School district says it can balance budget

The school district maintains that it will be able to present a balanced budget, despite reports claiming a nearly $500-million deficit.

Nonemergency spending will be restricted and officials will seek discounts from vendors, Deputy Superintendent Leroy Nunery said before yesterday's School Reform Commission meeting, adding that the district will have to make hard budget decisions in order to adjust to the budget crunch.

Last month, Schools Superintendent Arlene Ackerman said that next fiscal year's shortfall will be $234 million, all from the loss of federal stimulus dollars, but district sources with knowledge of the budget have placed the gap at more than $400 million.

"Here in Philadelphia, we knew this was going to occur . . . [t]his is not a surprise," Nunnery said, referring to the federal stimulus money being a one-shot deal. "This is the type of thing you would expect with the very nature of the stimulus money."

Chief Financial Officer Michael Masch emphasized that although there have been significant changes in the sources of revenue coming to the district, the district is not facing a dire budget crisis.

Still, the district is also facing rising operating costs from salaries, health-care expenses, pension contributions, facilities maintenance and costs for food services.

Masch said the district has already taken measures to bridge a possible budget shortfall.

"It is true that if we don't take corrective actions, we could have a budget gap for next year," he said.

"But we don't have a budget crisis. And the reason why we don't have a budget crisis is that we understand we have to take corrective actions, and we're doing so much earlier than we normally would in order to ensure we don't experience a financial crisis."

Though funding from Harrisburg is expected to decrease, Masch anticipates that the Legislature will appropriate money from the Education Jobs Bill, passed in August.

The district could see $97 million over two years. Gov. Corbett will introduce his first state budget in early March.

Much of the stimulus money has been spent on Ackerman's five-year "Imagine 2014" plan - which calls for smaller class sizes, more school personnel and summer school - prompting critics to question the administration's ability to manage its resources.

Masch said that those claims are inaccurate and that district leaders spent the funds responsibly.

Meanwhile, district officials are facing a growing number of vacancies in their schools.

The district currently uses only 67 percent of student space across all district buildings. The standard in the nation is 85 percent, said Danielle Floyd, deputy for strategic initiatives.

Months ago, officials revealed that there are 45,000 empty seats in buildings across the district. That number is now 70,000. To visualize what that looks like, picture Lincoln Financial Field at full capacity, Floyd said.

The district has lost 11,000 students to charter schools over the last five years and that number is expected to grow as officials anticipate an increase in nontraditional schools.

On average, one in five property-tax dollars is going toward funding empty seats.

Nunery said that the district will consider several options, including closures, consolidation and sharing space with outside vendors, including charters.