School District Tackles $185.9M Budget Hole

On the same night , the School Reform Commission shared the current status of the 2013 budget—a $185.9 million projected deficit.

"We identified what we believe to be the budget gap... It will be a painful and challenging process," Commissioner Feather Houstoun said Thursday night.

In a presentation to the SRC, Chief Recovery Officer Tom Knudsen, the acting superintendent, laid out where the district fiscally stands and previewed the action needed before a finalization budget is approved in May.

"The lump sum doesn't have to be balanced and will indicate the corrective actions that we'll need to pursue over the next 12 weeks," Knudsen said.

The district anticipates costs will run $2.5 billion, which is an increase of $274 million. That includes a $42 million projected salary increase and a $72 millon benefit increase, on top of $110 million added to debt services.

Leftover spending from the 2012 budget, which was a concern earlier this year, was wiped out, so there will be a $0 fund balance carried over. SRC Chairman Pedro Ramos called that a silver lining.

"The shortfall shown in the lump sum budget is an honest accounting of our dire circumstances," Ramos said in a news release. "The SRC and District have made important strides toward fiscal responsibility and transparency, but, as this document shows, the road ahead is still a rocky one.

"Our most important job is to keep a quality education for every child in the public school system our priority, even as we bring our finances back into long–term structural balance."

According to the school district, a "budget in brief" will be released in early April, with public meetings held on the info. The SRC will testify on the budget before Philadelphia City Council May 8 and 9, and will vote on a final budget by May 31.

View the lump sum statement by clicking the attached document.

Editor's note: The reporter based the article from watching the live hearing broadcast online.