March 28 — 4:11 pm, 2019

Hite says new budget represents stability, progress, and good fiscal stewardship

The fiscal 2019-20 budget includes some new investments, it is expected to end the year with a fund balance of nearly $130 million. Deficits are foreseen in fiscal 2022.

Update: At tonight’s meeting, the Board of Education called a recess after a raucous protest by the Philadelphia Student Union prompted by a board decision to mandate metal detectors in all District high schools. The school board reconvened privately in a committee room, where they passed the 2019-20 budget.  

Public education activist Lisa Haver said the Alliance for Philadelphia Public Schools would challenge the vote as a Sunshine Act violation. “Governing bodies cannot recess in public and reconvene in private,” she tweeted after the meeting. “Votes have to be cast in public.”

The School District of Philadelphia’s proposed 2019-20 budget, benefiting from additional revenue from both the city and state, includes new investments such as more nurses, 30 additional teachers for English learners, 10 new college and career readiness coordinators, more behavioral health staff and counselors, and an extension of the early literacy initiative to the 5th grade.

Superintendent William Hite and Chief Financial Officer Uri Monson touted the nearly $3.4 billion “lump sum” budget presented Thursday to the Board of Education as representing “fiscal stability” as the District continues to recover after a long stretch of austerity and cutbacks. The 2019-20 fiscal year will end with a fund balance of nearly $130 million, and five-year projections show that a funding shortfall is not anticipated until fiscal 2022.

“When all we talk about are deficits and what to cut and what to close, and what to do without, that creates a … brand that speaks to more people than just us,” Hite said at a briefing for reporters. “We want the message to be the investments we are making in schools, the progress we are having in schools, and being good stewards of taxpayer money.”

Citing still-grim statistics – just 7 in 10 District students graduate high school, low percentages of students perform at proficient levels on reading and math PSSAs, and one-fifth of schools are at the lowest performance level, according to the District’s metrics – Hite said: “We still have a long way to go … but we are seeing progress in those things.”

Hite emphasized how the District is moving to his “anchor goals” from his Action Plan 3.0, which include 100 percent graduation rate, 100 percent of students reading proficiently by grade 3, 100 percent of positions filled by great teachers, and adequate funding with zero deficit. The graduation rate has steadily increased since 2014-15, from 65 percent to 69 percent for students in the District, including its alternative schools, which are second-chance schools for would-be dropouts. Among students who attend neighborhood and selective admission schools, not alternative schools, the graduation rate has increased from 74 percent to 79 percent during that period.

Literacy and math proficiency rates for 3rd through 8th graders are rising at a faster rate than for the state as a whole, in most grades. But overall, they are still low – in the 30s for most grades in reading and ranging between 17 and 25 percent for math.

Hite said that the District’s early literacy initiative, in which every K-3 teacher was specially trained and each classroom got a library of books geared to different reading levels, would be extended up to 5th grade. The District is also embarking on a similar initiative for math, “building a strong foundation to improve math teaching and learning,” Hite said, and providing more support for teachers and more math resources.

He also outlined plans to concentrate more services on children with special needs.

“When I talk about children with needs, I’m talking about children … who may be learning English, children who may be impacted with trauma, children who are transitioning into the [School District] who have been [Department of Human Services] system-involved … it is both a process-improvement strategy and a resource strategy.”

He acknowledged that “we have heard from advocates that we have children that are learning [English] that don’t have the supports in the schools that are needed. We have children that have education improvement plans or IEPs that … are not being implemented. We have to ensure that, regardless of where those children are, we have the resources to do those things.”

And he plans to reduce the number of classrooms affected by “leveling” by half. This is the longstanding, but unpopular process of shuffling around teachers in October after actual school-by-school enrollment figures have settled in. Its main purpose is to save money by using teachers most efficiently, adding teachers where needed but also taking them away from other schools.

On the issue of the condition of school facilities, Hite highlighted some building upgrades designed to “inspire creativity, collaboration, and hands-on learning,” and lead paint stabilization in 27 high-priority elementary schools that will be completed by the fall. Larger building repair and stabilization projects are generally done with money from the capital, not the operating, budget.

Hite said he doesn’t anticipate or plan any school closings, citing the District’s infrastructure dilemma: In addition to the sometimes dangerous conditions of many of the aging buildings, some neighborhood schools are bursting at the seams, while others, like Strawberry Mansion, have been losing population, but remain important anchors for residents and students.

He said that in general, the District underestimated overall enrollment growth and is now analyzing the demographics and looking at what it needs to do to accommodate what is happening. Options include building schools, changing school boundaries, combining programs, altering grade configurations in schools, and re-purposing buildings.

Neighborhoods seeing explosive growth include parts of the Northeast, as well as Center City, South Center City, and parts of South Philadelphia.

“For a school to go from 900 to 2,150 in a period of three years is pretty extraordinary,” Hite said, speaking of Mayfair Elementary in the Northeast. Nearby elementary schools, including Pollock and Holme, are also seeing enrollment spurts, he said.

“If you look at that growth, demographers will tell you they wouldn’t have estimated they would have that type of growth,” he said.

According to the five-year plan, which matches anticipated expenditures with expected revenue, the District will maintain small surpluses in 2020 and 2021, but then will see shortfalls – a projected $76 million in 2022, which is expected to balloon to $296 million in 2024.

Monson, however, wasn’t alarmed by those numbers. “There is a reason most other school districts don’t do a five-year plan,” he said. “Almost any other district would look like this.”

And they don’t want to signal a need to raise taxes.

“This is the reality,” he said, “Given what we know today, this is what we want everyone to be aware of so there are no surprises.”

Every other district in Pennsylvania, besides Philadelphia, has its own taxing authority. Philadelphia must rely on City Council and the state government for its revenue.

Under Gov. Wolf, education spending has steadily gone up since the severe cuts under Gov. Tom Corbett. And the city has significantly increased the amount of money it sends to the District, primarily through property taxes, but also through other sources, such as the cigarette and liquor-by-the-drink tax. Monson said that the District “continues to approach” a structurally balanced budget, one in which annual revenues match annual expenditures. He said that expenditures are growing at a 3.4 percent rate while anticipated revenues are going up by 3.1 percent.

Much of the spending, and the increases, however, go to fixed costs such as charter school reimbursements (up by $96 million, largely due to a substantial increase in the per pupil payment rate), pension costs, and debt service, leaving a limited amount for initiatives in schools and classrooms. Salaries and benefits are increasing $68 million over last year.

Pennsylvania continues to have the largest gaps in the country between its wealthiest and poorest districts, with more of the tax burden put on localities than on the state. A little more than one-third of the money spent on schools comes from Harrisburg, compared to a national average of close to half. This has put a greater burden on local communities.

Source: Public Interest Law Center

Lower Merion, just across City Line Avenue, spends more than $25,000 per student, while Philadelphia spends less than $15,000.

A fair funding lawsuit – in which Philadelphia was not a plaintiff but stands to benefit – is challenging Pennsylvania’s system, saying it violates both the state and federal constitutions by not providing all students with an adequate education. It has progressed further in the courts than any previous suit; a trial on the merits is scheduled in Commonwealth Court for summer 2020.

The Board of Education will hold a hearing on the budget on April 25, and District officials will appear before City Council on May 14. The full budget must be adopted by the end of May.

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