Philadelphia Targets Tax Cheats to Make Up School Funds

Philadelphia School District faces a $186 million shortfall for the 2012-2013 budget year. This shortfall is assuming they manage the $26 million cut in spending they have to find by June, but are unlikely to have to make further cuts to their own budget after officials at a School Reform Commission announced plans to make up the deficit with more aggressive city tax collections.

Presenting a preliminary $2.5 billion spending plan at Thursday night's marathon School Reform Commission meeting, officials said that schools should have no further cuts to their budgets and that they did not plan to lay off teachers.

The SRC has powers given by the state to close the gap by imposing term on its labor unions. Chief recovery officer Thomas Knudsen has said that is unlikely to be necessary this year, although he did caution that cuts would need to be made next year and that talks with the unions had already begun to achieve this end.

The 2013 budget has revenue of $2.358 billion, but expenses of $2.547 billion. But it's only a first draft and will be debated and likely adjusted before final approval, which must happen by May 31.

The district is coming off a brutal year in which officials had to slash spending by more than $600 million, with some cuts made midyear and $26 million still left to cut. SRC Chairman Pedro Ramos told City Council this week that "bad fiscal policy" – not just a drop in state and federal aid, as officials had maintained for months – was to blame for the district's fiscal woes.

The chair of the SRC's finance committee, Feather Houstoun, has said that reorganization measures will eventually save $90 million a year, however this money won't show up fully until 2014, and in the meantime the relatively small gap should be easily closeable by simply pursuing tax delinquents.

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