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The big budget book: 10 things to consider

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

With City Council convening Monday morning for its annual hearings on the School District and its finances, at least a few journalists and local activists spent part of the beautiful spring weekend preparing by trying to make sense of the District’s just-released 350-page “consolidated budget” for the coming year.

It’s dense and dry, but the document does give a detailed picture of what the District looks like now and what’s ahead. A somewhat easier read is the District’s "budget in brief," but that got posted online too late on Sunday to be previewed.

Unfortunately, there aren’t a lot of cheery numbers. District officials have announced that the gaping budget gap has forced them to issue school budgets this month that provide little more than teachers and a principal. They are asking for $60 million in additional funding from the city and $120 million from the state to forestall those extreme school-based cuts.

Here are ten points from the big budget book that stand out:

  1. On the one hand, the District is not assuming that any additional funds will arrive. Yet the bulk of the document is devoted to explaining how the District will allocate its money if it is able to raise enough new city and state revenues and extract enough labor concessions to avoid $254 million in “gap-closing measures” – including the cuts that have been applied to school budgets.
  2. We don’t get a full picture of the doomsday scenario. The document provides only the scantest detail about those gap-closing measures and exactly which expenditures will be cut if the new revenues and concessions don’t come through. It does indicate (p. 336) that $146 million in cuts will come out of school budgets and $23 million from the central office, and that all areas of the District budget will be affected.
  3. On the revenue side, the District’s assumptions start with the premise that city funding for schools will be flat next year (p.19), despite recent hoopla about renewed city efforts, spearheaded by former District chief recovery officer Thomas Knudsen, to improve collection of delinquent taxes. The projected increases in state funding are also modest. Those assumptions would have to change dramatically for the District to get the needed $180 million in new revenues.
  4. The District is counting on $10 million from sales of its vacant property next year (p. 19). Properties put on the market this year have generated less than $2 million so far. The District is presumably counting on closing the deal on some of the big-ticket properties now on the market like the old West Philadelphia High School.
  5. Add up all the District’s revenue projections, and it’s a stunning $400 million less than this year (p. 20). The main reason is that there’s no $300 million bond issue to keep the District afloat. But another huge blow is that $134 million in federal funding is going away – a mix of federal cutbacks and grants that are coming to an end.
  6. One of the federal cuts is a reduction of $2.5 million, or 6 percent, in Head Start Basic funding (p. 28). The budget tells us that the District’s decision to avoid service reductions by contracting out to lower-cost private providers is projected to eliminate 188 District jobs. Critics of the move say the caliber of service will take a hit, too.
  7. On the spending side, the District is projecting to spend just shy of $3.3 billion (p. 50) in the fiscal year that ends June 30, managing to stay just within their spending target overall. The budget for next year projects a $259 million reduction in spending – if the District is unable to attract new revenue. That’s a massive cut, especially on top of previous cutbacks. This will still be a $3 billion school system, but with $863 million going to charters and other schools not operated by the District..
  8. Although the District has stayed within its overall budget for the current year, several central office areas had expenses that ran significantly over budget (p. 50 and 62). For example, programs under the Chief Academic Officer spent more than $12 million beyond what was budgeteted. The central office may not be as lean as we were led to believe.
  9. Even if the District can avoid implementing its gap-closing plan, the budget calls for a reduction of nearly 1,500 instructional positions, mostly teachers. That represents a 12 percent cut and $81 million in savings. We are left to guess the number of additional instructional positions that must be eliminated if the gap-closing plan kicks in.
  10. The budget for District-operated schools (p. 68) shows that the budget cuts are not at all even across the board. What’s left of the system’s desegregation program – $4 million spent to maintain racial balance at a small number of schools – is zeroed out next year. Summer school has shrunk from a $15 million program two years ago to a $600,000 program this summer. On the other hand, Promise Academies get a $5.7 million funding boost.

Some of the most interesting parts of the document are in the hundreds of pages of details that follow, breaking down where the jobs are, department by department – and how much they pay. Even for those who are familiar with budgets, this one can be baffling. But we encourage readers to take a look.

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