About 10 years ago, Pittsburgh Public Schools had a fund balance approaching $100 million.
Now -- despite closing more than 30 schools, eliminating hundreds of jobs and increasing class sizes -- officials have forecast the district will be broke in 2015 unless it finds a way to further cut costs or increase revenues.
The district, which operates on a calendar year, today is expected to release its proposed preliminary general fund budget for 2013 of $521 million, a decrease of 1.5 percent from the 2012 budget but not enough to stave off yet another deficit.
The proposal, which was previewed last week, would hold the line on taxes for the 12th consecutive year. It assumes flat basic education funding, flat revenue from real estate and earned income taxes, stable enrollment and no additional school closings.
The school board is expected to vote on it Dec. 19.
The district so far has kept taxes steady despite the fact that it has lost more than $12 million a year since 2007 -- a total of $77.1 million -- because the state shifted part of the earned income tax that had gone to the school district to the city to help relieve its financial problems.
Also, in 2007, the district began losing $4 million a year it formerly received from the city's Regional Asset District to replace the mercantile tax.
To save money over the years, the school board has closed schools and reduced the number of employees as enrollment dropped.
Enrollment has dropped from 34,619 in 2003 to 24,849 this fall, a decrease of 28 percent.
In 2003, the district operated 93 schools. This school year, there are 54 schools.
Also in 2003, there were 5,527 employees paid through the general fund budget. In 2011, there were 4,231, a decrease of 23 percent. Now, following what is believed to be the largest layoffs in the district's history, there are 3,741 employees paid for by all funds.
Officials estimate the district will finish 2012 with an operating deficit of $6.39 million, lower than the projected $21.71 million because of additional cuts made during the year.
That would leave a fund balance of $72.4 million to start the new year.
At the current pace, that's only enough money to cover the forecast deficits until 2015. The district's forecast calls for an operating deficit of $9.86 million in 2013, $29.93 million in 2014, $42.78 million in 2015 and $52.95 million in 2016.
That contrasts with the district's fund balance of $98.2 million in 2003, $45.5 million of which was designated to help pay the 2004 expenses.
Superintendent Linda Lane has said that more cost savings will be needed, but the district will have to think creatively because she doesn't think there are enough traditional cuts left to solve the problem.
Nor is she expecting an inflow of additional money from the state.
In recent years, Pittsburgh has been the recipient of major grants -- including $40 million from the Bill and Melinda Gates Foundation and $39.5 million in a federal Teacher Incentive Fund grant -- aimed at the district's Empowering Effective Teachers initiative.
In future years, an increasing portion of the annual costs will need to be shouldered by the district's general fund if the initiative continues as planned.
While the district budgeted $2.3 million for the initiative in 2012, the amount needed from the general fund grows to $6 million in 2013, $9.8 million in 2014 and $10.6 million in each of 2015 and 2016.
From June 2011 through July 2012, the board cut the budget by nearly $50 million, which resulted in furloughing about 300 employees, closing seven schools, increasing class sizes and renegotiating transportation contracts. Nearly 500 positions were eliminated, some by attrition.
Still, it is hard to get ahead.
While the district was trimming nearly $50 million, it lost $37.8 million in state and federal money as the federal economic stimulus ended, the state shifted federal EduJobs money away to its general fund and the state eliminated charter school reimbursements.
Officials figure the district doesn't have much control over nearly half of its expenditures.
It has no say over how many city residents choose charter schools, but state law requires it to pay for each student. In 2013, the charter school bill is expected to reach $52.7 million, nearly five times the cost of a decade ago.
In 2003, the charter school cost was $11.4 million, and the state reimbursed the district for $2.5 million.
The state no longer provides charter school reimbursements to districts. That amounts to a loss of about $14.8 million in 2013.
In 2003, 1,377 city residents attended charter schools, but this school year there are 3,414 city residents in charter schools.
The district also counts debt service also as an area of less control, although it has controlled it some by making fewer capital improvements.
The 2013 proposed budget includes $56.4 million in debt service on a total debt of $418 million in 2013.
Much of that debt was incurred for renovations that were made several years ago at Pittsburgh Westinghouse and Carrick high schools as well as Pittsburgh Greenfield, Lincoln, Roosevelt, Spring Hill and Weil elementary schools. It also includes costs for two new buildings, Pittsburgh High School for the Creative and Performing Arts, which opened in 2003, and Pittsburgh Faison elementary, which opened in 2004.
The district continues to keep its capital budget lower than in earlier years; the proposed 2013 capital budget previewed last week is $14.1 million.
Pittsburgh, like school districts across the state, also faces steeply increasing pension contributions to the Pennsylvania School Employees Retirement System. The district budgeted $5.3 million for this in 2003, but the preview allotted $28.6 million in 2013.
Eleanor Chute: firstname.lastname@example.org or 412-263-1955.