“Our young people will suffer under a devastating bare-bones budget,” Mayor Michael Nutter warned at a press conference last week. “The quality of education in Philadelphia will plummet and we will all suffer as a result: poverty, unemployment, crime, lost wages and lack of personal opportunity.”
Philadelphia, of course, already suffers from all of these maladies. But the School District of Philadelphia’s $304 million deficit, the most recent financial crisis in a district that has eliminated thousands of staff and teacher positions in recent years, threatens to make them all worse. Only “shared sacrifice,” according to Superintendent William Hite, can avert the complete elimination of librarians, extracurricular activities, arts and counselors. The form of that sacrifice: $60 million in new revenue from the city, $120 million from the state and $133 million in labor concessions, mostly from the Philadelphia Federation of Teachers.
The mayor, who has been facing criticism for inaction, now proposes a hike in the liquor-by-the-drink tax from 10 percent to 15 percent and a $2 levy on packs of cigarettes; combined with improved tax collections, he says those measures could bring in an extra $95 million next fiscal year. But public-school activists remain unimpressed: The two sin taxes are considered long shots because they require approval from recalcitrant Harrisburg Republicans, and Nutter has joined the Greater Philadelphia Chamber of Commerce in opposing legislation that would effectively raise the city’s Use and Occupancy tax on larger businesses. “Nutter values his alliance with the business community pretty much above all else,” says Ron Whitehorne, a retired teacher and activist with the Philadelphia Coalition Advocating for Public Schools (PCAPS).
But the current debate over how to balance the district’s books is only the latest skirmish in a complicated, long and often opaque political war over city schools, fought against a backdrop of permanent fiscal crisis — crisis that offers frequent opportunities for leadership with a vision for drastic change. This time around, Hite cites the current deficit as cause to demand not only the $133 million giveback from school staff but also a new contract that ends seniority-based raises and school-placement privileges, and requires longer work days. (He explained to the Inquirer that state politicians view city schools “as a cesspool,” and eliminating seniority can help win their support.) For over a decade now, Philly schools have been warning of increasingly yawning operating deficits — and used that red ink as cover to transfer more control into private hands, which has further compounded the schools’ budgetary woes.
“A school cannot function on the district’s proposal,” says Anissa Weinraub, a teacher at Bartram High School and a member of Teacher Action Group. “And if what they’re doing is just politicking to get concessions — so I can get paid even less for doing even more in a more difficult environment — would that pass in any other profession?”
The conventional image of officials from inept Philadelphia going hat-in-hand to weary accountants in Harrisburg ignores a basic reality: The state has run the school district since 2002, when Gov. Mark Schweiker promised funding in exchange for direct control of Philly schools. That year, the district projected a $115 million two-year deficit. The state takeover established the School Reform Commission (SRC) to oversee the district and turned 45 schools over to private managers, including for-profit educational management organizations, in what the Rand Corporation called “the nation’s largest experiment in the private management of public schools.” But state control and privatization failed to produce achievement, Rand found.
In fact, it exacerbated budget woes, with each new crisis since prompting a fresh effort to reshape schools under pro-charter, anti-union policies.
The next crisis came in October 2006, when Superintendent Paul Vallas, who embraced charter-school expansion, new construction, outsourcing and high-stakes standardized tests during his five-year tenure, announced a new $73.3 million deficit.
Vallas was criticized for spending money the district didn’t have, and he spent $107 million on charters. But Philadelphia superintendents work on a razor’s edge: The district, except for a few years of increased financial support under Gov. Ed Rendell, simply lacks the permanent, stable funding necessary to educate city students.
Instead, the perpetual crisis forces the district to borrow money on the bond market, driving it further into long-term debt. The district will pay $280 million in debt service this fiscal year.
Gov. Tom Corbett’s $860 million cut to basic education statewide, alongside the end of federal stimulus dollars, kicked off the new round of crises in 2011. Philadelphia raised taxes to fund city schools for two consecutive years, but failed to plug a shortfall that is more structural than circumstantial.
“Our fundamental problem is that we have a terrible way of funding public education in Pennsylvania,” says Ron Cowell, a former state legislator and head of the Education Policy and Leadership Center. “It … is excessively dependent on local wealth, and state government has been very stingy about supporting public education. The state’s share ranks us 42nd in the country.”
The crisis simmered, and the district announced a radical restructuring plan to plug a $1.1 billion cumulative five-year deficit in April 2012. It featured the closure of 64 schools and the organization of those that remained open into “achievement networks,” which could be privately managed.
The so-called Blueprint for Transforming Philadelphia’s Public Schools, created by the Boston Consulting Group with funding controversially sourced from the William Penn Foundation and other sometimes-secret entities, drew large protests. And though the achievement network proposal was shelved, major concessions were exacted from blue-collar unions and, in March, the SRC voted to close 23 city schools.
Mark Gleason, who heads the Philadelphia School Partnership (PSP), singles out “the use of stimulus funds to cover recurring operating expenses” in explaining the budget crunch.
PSP, which includes pro-voucher conservatives on its board and supported this year’s school closures, has become a lightning rod for critics since its founding in 2010. The private group is an increasingly powerful decision maker on education policy in the city. Nutter is a supporter, and has accused PSP’s critics of engaging in “esoteric debates that ultimately don’t mean anything to these young people.”
[Editor’s note: On Wednesday, the National Council on Teacher Quality (NTCQ) released a report, funded in part by PSP, criticizing the current teachers’ contract. The report took issue with seniority protections and called for merit pay, which typically means basing teacher compensation in part on student test scores, among other proposals. NTCQ’s board includes and has included prominent self-described reformers, including former D.C. Chancellor Michelle Rhee, Teach for America founder Wendy Kopp, and former New York City Schools Chancellor Joel Klein.]
This year, Hite revealed the $304 million gap just weeks after the school closings became official. For the first time, however, the district announced a moratorium on the expansion of charters, which cost an estimated $7,000 for each child who enrolls. The additional 15,000 seats charters sought would have cost $500 million over five years.
Charter advocates, who have sued the district over enrollment caps in the past, reacted with notable calm, perhaps because Deputy Superintendent Paul Kihn noted they do not “anticipate being in this situation forever.”
At last week’s press conference, state Sen. Anthony Williams, a lead charter and school voucher supporter, praised Hite for his commitment to “supporting high-achieving seats,” using a phrase popular in pro-charter circles. It is also popular in the Nutter administration, which sits on the Great Schools Compact, an entity facilitated by PSP and funded by the Gates Foundation with a mission to expand “high-quality options and to dramatically reduce the number of chronically underperforming schools.”
Last Friday, thousands of to demand fair funding, shutting down Broad Street in the largest student protest since the state takeover. But for Williams, also a frontrunner in the 2015 mayoral race, the school’s problems are the city’s own. “We’re not asking for a tax increase from the state,” Williams said. “We’re actually asking, frankly, to solve our own problems a lot more aggressively than we have in the past.”
Philly’s problem is a big one: It is, in short, having to educate a vast share of the state’s poor and high-needs children without sufficient assistance.
“Philadelphia, like most big urban school districts, has long depended on state and federal funding, both of which are subject to the vagaries of partisan politics, anti-urban sentiment and austerity,” says Penn urban historian Tom Sugrue, who traces the roots of the schools’ crisis to the federally subsidized flight of businesses and the well-to-do to the suburbs. “Essentially, our education policy amounts to segregating minority and high-poverty students in struggling school districts, starving school budgets, experimenting in various untested forms of school governance and then blaming teachers and students when the schools fail.”
Each year, local politicians respond to the ongoing crisis by proposing short-term measures that fail to deal with long-term problems.
“The reality is, without a significant contribution from the state, whatever we can do on the local level is not going to fix the problem,” says City Council President Darrell Clarke.
Pennsylvania Education Department spokesperson Tim Eller contends that “the school district has lost money … at the federal level, something Gov. Corbett has no control over.” He highlights Corbett’s proposal to restore statewide funding by $90 million this year, or 10 percent of what disappeared in 2011. He called it “a significant investment.”
But schools are struggling statewide, including nearby suburban districts. Philadelphia suburbs have received $37 million less this year than they did before the budget cuts, according to a report from Public Citizens for Children and Youth (PCCY). Most districts in Delaware, Chester, Montgomery and Bucks counties have raised taxes for two years straight as a result. “We are going out to school board meetings, and we are hearing dire complaints like we’re hearing in Philadelphia,” says PCCY executive director Donna Cooper, formerly Secretary of Policy and Planning under Rendell and the founder of Good Schools Pennsylvania. “The more the state moves away from carrying its appropriate share of school funding, the more it rolls the tax burden down the hill to the poorest communities.”
Yet there’s been no statewide movement to demand that funding. “You have a governor with the lowest rating ever,” says Councilwoman Maria Quiñones-Sánchez. “And we can’t figure out how we capitalize on that? That’s a strategy problem.”
Activists criticize Nutter, who controls two of five SRC seats, for not speaking out loudly enough for state funding. That may be pragmatic: Corbett and Republicans in the legislature have little interest in raising taxes to fund education — and particularly, the argument goes, in Philadelphia. And it doesn’t help that the Philadelphia delegation’s power in Harrisburg is at a historic low, thanks to Republican Party electoral success and criminal convictions of influential Philly politicians. But the failure to build statewide coalitions may have ultimately closed the door on the political opportunity to pressure a historically unpopular governor who is up for re-election in 2014.
Nutter has also caught flak for supporting controversial restructuring efforts. In 2012, he called the district Blueprint “stark but realistic,” and told critics to “grow up and deal with” it — though he said little else after major protests erupted. And Nutter has, as president of the U.S. Conference of Mayors, supported Chicago Mayor Rahm Emanuel’s hard line against striking teachers and has endorsed so-called “parent trigger” laws that allow parents to convert schools to charters.
The SRC’s confusing delegation of authority has obscured accountability, leaving the state government in charge but unaccountable. Clarke tells CP that he was surprised when SRC Chairman Pedro Ramos and Hite told him that “there was no concerted effort from various school districts across the state to go in as a collective body, to go in and ask for additional funding.”
“While it’s supposed to be a state-controlled entity,” he says, “I don’t see a sense of urgency from the state to make sure this district remains whole.”
* Correction: The School District of Philadelphia will pay $280 million in debt service this fiscal year, not $28 million.
Philadelphia City Paper – May 23, 2013 – Read article online