No more middle school. Goodbye freshman and J.V. sports. Close a school; slash the music programs.

The blade was about to fall this month on all this and more at the Quakertown Community School District. But at the last minute, something extraordinary happened: Teachers and other employees agreed to $700,000 worth of contract concessions to blunt the ax.

Those givebacks - highly unusual in the often rancorous world of union-administration relations - speak to a deepening crisis in school finances that is rippling across the country.

As are other districts in Pennsylvania and New Jersey, Quakertown is having its first full encounter with the economic downturn that has been battering businesses and pocketbooks nationwide.

Facing slumping revenue, falling real estate values, and swelling pressure from residents to hold down taxes in an unsettled economic climate, the districts have been at it since the first of the year, in some cases even earlier. The operative tools have been the ax and the vise.

"This year is like no other that I have seen," said Jay Himes, executive director of the Pennsylvania Association of School Business Officials. "There are no good options for developing your budget in this environment."

An upshot is that the property-tax increases that will go into effect tomorrow will be the lowest on average in at least five years for districts in Bucks, Chester, Delaware, and Montgomery Counties. Several are keeping rates the same or cutting them.

Philadelphia schools might fare better than their suburban counterparts, since the bulk of their funding comes from state and federal sources. Dozens of new initiatives would be paid for in large part by federal stimulus dollars.

But in the suburbs, where local taxes pay most of the bills, districts are cutting staffs, programs, and extracurricular activities, and some are wondering whether the savings to taxpayers is worth the potential cost to children.

Taxpayers are stressed, too. Haycock Township resident Helen Kondracki, a retiree, told the Quakertown board at a June meeting that the district could not afford all the things parents want for their children. She added: "Speaking of the ability to pay, 32 percent of my income goes to pay taxes. I'm maxed out."

School boards are paying attention. In the next fiscal year, only 13 area districts' tax increases will go above the state's legal inflation caps. Last year, 23 districts went over it.

Final budget figures aren't yet available for New Jersey, home of some of the highest property taxes - and some of the most frustrated taxpayers - in the nation, but the circumstances aren't much different.

"We're all in the same boat," said John F. Donahue, executive director of the New Jersey Association of School Business Officials. The Cherry Hill district, for example, is cutting more than 60 jobs.

On both sides of the river, falling real estate values have been a major concern.

In Pennsylvania, many districts - especially those in Bucks County - are looking at multimillion-dollar declines in tax revenue, after years of steady growth in real estate, income, and other tax revenues in an era when property values and incomes increased steadily.

As school officials began to build their spending plans against such bleak conditions, they were faced with having to make sweeping cuts. At least four Bucks districts - Neshaminy, Pennsbury, Quakertown, and Central Bucks - reduced staffing by 40 or more, mostly by not filling open slots, but with some layoffs. Support staff was hit the hardest, but some teachers and administrators were also eliminated.

In three districts, sharper cuts or higher taxes were avoided when teachers agreed to renegotiate existing contracts. Along with those in Quakertown, teachers in Council Rock in Bucks County and Twin Valley in Chester County reduced or deferred wage increases and changed benefits. Pennsbury teachers extended their contract a year, with no new wage increases. School administrators in several districts also took wage cuts.

"We want to maintain the educational excellence; we want to maintain the program and staff - that's everyone's first priority," said Mariann McKee, the president of the Council Rock Educational Association. The concessions, she said, send the message that "teachers are reasonable. Teachers are responsive to the needs of their community."

At least six districts - Bensalem, Central Bucks, Coatesville, Council Rock, Pennsbury, and West Chester - took $2 million or more each from their "savings accounts," putting money from the prior year's fund balance into their budgets to keep from raising taxes or cutting programs even more.

Not all districts are in financial stress.

Some of the area's poorer ones - such as Delaware County's Upper Darby and William Penn - have already made substantial cuts in recent years and were not counting on sizable local revenue increases, so they were not hit as hard by the downturn. Less-wealthy districts are also slated to get more federal stimulus money this year in an effort to stave off cuts.

At the other end of the spectrum, some prosperous districts have been able to weather the recession without making significant academic changes.

The cuts by the West Chester Area School District, for example, included only items such as reducing legal fees, ending staff travel to "nice but not needed" meetings, and deferring some textbook orders, said spokesman Rob Partridge.

Students and staff were also enlisted in an energy-savings effort that cut one high school's electric bill about 22 percent.

Even with the cuts, the district's tax increase was the third-highest in the region, partly due to school-construction debt. The school board also ratified a two-year teachers contract this spring, with 4.3 percent wage increases.

In many other places, however, the cuts have been deep. Faced with a $4 million revenue shortfall, the Neshaminy district is cutting at least 65 jobs, close to half of them teachers.

"There will be minimal dollars to do things other than what is legally required," district business administrator Joseph Paradise told the school board earlier this year. Music, art, the academic-enrichment program, physical education, prekindergarten and kindergarten, and languages will all experience some cuts.

In Pennsbury, about 40 jobs will be lost. Late buses for students staying after school for sports and other activities were eliminated, as were district-funded field trips. A sophomore community-service program was suspended, as was a program that allowed some students to work part time while attending school. Some textbook purchases were deferred.

Even with the concessions from teachers, the Quakertown district ended up with a budget that eliminated 41 positions next year, 13 of them teachers.

World-language and physical-education offerings were cut; recommended computer upgrades won't take place. Even the smallest trims were made: The school band won't be allowed to travel to away football games, at a savings of $3,880 in a budget of more than $81 million, and bottled-water coolers will be removed where tap water is available, saving an additional $1,500.

The budget left some parents disturbed by the erosion of financial support for extracurricular activities. "What worries me is where we stop," said Milford Township resident Karen Quinn, the mother of two students in the district. "I never expected that they would make choices to damage programs like music, which we are pretty well-known for. Music has been hit enough; sports have been cut enough. Extracurriculars keep kids happy, connected, and with positive role models - that's what were taken away. It's becoming all about the grade and the test."

In Delaware County's Marple Newtown School District, though spending increased only a small amount from last year, the district had a revenue shortfall of about $1 million, and there were some unexpected building repairs. That added up to the need for cuts.

Those included dropping the district's elementary-school foreign-language program; no more district payments to the College Board for students taking advanced-placement tests, which were $86 per test this year; no more district contribution to the Ice Hockey Club; and eliminating the faculty advisers to the high school and middle school newspapers, which might not be able to stay in operation as a result.

Also, middle and high school students will be charged an activity fee proposed at $75 for sports and nonacademic extracurricular activities. No student would have to pay more than once, and the tentative family limit is $150.

The budget drew fire from some parents at a board meeting last week. "I think there are a lot of people who would gladly pay more taxes in order to have better schools," Broomall resident Michelle Montgomery, the mother of two district students, told the board. "The long-term value of our homes and our neighborhood and community is not dependent on low taxes. It's dependent on good schools."

David McGinley, school board president, was unapologetic. "We have an obligation to the entire community," he said in an interview. "Go talk to some of the citizens who are ready to lose their homes, and you'll see the dilemma we're in. . . . People don't realize how well they have it - it could be a lot worse next year."

Contact staff writer Dan Hardy
at 610-627-2649 or at dhardy@phillynews.com.
Inquirer staff writer Max Stendahl contributed to this article.