DN Editorial: School budget: Sky falls again

AFTER YEARS, if not decades, of school budget crises, you'd think there would be no more sky to fall, but last week the School Reform Commission found a big piece of very cloudy sky that will do further damage to the ongoing struggles of the district: an additional $61 million that school leaders must cut by June, and no immediate plan for how.

In attempting to understand this latest news, our first question is: Why is this crisis different from the others? And by "the others" we not only mean the budget crises that have marked almost every year for the past few decades, but the more recent troubles; as recently as December, the district announced $10 million in cuts. Apparently, some of these cuts weren't made in time, compounding the problem.

One key difference between this crisis and others, though, is the composition of the School Reform Commission, which now includes people with expertise in big budgets. They have brought in a short-term chief recovery officer, Thomas Knudsen, who as CEO, stabilized PGW - possibly the only budgetary quagmire more complicated than the district's.

Chief Financial Officer Michael Masch and Acting Superintendent Leroy Nunery will now report to Knudsen. Knudsen's appointment is cause for confidence, because his track record suggests he will bring a financial discipline to the exercise that has been lacking. And we see Knudsen's lack of educational background as a plus. Unlike a traditional superintendent, he won't have a programmatic agenda that could be in conflict with getting the books straight. We also see many parallels between the challenges he faced at PGW - a highly regulated entity with a job made more difficult by the large poor population it must serve. That's certainly a factor in the district's management, especially since the state's funding for basic education has made the biggest cuts to the poorest districts.

But obviously, the problems are more complicated than that. As the total student population has remained about the same, the district's budget over the past seven years has grown. Accounting for some of those budget increases are rising wages, benefits, and pension costs. Another big difference is that increasing numbers of those students end up in charter schools - a number that has doubled in size since 2005, from 25,000 to 52,000. The district has paid charter schools for each student enrolled and has gotten partially reimbursed by the state for these costs, but that reimbursement stops this year. (Yes, the sky will fall further because of that, even before factoring in charter enrollment increases from the closure of archdiocesan schools.)

For now, we'll trust the SRC will create a viable plan - unlike City Controller Alan Butkovitz, who couldn't contain his panic a minute longer in his public questioning yesterday of the future viability of the district.

It seems only fair to stand back and give this new team room to fix this.