School district announces $304M shortfall

District Superintendent Dr. William Hite Jr. — PHOTO COURTESY THE NOTEBOOK.ORG

After announcing this week that the School Reform Commission reversed course and decided not close Beeber Elementary, and instead change the school’s grade configuration — but will proceed with the closing of M. Hall Stanton Elementary — the School District of Philadelphia has released the budget for each individual school in its portfolio, while also delivering perhaps the most sobering news yet in the ongoing crisis enveloping the district.

The district is facing such a budget disaster that officials are warning that if the situation doesn’t change, the district will be in a place from which it likely won’t recover.

“We are facing an unprecedented financial crisis. Without additional support from the city and state, we will not be able to support district operations — which will have a direct and severe impact on meeting the basic needs of our students,” District Superintendent William Hite Jr. said. “The district is at the breaking point, and we are looking to our city and state leaders to provide the necessary financial support to ensure the students of Philadelphia receive the same opportunities as children across the Commonwealth.”

The figures released by the district are grim, with the district facing a $304 million budget deficit for FY2014. This announcement comes a few short months after Chief Recovery Officer Thomas Knudsen secured a $300 million bond deal to close a similar gap in last year’s budget. At the time, district officials said they could not borrow any more money and couldn’t do any bond deals.

Contributing to the deficit are two budget requests that aren’t considered as givens in the budget: $180 million in new revenue made by the city and state, and an additional $133 million in savings from labor negotiations and the continued elimination of non-union jobs.

The state also hasn’t reimbursed the district the funds the district has paid into the local charter school system. State Representative James Roebuck said there are several pieces of legislation being considered at the state level that would reform charter school finances, and that perhaps, some of that money could find its way back to the district; and City Councilwoman Jannie Blackwell, who is convening an education hearing on April 29th, has maintained that the district will have to convince council, and a very skeptic public, to bail out the district.

“Some people feel the district is in threatening mode and are not dealing with any plan, but dealing with numbers. Some feel that this is the district’s way of threatening people,” said Blackwell, who serves as chair of council’s education committee, and added that the district is asking for an additional $60 million from the city and $120 million from the state. “But that doesn’t change the question. People still want accountability; as much as people are worried about schools, they are still not willing to have their taxes increased because they can’t afford it.

“People feel pressured all the way around.”

The district, Blackwell said, will have to talk about how it has spent and managed its finances, and also convince the Philadelphia Federation of Teachers for increased givebacks – something Blackwell said she doesn’t get the sense the PFT is willing to do, especially in light of recent concessions made by the teacher’s union.

“There are going to be some hard conversations,” Blackwell said. “Are we scared? Frightened? Absolutely we are, but that doesn’t mean that people are just going to give in, especially when there’s no real open process of how we got here and how the money is spent.

“By law, the district has the right to decide how to spend the money and doesn’t have to tell us, but that’s hard to take in this current climate,” Blackwell continued. “You just can’t throw bills at people and say ‘pay them.’”

Councilwoman Blondell Reynolds Brown, who serves as education committee co-chair, said she will proceed deliberately in studying the district’s financial malaise, but also placed a good portion of the blame at the feet of Pennsylvania Governor Tom Corbett.

“I must first sit with the administration, Council President Darrell Clarke and Councilwoman Blackwell to plan a path forward after I have studied the details. Preliminarily, I believe we need to find responsible ways to generate this $60 million investment in our students. It is a heavy lift, but that is what we were elected to do. We have done it for the last three years and we the members of City Council are up to the challenge again,” Brown said. “The focus must be on the Corbett administration, who thus far has been counted absent in the discussion. For three years they have ignored their Constitutional duty to educate the students of the Philadelphia. It is time for the Corbett administration to step up to the plate.”

PFT President Jerry Jordan mostly agreed with the sentiments from Blackwell and Brown, as Jordan also pointed to the state’s continued erosion of its education budget as a primary driving force as well.

“I think that Philadelphia is suffering from underfunding by the state. Governor Corbett cut $2 billion from school districts budgets [across the state], and Philadelphia is suffering from that loss of state funding,” Jordan explained. “And so this isn’t something that just developed; but the cuts over the past two years have caused the pain we are feeling, and it means we are not providing our children with a thorough and efficient public education.

“We are not getting equitable and adequate funding for the children of Philadelphia,” Jordan continued, adding that the district wants PFT members to give back an additional 13 percent of their pay, on top of agreeing last year to a wage increase freeze. “The district just can’t continue to manage the way it has been. It’s going to come down to a decision we as the general public are going to have to make: either pay for education on the front end or the back end, but you can choose to educate today or incarcerate tomorrow.”

While the district has already stripped most of the services it provides, and while officials have said there’s simply nothing left to cut, should the district not receive the support it needs, it will have no choice but to cut guidance counselors, librarian services, music, sports and after school programming. The district will also scale back staff at its central office, while cutting extracurricular education and teaching programs, leaving in doubt the recently-announced PhillyPLUS summer teacher residency program.

The SRC is scheduled to hear public testimony from the public during a special SRC budget meeting on Tuesday, April 30 at 5:30 p.m. SRC and District representatives are also scheduled to testify on the budget before City Council on April 29. The SRC is scheduled to vote on a final budget on May 30.

All necessary and eventual, Hite said, if this budget gap goes unfilled.

“Our budget situation is dire, and we are asking all parties for the same sacrifices we have asked of parents, students and employees, nothing more,” Hite said. “We know that we must come together to obtain new state and local sources of revenues from the city and Commonwealth of Pennsylvania. We must also work in partnership with our employees to find personal savings.

“Without them, these budgets and dire outcomes will become a reality.”

 

Contact staff writer Damon C. Williams at 215-893-5745 or dwilliams@phillytrib.com.

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