Budget update: Ouch, there went $35 million

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

The state updated its projections last week of how much money each school district will receive from the federal economic stimulus. Philadelphia stands to receive $35 million less than previously projected – due to a reallocation of the one-time pot of money described as "state fiscal stabilization grants."

A document on the state Department of Education Web site, called "Updated Estimated School District Allocations (3/31/09)" shows that the School District will be receiving $102 million from this funding stream, rather than the $137 million they’d expected … but still a substantial chunk to be used on one-time expenses.

Education advocates have had many suggestions for the use of these funds, including: for principal training, for a pilot incentive program for teachers to work in hard-to-staff schools, for an overhaul of the troubled Human Resources data systems, or for small schools conversion and startup costs at high schools like Kensington, West Philly, and Olney.

District planning for the use of the stimulus funds is well underway, according to Michael Masch, the District’s chief business officer, who pointed to an 8-hour meeting that took place on Monday. A draft budget spelling out their plans will be presented at an evening SRC meeting on April 22, he said, to be followed by six community meetings for input.

This is the only significant variation so far from the District’s rosy lump-sum budget. In addition to the state stabilization grants, the stimulus package will in the coming school year also bring Philadelphia a projected:

• $120 million increase in basic education funding
• $81 million in new Title I money (a 46% increase)
• $23 million in additional special education funding.

Despite being hit with the $35 million adjustment, the District should still be in a position to increase spending by more than 10 percent next year – an unprecedented increase of about $300 million.

Masch said the allocation was cut because "PDE got it wrong." He explained that the U.S. Department of Education told the state they had used the wrong Title I formula for allocating this stream of fiscal stabilization funds. As a result of the change, urban districts across the state are getting smaller-than-expected increases, and the money is being spread across a larger number of districts, he said.