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District Prepares for Significant Declines in Local Revenue Due to COVID-19
PITTSBURGH May 12, 2020 – As taxpayers across the city find themselves out of work due to COVID-19, the District projects a loss of up to $82 million in local revenue. The approved 2020 General Fund Budget of $665.6 million included an operating deficit of $25.1 million. The potential loss in revenue, coupled with increases in expenditures, will widen the deficit and likely cause the District to fall out of compliance with the Board’s minimum five percent Fund Balance requirement by year’s end. The District presented multiple scenarios of the effects of COVID-19 on its financial picture as part of tonight’s Business and Finance Committee Meeting.
“Just as school districts across the country, we are experiencing reductions in local revenue, while also bearing the additional costs to support the transition to remote learning,” said Superintendent Anthony Hamlet, Ed.D. “As we do not know the effect COVID-19 will have on state and federal budgets, it is too soon to tell the full fiscal impact on the District. As we balance the need to ensure all students can fully participate in remote learning, we will need to continue our work to Imagine PPS and design an educational delivery model that aligns with our values while also considering the structural needs of the District.”
Act 13 of 2020, places certain financial constraints on school districts, including requiring districts to pay employees full compensation and charter school tuition. To date, the District has incurred more than $2.6 million in additional costs to support remote learning, such as 5,000 laptops, Wi-Fi hotspots, the printing of instructional packets and extra COVID-19 pay.
While several factors remain unknown related to the impacts of COVID-19, this evening, the District shared four potential revenue scenarios ranging from $17 million - $82 million declines in revenue. The scenarios were developed based on the District’s revenue trends as of April 30 and state revenue shortfalls as projected by the Pennsylvania Association of School Business Officials (PASBO).
View the full 2020 Mid-Year Budget Update.