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A good news/bad news education budget

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

Perhaps you’re reading "good news" headlines about education faring well in the state budget agreement and thinking that maybe the talk about a big Philadelphia school funding shortfall was a false alarm. The Rendell administration is touting continued progress toward equitable state funding and preservation of a funding formula. Saturday’s Inquirer story (mistakenly) reports that Philadelphia will be seeing "several hundred million dollars more" than last year.

Sorry to bust any bubbles, but the news for Philadelphia this weekend is not good, because the District has been working with a budget that posited an 11 percent increase in revenue. We know now for certain that the funding increase Philadelphia will be getting is well below half that. And the District appears to have already committed more than it has available.

What hasn’t changed in the past several weeks is the basic framework of the state budget deal, which according to Chief Budget Officer Michael Masch gave Philadelphia schools a whopping $160 million less than the $300 million revenue increase it was counting on.

The main problem: State legislature did not go for Gov. Rendell’s idea of distributing federal stimulus funds directly to school districts, and they also demanded a substantially smaller boost in the basic education subsidy to school districts – with the increase funded through stimulus dollars. Together, these changes cost the District $144 million, not counting possible cuts to other education line items.

Then even in a best-case scenario – if the budget followed proposals by House Democrats – Masch anticipated cuts in several line items, including the elimination of Classrooms for the Future ($7 million), amounting to another $13 million. Hence his ballpark estimate of a $160 million revenue shortfall.

The final budget is neither a worst-case nor the best-case scenario. Here you can see the state’s final line item appropriations (education starts on page 7) and see why Philadelphia’s budget is likely going to need to be slashed by even more than the ballpark figure of $160 million. Even though some key state budget lines like special education, accountability block grants, Head Start, and preK were not cut, others were. The District’s $3.2 billion budget is going to have to become more like a $3 billion budget … no mean feat.

Here are some of the problem areas where it looks like the District will be taking a hit – we’ll know more about how bad a hit after Masch’s presentation at Wednesday’s School Reform Commission meeting:

  • Charter school reimbursement – the District budgeted for a $13.8 million revenue increase, but state funding is flat.
  • The Education Assistance program – these funds for tutoring are being cut statewide by 9 percent, which could amount to a loss of $3 million for Philly.
  • School employees’ social security – state support was projected to increase by $1.8 million but is actually being cut.
  • Other smaller line items – school improvement grants, high school reform, teacher professional development – also face cuts.

Take our poll – how should the District deal with its budget shortfall?

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