Ackerman asks Council for up to $110 million to help fill budget gap

Superintendent Arlene Ackerman, with district CFO Michael Masch, also asked yesterday to transfer $11 million in school bills to the city. (Alejandro A. Alvarez/Staff)
Superintendent Arlene Ackerman, with district CFO Michael Masch, also asked yesterday to transfer $11 million in school bills to the city. (Alejandro A. Alvarez/Staff)
Posted: May 25, 2011

The financially strapped Philadelphia School District finally made a funding request of City Council and the mayor yesterday - and it was a doozy.

During a public budget hearing, Schools Superintendent Arlene Ackerman asked for $75 million to $110 million in additional funds, as well as the go-ahead to transfer $11 million in district bills to the city tab.

"We did the best we could and we're here asking for help," Ackerman said later in the hearing. She had initially avoided making a numerical request, but after a private meeting with Mayor Nutter and Council leadership during a break in the hearing, Ackerman gave the number range.

The district, which faces a $629 million funding shortfall for the fiscal year that starts July 1, plans a wide range of drastic cuts. But if the city ponies up, Ackerman said, she could preserve full-day kindergarten and transportation services and lay off fewer teachers than planned in order to maintain some small class sizes.

Nutter expressed his support for Ackerman's request but did not offer clear funding ideas, simply saying he'd work with Council and the district to figure it out.

"This is not going to be easy, but it's a problem and a challenge worth fighting for," Nutter said.

There are two key options for the city: shifting more of the existing property-tax revenue to the schools or increasing the property-tax rate to provide more funds. The first option would create a hole in the city budget, and the second would mean residents would be hit with real-estate tax hikes two years in a row.

Most Council members would not commit to either course yesterday.

"It's a very heavy lift," said Councilwoman Marian Tasco. "We have to talk to the Council members and see how we want [to proceed]. We also want to see what the state is going to do."

The city is projected to provide $776 million in tax funding, as well as a $39 million grant to the district for the coming financial year - about 30 percent of the district's $2.8 billion budget. Next year's schools budget is far less than the $3.2 billion budget for the current year, because of a loss in state and federal funding.

The schools must pass a budget by Tuesday, although Chief Financial Officer Michael Masch said they could amend it later.

One issue several Council members raised is that they have little control over funding once it goes to the district. Councilman Darrell Clarke questioned whether there was a way to get a commitment that funds would go to preferred programs - like full-day kindergarten, for example.

"We certainly are interested in working with you on that," Ackerman said.

Another concern for Council is that under state law, any increased funding provided to the district could not be reversed. So an extra $75 million in revenue next year means a commitment of $375 million over the city's five-year financial plan.

"The money has to stay there because by law, we can't take it back," Councilman W. Wilson Goode Jr. said.

Council last year approved a 10 percent overall property-tax increase, with all the additional revenue going to the city portion of the tax, to help ease a city budget gap. Those added funds on the city side mean that the city receives 45 percent of property-tax revenues and the school district gets 55 percent.

Staff writer Jan Ransom contributed to this report.

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