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Date: Thu, Oct. 19, 2006
Resource: Daily Herald
Schools will have to make $70M in
cuts, not $21M, officials now say
Philadelphia school district officials
yesterday said they planned to trim more than three times the $21
million in budget cuts they announced last week, and that means
layoffs, among other things.
Besides the $21 million, they need to cut nearly $50 million in
spending to replace the reserve fund, bringing the overall cuts to
about $70 million.
"This is a manageable situation. We're talking about less than 3
percent of [a budget in excess of] $2 billion," said James Nevels,
chairman of the School Reform Commission.
Nevels, speaking after the commission's regular meeting, said in
about two weeks he'd be able to say what programs would be cut, and
how many people would be laid off.
He and Paul Vallas, the district's chief executive, said they do not
plan to lay off teachers. But everything and everybody else, they
said, "is on the table."
Last week Vallas said 20 percent would be cut in central
administration spending and 10 percent from all contractors and
consultants.
But yesterday Nevels said more could be taken from those areas,
while other departments most likely will also have to absorb cuts
"to get us where we need to be."
The $21 million deficit was actually carried over from the 2005-06
school year, which ended June 30. School officials said they didn't
discover the deficit until late last month.
Back in the spring, officials estimated that they would need to use
$23 million from the district's $49 million reserve fund to balance
the budget. But by last month, they realized they needed $70
million, creating the $21 million deficit and wiping out the reserve
balance.
They had underestimated what they would need to cover the cost of
charter schools and paying retiring teachers and overestimated what
schools would leave unspent.
"We're going to have to make a series of cuts and reductions in
expenditures to cover last year's deficit, to adjust the base and to
begin to rebuild our budget reserve," Vallas said. "I think it can
be done without laying off teachers and without, really, directly
impacting schools." The firm of Public Financial Management has been
hired to help balance the books and develop a five-year financial
plan, Vallas said.
Also yesterday, City Controller Alan Butkovitz released an audit of
the School Reform Commission's financial practices, which he
described as "very Alice in Wonderland."
Though the individual items in the audit were relatively small in
absolute dollars, Butkovitz said the district's growing budget
deficits are harming its credibility with key funders in Harrisburg.
For example, it took the district more than a year to reconcile an
$8.6 million mistake in its budget, he said. The controller's
auditors found the double booking of an expense.
Butkovitz said Vallas' claim to fame is his expertise as a budget
guru not an educator, but he asserted that the district's fiscal
stability is "by every indication going South."
"You can't have it both ways. You can't say 'Trust me... Leave it
under my control.' And then say 'Oops, there's a $21 million
deficit,' " Butkovitz said.
"No other politician or elected official would get away with that
for two seconds."
He added: "I pray for Paul Vallas' redemption every day and I wish
that he would spend less time circling the wagons and worrying about
his next PR spin and more time" explaining the district's fiscal
issues to the controller's auditors.
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