Long-term financial planning urged for Philly school district

    As Mayor Michael Nutter and Philadelphia City Council members work against the clock to determine what, if anything, the city can do to help the city school district with a $629 million deficit, some wonder whether officials should have seen this crisis coming sooner.

    When Philadelphia’s finances collapsed 21 years ago, the rescue plan lawmakers crafted included a major change. Forever more, the city would have to prepare not just an annual budget, but a five-year financial plan that would be reviewed by an independent oversight board.

    As the school district suddenly faces a shortfall of about one-fifth of its budget, some wonder why the district doesn’t do the same thing. Among them are City Councilman Bill Green and Helen Gym, a co-founder of Parents United for Public Education.

    “Last year, the school district approved a budget that spent down its entire surplus,” Gym said in an interview. “That right there should have been a clear indication that the district was not thinking sensibly about an impending crisis.”

    Gym told City Council in testimony last month the school district should have to follow the same budget-planning rules as the city, and report to the state oversight board. Nutter is now demanding that the district commit to five-year plans if it wants more help from the city.

    School CFO: City approach won’t work for district

    Mike Masch, the school district’s chief financial officer, prepared five-year plans as a city budget director in the 1990s. He says the school district is different.

    “We have no independent ability to raise any revenue, and we have no multi-year commitment on the part of any of our sponsoring governments to a specific level of funding,” Masch said. “So it makes multi-year planning here more difficult than any other governmental entity that I’ve every worked in.”

    Masch didn’t say the district can’t do long-term planning. But he did say a five-year plan that didn’t count on more money from other governments would force the district to cut programs every year as costs grow.

    “Anything other than that would require us to make assumptions about what elected officials who operate independently of us are going to do,” Masch said. “And given election cycles, in some cases we wouldn’t even know who some of those officials are going to be.”

    Despite those reservations, the district said in a statement Monday it would provide the information Nutter is requesting. Among his demands is a commitment to long-term planning.

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