PPS Preliminary Budget Missing the “I Word”
Pittsburgh Public Schools, like Philadelphia’s and Scranton’s school districts, operates on a calendar year rather than a July-June fiscal year and has released its preliminary budget for 2017. The budget plans on expenditures of $594 million next year and it expects no change in the real estate tax rate of 9.84 mills. In 2017 and future years the District expects to be running an operating deficit but with dipping into reserves still envisions having a fund balance of close to $50 million by 2020.
As we wrote earlier this year in response to an Audit by the Auditor General’s office on the District’s finances, recent years of PPS budgeting projected “insolvency” but kept pushing the date further into the future. Previous budgets forecast a year end fund balance of $17 million at the end of 2018, the most recent year that insolvency was expected to arrive. The prelim budget for 2017 projects a year end balance of $94 million.
In the section titled “Adoption of Annual Budget” the mention of insolvency is gone in 2017. The budget notes “While this forecast is somewhat optimistic, it
is not without some concerns. It didn’t take into effect the addition of 3 charter schools (approved by the State or other Districts) that were not slated to open or were already opened and enrolled PPS students. In addition, as in the past, the District does not know the extent of the possible reduction in Real Estate revenue due to pending appeals.” Basically boilerplate language from 2016’s final budget but with the reference to insolvency removed.