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Amid COVID-19 Downturn, City School District Anticipates Steep Financial Hit

Sarah Schneider
90.5 WESA

Pittsburgh Public Schools anticipates budget shortfalls ranging from $17 to $82 million, as the COVID-19 pandemic has dealt a blow to district revenue collections.

Chief Financial Officer Ron Joseph presented four scenarios to the school board Tuesday during a business and finance committee meeting. The scenarios assume lost property, earned income and realty transfer tax revenues. Joseph’s projections anticipate a $55 million loss in earned income tax revenue compared to 2019.

The Pennsylvania Association of School Business Officials projects a $1.04 billion – or almost 5 percent – statewide decline in local revenue for all school districts.

The scenarios did not include reductions in state and federal school funding, though Joseph told the board that funding is also likely to be reduced, though he is unsure of the impact.

The worst case scenario predicts that the district would have no money left in its fund balance by the end of 2020.

“If this was the case we would likely not be able to make it through the year in terms of operations,” Joseph said.

The “optimistic” scenario puts the district in a slightly worse financial situation than it anticipated before the pandemic.

The board approved a $665 million 2020 budget with a $25 million operating deficit as board members disagreed on how much it should increase real estate taxes to make up for gaps in the budget. District administrators had asked the board to increase taxes by 2.3 percent. The board ultimately increased it by 1.2 percent, or an additional $12 each year on $100,000 of assessed property.

Pittsburgh Public Schools was told by the state that it would be allotted $11 million from the federal CARES Act, the coronavirus relief bill approved by Congress in March--though Joseph told the board that the number would be lower because the district has to pay non-public schools that educate City of Pittsburgh students. Joseph said the state department of education was clarifying a language discrepancy with the federal department of education that would significantly change how much money those schools receive.

To date, the city school district has spent $2.6 million on additional costs associated with the pandemic. Not all 23,000 students have access to computers or the internet. The district has spent nearly $1.5 million to purchase 5,000 laptops. It has also spent $624,000 to print instructional packets that families pick up at local schools. The district is still paying staff and cleaning schools. Joseph said the district is not saving money with buildings closed.

Governor Tom Wolf ordered school buildings to remain closed through the end of the year. Wolf also approved Act 13 which places financial constraints on school districts including them to require districts to pay employees and charter school tuition.

Sarah Schneider is WESA's education reporter. From early learning to higher education, Sarah is interested in students and educators working to create more equitable systems. Sarah previously worked with news outlets in Pennsylvania, Illinois and Idaho. She is a graduate of Southern Illinois University Carbondale where she worked for the school newspaper, the Daily Egyptian.