The Philadelphia school district is in line to get more than $400 million from the coronavirus relief legislation passed by Congress — but that doesn’t mean the system’s fiscal woes are over, Chief Financial Officer Uri Monson said Tuesday.
The money “buys us 18 months for the local economy to recover and for things to normalize,” he said. It will also let the board of education focus on its goals for improving student achievement rather than worrying about plugging budget holes.
“It’s not a moment we suddenly sit back and say, ‘Great, now we have nothing to worry about’” regarding funding, he said. “This is one-time money, so we can’t paper over structural issues.”
The $900 billion federal relief package allocates about $57 billion to K-12 education. Most of that, $54.3 billion, is for public schools, including charters. The money is expected to be allocated based on the formula for the Title I program. Title I is the federal government’s primary program to aid low-income students and districts.
Pennsylvania would be due nearly $2 billion of the education money, and Philadelphia would receive nearly a quarter of that. In the last COVID-19 relief bill, Pennsylvania received about $473 million, of which Philadelphia’s share was more than $100 million. Monson said he doesn’t have an exact figure yet for the latest round of stimulus funding.
The legislation, which runs to more than 5,500 pages, gives districts wide latitude for spending, but homes in on addressing student learning loss, investing in improvements to school facilities to mitigate the spread of the virus, and upgrading technology.
In Philadelphia, the district faces huge challenges with ventilation in aging school buildings. Workers have been analyzing air quality in all the district’s schools, which have an average age of 70 years, and reports show many have alarmingly few classrooms that meet basic standards. This money will help accelerate ongoing improvement efforts, Monson said, while also freeing up funds to address other chronic problems, such as asbestos and lead paint. “We will be able to do more work than planned,” he said.
The school board passed a $3.5 billion budget last May, which showed a small surplus for this year and a predicted $145 million budget gap at the end of 2022. That was before the second surge of the virus and the subsequent loss of more city and state tax revenue.
The budget also didn’t figure in the costs of the new contract agreement with the teachers union and it counted on $35 million from a property tax reassessment, which the city has subsequently abandoned.
Monson told the board earlier this month that the financial picture had worsened considerably, outlining a shortfall $11 million this year and predicting a 2021-22 budget gap of $300 million, more than twice the size of what he forecast in May. In five years, the projected shortfall was over $700 million.
While the federal funds won’t totally wipe out these numbers, they will improve the fiscal picture enough to change the conversation, Monson said. Board president Joyce Wilkerson issued a statement saying that “these one-time funds will be immensely helpful in filling budget gaps for the next 18 months, while the district focuses on long-term structural deficits that challenge our ability to fully support student learning and achievement.”
At its December meeting, the board of education announced its intention to reframe its stewardship of the district around “goals and guardrails” that focus on raising student achievement and promoting equity.
Both publicly and internally, Monson said, questions have been raised how the board could do that while facing such huge gaps between available revenue and student needs. “Now the discussion is how we can reallocate certain resources, where we can put investments for the goals and guardrails,” rather than always searching for how to save money. “We’re starting these conversations already,” he said.
Because the money is not recurring, strategies like hiring more teachers to reduce class size would not be advisable, he said. Addressing learning loss would more likely have to be done through temporary programs, such as tutoring or summer school.
The federal legislation did not include additional money for local and state governments. That’s a problem for Philadelphia schools because, unlike every other district in Pennsylvania, it is entirely dependent on local and state revenue. The board has no taxing power of its own.
After the last recession, Pennsylvania used stimulus money as a replacement for state aid. When it dried up, districts faced huge shortfalls. Philadelphia alone lost more than $250 million, forcing it to lay off all of its nurses and counselors, among other austerity moves, the effects of which linger today.
But the latest bill prevents that from happening by specifying that states cannot reduce state education aid significantly without a federal waiver. Cities, however, have no such restrictions and Monson said he anticipates some pressure on the city to try to cut the funds it allocates to the schools as a way to meet its own needs.
“The city is facing its own challenges,” Monson said. “We won’t know what the city will do until we see the mayor’s budget.”
President-elect Joe Biden called this bill just a “down payment” and has said that he may push for another relief bill after he takes office.