Pittsburgh Public Schools is gearing up for a 12th consecutive year without a tax increase.
The district's budget forecast, which was released Monday night, shows the deficit for calendar 2012 is substantially below projections, but the deficit problem will worsen by 2014.
"We've probably run most of the whole course in terms of using traditional methods to reduce their spending," school superintendent Linda Lane said, noting the school board already closed schools and reduced staff.
While there may be some traditional savings yet to be realized, Ms. Lane said the district is going to need to look for more creative and innovative ways to educate students.
She noted the district this fall began a full-time online academy that has attracted more than 60 students and is looking at ways blended learning -- a combination of online and in-person learning -- could be used in the district's schools.
Another possibility is raising money by selling services, such as professional development.
The school board is planning to set the millage rate and approve the budget at its Dec. 19 meeting. Unlike most school districts in the state, Pittsburgh operates on a calendar budget year.
Exactly what the millage rate will be depends on whether the controversial new property assessment values go into effect. As it stands, the county is required to certify the values by Dec. 17. Those whose property values go up significantly more than the average may find their own taxes go up although the district as a whole won't be getting more tax money.
Whatever property values take effect, Lisa Fischetti, district chief of staff, said, "The point for Pittsburgh Public Schools is we're not going to have any revenue windfall."
At this point, the proposed 2013 budget is $516.6 million, a 2.5 percent decrease from the adopted 2012 budget. In addition to no tax increase, the proposal assumes a stable workforce and no additional school closings.
When the 2012 budget was adopted last December, the district forecast a $21.71 million deficit in 2012 even after a variety of cuts, including central office positions and teachers, were estimated to save about $40 million over a school year.
Many of the cuts didn't take place until the second half of the year, so there was not a full year's savings in 2012, but there will be in 2013.
Now the forecast calls for a deficit of $7.71 million in 2012 and $4.66 million in 2013. Part of the difference is another round of $8 million reductions, including cuts in middle school sports, some central office positions and transportation efficiencies.
In addition this year, the district is spending $10.4 million less in general than it expected.
Those savings include spending $3 million less in contracted services than budgeted, $2.8 million less in utilities because gas prices stayed stable instead of rising, $1.3 million less in equipment because of fewer purchases and $1.2 million less in debt service because of refinancing.
But the district this year is spending $3.2 million more on charter schools and $1.74 million more in salaries and benefits than projected.
Once the district is through 2012 and 2013, however, the deficit is expected to grow substantially, from $22.45 million in 2014 to $34.18 million in 2015 to $43.63 million in 2016.
To fill the gap created by the deficit, the district dips into its fund balance. However, in 2015, it is expected that the district would have to go so deep into the fund balance that it would not have a 5 percent reserve left. By 2016, the deficit will be bigger than the reserve.
Part of the issue is rising costs, including increases in salaries, pension contributions, health care, transportation and utilities.
Along with the general fund budget, the school board also will be considering a capital budget of $13.9 million in 2013. The 2012 capital budget was $13.4 million.
Significant capital projects planned in 2013 and 2014 include chemistry lab renovation at Pittsburgh Allderdice High School in Squirrel Hill; elevator installations at Beechwood PreK-5 in Beechview, Linden K-5 in Point Breeze and Whittier K-5 on Mount Washington; and window replacement at Obama 6-12.
Education writer Eleanor Chute: email@example.com or 412-263-1955.