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Chipping away at the deficit

• Last fall, District officials announced they had uncovered a $73 million deficit and implemented a plan of cutbacks, through which about $50 million in net savings was achieved. Cuts included the elimination of 175 central office positions in December 2006.
• In March 2007, District leaders revealed they were facing an even bigger deficit for 2007-08. Including a deficit carryover, the budget gap was projected at more than $180 million for the year ending June 30, 2008.
• District officials presented a deficit reduction plan in April 2007, relying on $82 million in new revenues and about $99 million in expenditure reductions to close that gap.
• By August 2007, the District was close to meeting its revenue goal, anticipating new funds from the city and state totaling more than $77 million. Big components were increased state aid and the passage of a bill to increase the District’s share of city real estate tax revenues by $18 million annually.
• Through another round of cutbacks, the District secured almost $50 million in savings by August – about half the planned expenditure reductions. Big-ticket items were central and regional office staffing reductions, reductions in outside contracts, and two property sales.
• With a gap of $55 million still to be closed, the District entered the school year considering further strategies to reduce expenditures. A dozen recommendations that might reduce the deficit to $20 million included cuts in funding to alternative and disciplinary schools, elimination of about 30 teaching positions in schools where enrollments have dropped, and outsourcing of some administrative functions.
• In September 2007, Mayor Street announced a more aggressive effort to collect delinquent city taxes and predicted it could generate $42 million for the District in the 2007-08 fiscal year. District officials were weighing what amount can be budgeted as gap-closing revenue.