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The Incredible Shrinking D.C. Surplus

So just how much cash does the District of Columbia's school system actually have? Good question, and there's a big interagency fight here in town going on to get to the bottom of it.

You may remember that last year that the district's school system cited a huge budget deficit to justify the layoffs of over 260 educators. The Washington Teachers' Union claimed that the deficit was being contrived by the district, but lost a court case arguing to have those teachers reinstated.

Then, Chancellor Michelle Rhee stunned the D.C. council this week—and incensed the union—by saying that preliminary budget figures from show a $34 million surplus to help fund the performance-pay program in the district's tentative bargaining pact. The WTU took the surplus as further evidence that Rhee contrived the budget cuts, and it is planning to reopen its suit against the district.

Except that there's a new wrinkle: The $34 million surplus doesn't really exist, says D.C.'s chief financial officer, because of overspending in the district's central office. He and Rhee are now engaged in a war of words over the situation.

Clearly, the disappearance of the supposed surplus complicates the WTU's claims that Rhee's been cooking the books in order to force layoffs. But it also seems to jeopardize the public-private funding scheme for the performance-pay program in the tentative contract. After all, if two D.C. agencies can't seem to figure out the state of the district's finances, one can hardly fault folks for wondering if performance-based salary increases will be sustainable.

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