Schools, Council in discu$$ions

Posted: May 24, 2011

Is City Council feeling generous?

In advance of today's public hearing, school district officials yesterday briefed Council members on their budget for the coming fiscal year - which faces a $629 million shortfall - and presented them with ideas on how the city could soften the blow.

One option raised in the private meetings, according to Council members, was providing more property-tax revenue to the district. The district receives 55 percent of real-estate tax revenue in the city and the city gets 45 percent. If the split went to 60-40, the district would gain about $53 million annually.

But such a change would leave a hole in the city's general fund, which covers basic expenses like police, sanitation and libraries. The district, in an emailed statement, said that no specific funding request was made and that the meetings were held to discuss options.

Most Council members said it was too early to say how they were going to proceed.

"My initial reaction is, I guess, negative," Councilman Bill Green said. "The school district should have been prepared for this. I also do want to make sure the schools have enough resources. I'm sort of torn on this."

The briefings were held in small groups so a quorum of Council members was never present, which would have required making the sessions public.

The city currently is set to provide 30 percent of the funding for the district's $2.8 billion budget for the financial year starting July 1. That budget is drastically lower than this year's $3.2 billion budget. District officials said the $629 million hole is due to a loss in state funding and to the expiration of federal stimulus dollars, which helped cover costs the past two years.

Schools Superintendent Arlene Ackerman and colleagues provided Council with a list of planned service cuts that could be restored if they got more funding, including full-day kindergarten ($25 million) and transportation for students ($50 million).

Another way to increase schools funding would be to raise property taxes, but Councilman W. Wilson Goode Jr. said "there's absolutely no appetite to raise property taxes."

Also, the city must also decide whether to pick up some shared costs with the district. The district's rebalancing plan counts on the city taking over $11 million related to facilities and social services, among other things. The city has not yet committed to this, said Finance Director Rob Dubow.

Dubow also stressed that under state law any increased funding provided to the district could not be reversed. So if the city provided $53 million in additional tax revenue and took more than $11 million in bills for the coming fiscal year, it actually would be committing to $320 million over the life of the city's five-year financial plan.

"So we're talking about having to do very painful things to keep ourselves in balance," Dubow said.

Further complicating matters is that the state is on track to end the fiscal year with a surplus of as much as $500 million, which some lawmakers would like to see go into the education budget. It's not clear how that will play out.

The district is supposed to pass a budget by May 31. Restoring full-day kindergarten and transportation funding are its top priorities, according to a statement.

Councilman Bill Greenlee said that full-day kindergarten was key.

"All Council people know is, we have to be a part of the help, especially on full-day kindergarten," said Greenlee. "How we're going to get there . . . we're still working on it."

Mayoral spokesman Mark McDonald yesterday declined to talk specifics on the schools budget, saying that Mayor Nutter was waiting to see how the hearings unfolded.

"The mayor has been very concerned about the school district budget, and he's been working steadfastly with the school district for several months on these issues," McDonald said.

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