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SRC adopts nearly $2.9B ‘lump sum’ budget for 2015-16

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

The School Reform Commission met Thursday afternoon to vote on a $2.86 billion "lump sum" budget for next school year that includes nearly $265 million in new revenue, based on proposals from Gov. Wolf and Mayor Nutter that would funnel more money to the District.

The budget shows that the District expects to end this fiscal year on June 30 with a $6.9 million surplus, which it plans to spend down next year.

According to the document, $84.7 million of the new funding will be needed to keep services at current levels, widely regarded as inadequate after several years of slashing personnel and programs. The remaining $180 million in additional funding, if received, would be available to restore to schools and other uses.

Wolf’s proposed budget would give Philadelphia $159 million in additional funds for fiscal 2015-16, while Nutter wants to raise property taxes and send $105 million more for schools. Wolf would also raise taxes to fund his ambitious statewide education funding increases.

The SRC will release a more detailed budget book in late April and hold hearings on April 29. It will appear before City Council on May 26 and plans to adopt a final budget on May 28. The deadline for the adoption of a state budget is June 30.

On Thursday morning, the SRC met to approve a bond refinancing that Chief Financial Officer Matthew Stanski said would save $3.3 million annually through 2023. It also approved $50 million in new general obligation bonds, which will cost some $3.7 million in interest payments through 2036, Stanski said.

The new bonds, the first time the District has gone into the capital markets since 2011, will pay for information technology (IT) improvements, the purchase of new buses, and repairs and maintenance of buildings.

Now, the District’s debt service approaches 10 percent of its budget and will be lowered slightly if the higher budget is approved for next year. That is much higher than the recommended debt service for school districts, which is 5 to 7 percent.

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