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Budget crisis: No end in sight

More than $100 million in additional savings is needed. There’s been little headway in getting union givebacks.

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

Massive budget cuts implemented this summer have narrowed what was once a record $629 million budget gap. They’ve also hit the central office and schools hard, affecting virtually every aspect of the District, from class sizes to cleaning crews.

And the job of cutting is not done. District officials say about 80 percent of the gap has been taken care of.

While the predictions of a chaotic opening of school did not materialize, the gravity of the budget reductions has not gone unnoticed.

"This is a terrible tragedy that we have to reduce the workforce this much," said Chief Financial Officer Michael Masch. "Nobody thinks that we were overstaffed overall."

Masch said the District’s hand was forced when it got "dramatically less money – and now we have to cut the spending to match the revenues."

The District’s spending plan, adopted May 31, had projected the loss of 3,400 jobs due primarily to the end of federal stimulus grants and a reduction in state aid. But an additional round of cuts was announced in August after the state adopted a budget with even lower levels of aid to Philadelphia than the District had been counting on.

In this round, the biggest reductions were to the Promise Academies and to school nurses. More than 40 nurse positions had already been eliminated in spring cutbacks.

"Most of the positions that were lost were in part lifelines to kids and families," said Shelly Yanoff, director of Public Citizens for Children and Youth, a child advocacy group.

Unions on the spot

The savings the District says still must be secured are in excess of $100 million. Some $30 million of that is to come from finding new efficiencies and selling surplus property. But the bulk of that represents the District’s continuing demand for $75 million in givebacks from its five employee unions.

The principals’ union first narrowly voted down a concessions package but then reversed itself in September after the District announced layoffs of 27 assistant principals in response. With a revote, the union averted the layoffs for the time being but surrendered a pay increase and other benefits. Savings to the District: about $2 million.

The District’s transportation, maintenance and custodial workers also voted down a concessions package, and the District parried in September by sending out layoff notices to 848 members of SEIU Local 32BJ’s District 1201. The union’s contract requires 12 months notice for layoffs, so they will not take effect until next fall and will provide no savings in the current fiscal year.

The Philadelphia Federation of Teachers and the union representing school police say they are not having any of it. They have so far declined to enter into negotiations.

School police have a contract that runs through 2013 and prohibits layoffs of any full-time members. But 190 per-diem employees have been laid off.

According to Michael Lodise, who heads their union, "We didn’t create that shortfall. We had nothing to do with it and we’re not going to take that shortfall out on the backs of the workers."

He dismissed the idea that the District would lay off his members down the road. "It’s threats, that’s all."

Acting Superintendent Leroy Nunery, who stepped into that role in August, has the tough task of explaining to District workers and their unions why they should make concessions to a school system that just paid out about $1 million in a severance package to departing superintendent Arlene Ackerman.

More drama and trauma

Some of the gap-closing measures this year are one-time devices – like deferring payments to SEPTA for a restored TransPass program and paying them back over five years. This means the District already is anticipating a challenge to keep things in balance for 2012-13.

But the biggest budget trauma next year may be the one faced by Philadelphia’s charter schools, which did not have to deal with reductions in their District funding this year.

Under state law, the per pupil payment to charters is based on the expenditures per pupil in the School District in the prior year, and the overall reduction in District spending this year, according to Masch, is likely to end up "in the 15 percent range."

"What happens to District-operated schools this year happens to charters next year," he explained.

Yanoff said for anyone who doesn’t want to face another year of painful cuts, the task ahead is "documenting what we have lost and making an even better case to our elected officials."

Around the state, school budget hardship may be changing some minds already, she said. "Legislators are seeing first-hand the effect on public education of what they voted for."