Pittsburgh Public Schools brace for up to $82 million in revenue losses

Pittsburgh Public Schools have spent more than $2.6 million because of the covid-19 pandemic and the district is projecting a loss of as much as $82 million in revenue this year.

“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,” Superintendent Anthony Hamlet said in a statement.

The district’s 2020 budget of $665.6 million already included a deficit of about $25 million. The losses in revenue will likely cause the district to fail to meet its self-imposed reserve goal of 5% of its budget by the end of the year, officials said.

At a Tuesday meeting of the school board’s Business and Finance Committee, administrators laid out several scenarios to describe what it could be facing and projected it could lose at little as $17 million and as much as $82 million in tax revenue because of the pandemic.

“We are experiencing reductions in local revenue, while also bearing the additional costs to support the transition to remote learning,” Hamlet said.

On Wednesday, the state announced the district’s share of emergency cash made available by a federal pandemic relief measure was $11.1 million.

The money is a one-time infusion to help school districts deal with the pandemic, state officials said in a news release.

The district already has spent more than $2.6 million on remote instructional materials, internet hot spots, laptops and pay for employees who weren’t working because of the statewide shutdown.

By state law, districts are required to pay employees their full salaries and also to continue to pay charter school tuition, the district said.

The “optimistic” projection of a $17 million loss in revenue assumes a 2% reduction in property tax collection, no change in wage taxes or state and federal funding, according to the district.

The worst-case scenario of an $82 million decline projects a 7% reduction in property tax collections, and a 38% reduction in wage taxes.

The worst-case scenario would completely deplete the district’s financial reserves.

The district ended 2019 with reserves of $88 million. Of that, all but $28.6 million was budgeted for spending, meaning the district wasn’t in compliance with the school board-imposed policy of keeping reserves of 5% in its coffers, which in 2019 would have required reserves of $32.1 million.

This year the district budgeted ending the year with $33.2 million in reserves, which would have met the 5% requirement.

Even under the “optimistic” scenario, the district won’t be in compliance and it could be facing a deficit under the worst-case scenario.

The 2020 budget included a 1.1% property tax hike, the first in five years. But the increase was half what the district needed to balance its budget without dipping into reserves.