This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.
The SRC adopted a "lump sum" budget Thursday that assumes that more than $264 million in new revenue from the city and state will be delivered. The funding has been proposed by Gov. Wolf and Mayor Nutter, but is by no means guaranteed.
The District needs to use $85 million of that just to keep services at current levels, according to Chief Financial Officer Matthew Stanski. It plans to use the rest to restore money to schools and embark on some of Superintendent William Hite’s new initiatives.
Of that amount, about $130 million would be added to school budgets for use as principals see fit. That increase works out, on average, to more than half a million dollars per school.
Among Hite’s recommendations for use of those funds is to restore counselors and nurses, whose ranks have been decimated by cuts since 2011.
Other recommendations include adding AP courses, putting students in small groups for "differentiated instruction," credit recovery courses for over-age students, tutoring and Saturday programs to help students prepare for Keystone exams, more arts and music programming, initiatives to improve school climate, and coaching for teachers so they can offer better literacy and math support to English language learners and special education students.
Besides putting money directly in schools, the District plans to invest about $18 million in a new "turnaround" network of schools, $9 million in a network of alternative schools, $14 million in school facilities, and $5 million in staff development.
Principals are being given two different total budget numbers for next year to work with and are being asked to prepare two school budgets: one that assumes only enough revenue growth to keep services at present levels and one that assumes all the new revenue will be forthcoming.
There are changes, however, to how the existing level of funding is divided up among schools. Schools with lower levels of poverty will be getting fewer federal Title I dollars than last year, while high-poverty schools and schools with low achievement will see some new funds.
"Our target is not just to balance the budget, but to get $264 million in new revenue," Stanski said. "We desperately need it. The status quo is just not acceptable for our students."
But he stressed to SRC members that for now the real school budgets will be those with just $85 million in new funds, which would merely maintain current services.
"This is all for planning purposes," he said. "We are not going to begin to spend any of this money until we actually know it is coming to us."
Stanski also called for changes in how the state funds charter schools, saying that the current method of funding will cause huge problems for the District starting in 2017 if its budget grows as hoped.
That’s because the District pays out a charter reimbursement rate based on per-student District expenditures in the prior year. If per-pupil spending in District schools goes up in 2015-16, then so will the amount that it must pay charter schools in 2016-17.
The District expects to spend $760 million on charter costs next year. The following year, assuming the higher per pupil cost combined with some growth in the number of students, that amount could grow to $887 million.
Next year, Stanski explained, the way the law and the funding system works, the full $264 million in additional funds would be spent on the 130,000 students in District-run schools, but the following year would have to be shared with the 65,000 students attending charters. To prevent another structural deficit, the District would need $100 million more, he said.
Commissioner Feather Houstoun remarked that the charter formula "creates dysfunction for everyone." She asked Stanski what he would do. Stanski said that in the guidance to principals preparing a budget based on the full $264 million increase, the District urged that about half the funds be used for non-recurring expenses such as IT purchases. The advice, he said, "wouldn’t be to hire a bunch of folks and have to lay them off a year later, because we don’t have the money to sustain people."
Political battling in Harrisburg over changing the way charters are funded has been fierce, with one of the major points of contention being the way special education students are paid for. Charters get a fixed amount for each special education student, often two to three times what they get for each non-disabled student. The amount is fixed, regardless of the severity of the disability or the actual cost of educating the student.
A state legislative commission proposed last year to set up a multi-tiered system that would tie the special education payment to the actual cost of educating the student, but it was not passed. The charter law also doesn’t require charters to spend the money earmarked for special education students on those students. During the political debate, several operators acknowledged that they sometimes use the money for other purposes, but justified the payments because they said they do not get enough money for each regular education student or for building costs and other expenses.
Increases in the District’s fixed costs, including pensions, health care, debt service, and charters for next school year, will total $88 million, Stanski said. Charter costs for next year account for nearly half of that growth, $41 million, and will climb from $719 million to $760 million. That is due to a combination of increased per-pupil payments and higher charter enrollment.