Facing a grim budget, Philadelphia School District may need to lay off employees

In the face of a grim and changing budget picture, Philadelphia School District officials said Thursday they may need to lay off or furlough employees this school year to close a deficit caused by COVID-19.

The school system has been hit hard by lower-than-expected city revenues and increased costs related to preparing schools — which have been closed to students since March because of the pandemic — for an eventual reopening. Layoffs or furloughs could be necessary by January, Chief Financial Officer Uri Monson told school board members, though numbers are in flux.

To date, the district has identified a $57 million budget gap and identified $46 million in savings. It’s unclear how the school system will come up with the remaining $11 million, Monson said. The district will explore reducing contracted services, and costs may go down depending on how long schools remain closed — the school system has seen some savings in transportation and substitute services based on the current virtual setup — and officials hope to avoid job cuts.

But “it has to be on the list at this point,” Monson told the board during a committee meeting Thursday.

The district employs more than 20,000 people, including about 8,500 teachers. It has just under 120,000 students and its budget for fiscal year 2020-21 is $3.4 billion.

It has already instituted a central office hiring freeze and stopped hiring supplemental teachers, but it has spent tens of millions to ready schools to educate students in the pandemic. It has also lost significant revenue from lower-than-usual liquor by the drink and use and occupancy tax collections, also down because of the pandemic.

» READ MORE: Schools with coronavirus cases could be forced to close on short notice under new Pa. rules

Philadelphia’s school system is the only one in the state that lacks revenue-raising authority. The school board depends on City Council and the Pennsylvania legislature for the vast majority of its funds.

Superintendent William R. Hite Jr. shared the bad financial news with district staff in an email, saying job cuts and furloughs will only be considered “once all other options have been exhausted.”

“There are some difficult decisions ahead,” Hite wrote. “Our commitment to you is that we will thoughtfully make them as we strive to minimize the impact to our schools and staff.”

Monica Lewis, district spokesperson, said it was too soon to identify which groups of employees might be considered for job reductions or furloughs and when exactly such actions could come if they are necessary.

» READ MORE: 18,000 Philly school families still lack reliable internet; board hears of coming financial pain

“Things change very quickly, all the time, and that’s been the name of the game when it comes to COVID-19 in general,” Lewis said. “The last thing we want to do is reduce staff or furlough. Whatever options help to get to where we need to be without doing so are the ones that we’re going to look at first and foremost.”

The district’s long-term budget picture is no better; it was projecting a $700 million, five-year deficit in May, and those numbers have likely worsened.

One school board member suggested the district will need to consider school closures in the coming years to keep the district financially viable.

» Here are Philly’s current COVID-19 guidelines: inquirer.com/phillyguidelines