Three things to know about Philadelphia’s school budget: Debt, pensions and safety

The School District of Philadelphia has a budget of $3.1 billion this year. Where is the money going?
Part 41 of 43 in the series Educating America

The School District of Philadelphia has a budget of $3.1 billion this year. Where is the money going?

By Maura Pennington |

PHILADELPHIA — State, local and even federal taxpayers are keeping the School District of Philadelphia operational, but the funding crisis seems to deepen with each passing year.

The district adopted a $3.1-billion budget for 2013-2014, but revenue falls short of costs by $304 million. The School Reform Commission, which has run the district for more than a decade, holds broad authority to make cuts. Yet classroom spending is only one issue affecting students in the city.

The district is the state’s largest. It includes more than 10 percent of all public school students in the state and this year received more than 20 percent of all state education subsidy dollars.

Philadelphia is home to more than half of the schools on the state Department of Education‘s list of “failing schools.” The schools on the list represent the lowest 5 percent in student achievement as measured by state standardized tests.

No matter how you slice it, the problems in Philadelphia’s schools, sooner or later, will affect all taxpayers in the state.

Here are three things to know about the Philadelphia school district budget:

1. The district spends more to pay down its debt than it does to fund transportation, food services and utilities in its school buildings.

District Budget Pie

Only about 45 cents of every dollar goes directly to student instruction in district schools. Another 24 cents of each dollar goes to educating students in charter schools or institutional placements.

After instructional costs, the district’s biggest expense is $264 million in debt service payments.

That’s enough money to hire 2,400 teachers, with an average salary of $67,000 and an average benefits package worth $40,000 each.

The debt service payments could cover the entire cost of transportation (about $92 million this year) and the entire cost of utilities ($65 million) with enough left over for the district’s food budget, too ($82 million).

Even after paying for all that, the district would have another $25 million at its disposal.

Philly Debt (2)

With the school district’s bonds now are rated near junk status, more borrowing by the district is unlikely. But the city of Philadelphia may have to take on more of the burden. This year, the city borrowed $50 million to ensure the district could open its doors in September.

Moody’s rated that move as a positive step for the district, but noted that borrowing to fund the school district would be a credit negative for the city if it became part of a pattern.

2. By far, the largest driver of costs in the district is personnel. Ninety percent of the money spent on instruction goes to salaries and benefits.

The average high school teacher is paid more than $100,000, including benefits. The superintendent’s salary is $300,000 with a deputy superintendent pulling in $210,000. Next year, there could be a food services menu Sspecialist at a requested salary of almost $62,000.

The district has been seeking $133 million in concessions from its labor union partners as a necessary measure to close the deficit, but the unions aren’t budging.

Directly connected to the personnel costs is the long-term pension liability of the school district.

Retirement Costs

A study of the district’s pension obligations indicates the total cost of retiree payments will climb from $73 million this year to $349 million by 2020.

On a per-pupil basis, that works out to $900 per pupil in the district for 2011, growing to $2,300 per pupil by 2020.

3. The district spends $30 million on 400 school police officers and $14.9 million on about 110 psychologists.

A lot more goes on in Philadelphia schools than teaching and learning. In 2011-2012, there were over 2,300 reported assaults on staff and students. There were also 15 reported rapes.

Though there is no doubt the violence that plagues some of the city’s schools has causes and consequences that go beyond the classroom, the district has an obligation to make every school as safe as possible, and that costs a lot of money.

Difficult learning environments also have an impact on student performance. Aside from violence, poverty takes a toll.

According to this year’s Trial Urban District Assessment compiled by the National Assessment of Educational Progress, or “The Nation’s Report Card,” there is a noticeable achievement gap between children who are eligible for free lunch programs and those who aren’t.

On the eighth grade reading test, students from low income families in Philadelphia scored on average 26 points lower than their more affluent peers.

Contact Maura Pennington at and follow her on Twitter @whatsthefracas.

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