Phila. SD deficit has grown to as much as $282m
Initially projected at $218 million, the deficit is now anywhere between $255 and $282 million.
Phila. SD deficit has grown to as much as $282m
Kristen Graham
Philadelphia School District officials gave an update Friday morning on the state of their finances, and it was more bad news.
Initially projected at $218 million, the deficit is now anywhere between $255 and $282 million.
City Council's decision to give the distict $54 million less than the $94 million it asked for is part of the reason for the new number. But there are other factors - $9 million more from city tax collections and a net $8 million change in state funds. And the district is also bracing for a revenue loss of up to $27 million by virtue of tax appeal losses.
Officials say they want to make up the money by collecting delinquent taxes, and say they are taking steps with the city to make that happen. Should that effort not yield enough new money, though, they say they will have to consider things like non-school cuts, reductions to salary and benefits (both unionized and non-unionized employees) and finally, school cuts - the last resort, they said.
The district was already planning on deficit financing its projected $218 million gap. School Reform Commissioner Feather Houstoun said that while the district has the authority to finance up to $300 million, it would not be wise to do so.
"If you use borrowing for this, it’s just another one-time revenue that you have to fill next year." Houstoun said. "The more we can limit the size of the deficit this year and the use of deficit financing for that, the better the sitation will be going forward into next year."
Chief Recovery Officer Thomas Knudsen said the shifting financial picture complicated the negotiations with 32BJ Local 1201, the blue-collar union representing bus aides, cleaners, mechanics and others. Hundreds of its members have received layoff notices that would take effect July 15 if no action is taken; the entire workforce would be laid off by the end of the year with no intervention.
Knudsen said no decisions had been made yet on whether the layoffs will take effect. Union officials have said they put millions in concessions on the table to save jobs but have not heard back from the district.
"Right now, we're still talking to the unions," Knudsen said.
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— Cuddles 
Comment removed.- Ahh, the old "delinquent taxes" solution. The majority of the money will never materialize and the borrowing will continue. Why not just close 12 schools and see what happens? Honestly, can you envision a worse scenario than the present one?— tomfox
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- This comment has been deleted. — Cuddles
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- And so it starts anew. The Philly schools are crying for money and it will never end. If you want to know why they can't make ends meet, just take Chaka Fattah Jr's contract, figure out why he received a boatload of money from the district for presumably no work and then multiple that contract by 1000 others just like it. The school district's budget is just a piggy bank for the politically connected.— Philly Lifer
- This is a black hole for money that will not end. It is time to start all over again in the PSD.— Wildman Bill
- Start running the schools like a business. Fund only those programs required by law. If something isn't legally mandated, then eliminate it. I don't care if it is free lunches, or whatever, get rid of it. Eliminate all unnecessary positions, and contracts not directly related to education. Eliminate all motor vehicles not used directly for building maintenance and school safety. Let the school district administrators, as well as the new superintendent, provide their own transportation to work. It may be painful, but you - the SRC - can do it. Just try.— JaxAx2Grind
- Tip of the Iceberg! 282 Million now and why stop their? This is a financial disaster. Here's a solution: Declare Bankruptcy--Fire all the people involved in this morass and start new. New contracts and new liabilities. First figure out your revenue stream and learn to live within it.— A. Martinez
- The PSD should declare bankruptcy! Renegotiate everything from contracts to leases to whatever. START over!!!— SPENDSPEND
- Even if all the delinquent taxes are collected, that will solve the problem for maybe 2 or 3 years. Then what?— Niko
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- This is not a black or white problem, so Lucifer and Astro Queen keep your racist drivel to yourselves. There are people of all ethnicities stealing from this city and until they are cut off, the problems will get worse.— mjwilliams75
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During the school year, you’ll frequently find her hosting live chats about the district on Philly.com. Please do pass along the scoop about what’s going on at your Philadelphia public school; Kristen welcomes tips, story ideas and witty banter at kgraham@phillynews.com or 215-854-5146.
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