reductions to the District’s spending plan, the new budget “still means good things can happen for children,” said Superintendent Arlene Ackerman.
Federal stimulus dollars account for most of the net growth, spurring the hiring of more teachers and counselors, and supporting implementation of much of her Imagine 2014 strategic plan.
However, this fall’s adjustments were so substantial that a revised mid-year budget is being circulated and submitted to the SRC for approval at a special December 18 meeting.
Prior to a summer-long budget deadlock in Harrisburg, this was expected to be truly a banner year for school funding in Philadelphia due to the federal stimulus program.
One important element that survived the stalemate was the state education funding formula put in place in 2008, which delivers more aid to needier school districts like Philadelphia, moving these districts toward a six-year target for adequate funding.
While the formula for distributing the aid stayed in place, state Republicans were ultimately able to slash Governor Ed Rendell’s total education allocation. Much of the federal stimulus funding was used to replace rather than add to state dollars for schools.
Led by Chief Business Officer Michael Masch, District staff worked through the fall to find cost savings and close what had become a $196 million gap in their spending plan – a mismatch caused by increased spending and the shortfall in funds from the state.
An unexpected $28 million budget surplus and a carryover of unspent Title I dollars from last fiscal year helped the District minimize the spending adjustments. Because the District is using this surplus to balance its budget, its current year expenses are out of balance with current revenues.
The District’s gap-closing plan mostly steers clear of instructional cutbacks but is not painless. Its impact on the ability to finance a new teachers’ contract is unclear.
The plan includes major hits to central office and operational areas – almost $40 million in reductions to administrative support and other non-instructional spending. In addition, a planned $26 million upgrade to the District’s antiquated data systems has been postponed.
According to Masch, the District expects to save about $1.2 million by asking principals to trim school budgets, although as of mid-November, principals had not been notified of this.
And despite data showing the dropout rate is increasing, the District found itself shelving plans to create a new Re-engagement Center in North Philadelphia. It is also scaling back its expansion of slots in alternative programs for out-of-school youth.
However, officials emphasize that they were able to make good on most of the planned first phase of Imagine 2014. In all, they added more than 1,100 full-time positions, including 708 teachers and 327 counseling and student support staff. Among the positions are 43 new ESOL teachers.
Moving forward in a big way on class size reduction, the District created 276 new teaching positions to improve ratios in grades K-3 at its 177 elementary schools.
“The classes in many of our Empowerment Schools are actually 17, 18 to 1.” Ackerman said. “So you have to go into the schools at the early grades to see the difference.”
Empowerment Schools, those targeted for most help due to lagging achievement, also got new reading specialists.
Masch said the District had reached all its class size targets for the early grades, which were set by grade level: no more than 20 to 22 students per class in Empowerment Schools, 23 to 24 students in other schools not making adequate yearly progress (AYP), and 23 to 26 students in schools making AYP.
But the District did not respond to requests for data to back up this claim.
The longer-term picture for District funding is cloudy. While there are hopes of additional federal funds, the economic outlook for the state – the District’s biggest funder – is grim. The key question for 2010, said Masch, is “Will the governor and the state legislature agree to a third-year of adequacy funding?”
“I’m hopeful that the governor will support that, but he has to support it within the context of a balanced budget that the General Assembly will approve,” he said.