Deep Structural Financial Crisis Continues in School District of Philadelphia

Did you watch the puff pieces John Merrow put together for the News Hour on PBS for the past two evenings? They were about Philadelphia—the first about Science Leadership Academy, a collaboration between the School District of Philadelphia and the Franklin Institute and a highly selective school where students must submit applications to be accepted—and the second about several schools with open enrollment that, like the Science Leadership Academy, feature project-based learning.  According to Merrow’s report, the school district is opening such institutions to compete with charter schools.  The series of reports made the future of public education in Philadelphia look bright.

The reality is far more sober.  This blog has covered the ongoing financial crisis here and here.  In Philadelphia, Dale Mezzacappa just published a post-election update about the continuation of the dire financial crisis, a subject glossed over in Merrow’s report for PBS.  According to Mezzacappa, “The District is looking at another shortfall next year.  Its best hope is that Gov.-elect Tom Wolf can make good his promise to increase state education spending and create a fairer way to distribute aid…  It is still unclear whether Wolf can fulfill his promise to raise taxes to send to school districts and convince the legislature to enact a fairer education funding formula.  Wolf will be facing a more Republican General Assembly than Gov. Corbett, whom he defeated, and one that just elected more conservative leadership.  Wolf won in part because inadequate education funding under Corbett became a statewide issue. Six districts outside Philadelphia, along with advocacy groups and parents, filed a lawsuit Nov. 10 against the state for failing to provide each child with a constitutionally mandated ‘thorough and efficient’ education.”

Mezzacappa continues, “Newly enacted cigarette and sales taxes burden only Philadelphians, and they are still not enough.”  But as the Merrow report for PBS explained, 40 additional charters are making application to open.  Why is a charter expansion being contemplated when the school district is broke and Pennsylvania, having cancelled the reimbursement it used to provide to school districts when charters expand, now subtracts costs for students leaving for charters from the local school district’s budget?  Mezzacappa explains: “In authorizing the city to impose a $2-a-pack cigarette tax to raise school revenues, the legislature ordered the SRC (state School Reform Commission that serves in place of a locally elected school board) to reopen the charter pipeline and gave rejected hopefuls the right to a state appeal… Since 2011, charter costs have climbed from 18 percent to 31 percent of the District’s budget.”

Mezzacappa concludes: “Despite the new funding streams (local cigarette and sales taxes), the District’s deficit for 2015-16 is projected at $71 million without drastic reductions in ongoing personnel costs… Due to the fiscal chaos, Fitch Ratings in October downgraded the District’s bond rating.”

Although John Merrow’s programs about quality teaching and project-based learning are inspiring, the School District of Philadelphia cannot be saved by isolated programming, however innovative.  The school funding crisis in Pennsylvania is structural. The state has cut taxes and reduced its public education budget by $1 billion since Governor Tom Corbett was elected four years ago.  As  Philadelphia Inquirer political analysts commented after Corbett’s defeat in November: “Corbett could have levied a severance tax on natural gas, or moved money from other programs to soften the blow. He did not, while he reduced business taxes an estimated $400 million and placed more than $600 million in reserve.”

Schools Open In Philadelphia, But Crisis Drags On

Superintendent William Hite opened school in Philadelphia on September 8—based, it seems, on hope and a prayer.  It can’t be said that he could really even count on the good faith of the Pennsylvania general assembly, whose members went home for their late summer break without even passing enabling legislation for the local school district to levy a $2-per-pack cigarette tax to help close what remains an $81 million budget deficit.

The state legislature returned to Harrisburg yesterday, September 15, and, according to the Philadelphia Inquirer, the House is expected to vote this week on the proposed legislation to permit the local cigarette tax.  Assuming House passage, the bill will then move to the state senate.

It is astounding that the financial morass created by the state of Pennsylvania for one of our nation’s largest school districts—and one that has been under state control since 2001—is not really being addressed.  William Green, chairman of the state’s own appointed School Reform Commission that functions like a school board, has been standing with Superintendent Hite in protest of the state’s policies, but to no avail.

When Hite announced on August 15 that the school district would gamble on future legislative action come mid-September, he did so, according to Education Week‘s “District Dossier” blog, by making cuts to programs that include: elimination of high school transportation for students within two miles of school, reduced services for 300 students pursuing multiple pathway to graduation, elimination of staff development for teachers even at schools facing severe challenges, cuts to cleaning and repairs in school buildings, elimination of 34 school police, and $800,000 in administrative cuts.  This is on top of the layoffs of thousands of teachers over the past two years and the closure of 24 school buildings in the spring of 2013. The Philadelphia Public School Notebook reports that Superintendent Hite intends the cuts he made in August to save $32 million; he hopes to restore some of these services if the cigarette tax can be enacted.

No one really knows how much the proposed cigarette tax would generate. The Notebook reports the cigarette tax is projected to provide $49 million this school year; according to Education Week’s “District Dossier,” “the cigarette tax is expected to generate between $38 million and $60 million.”  School finance experts would warn about counting on sin taxes for for a major percentage of a school district’s revenue stream, as well as imposing the least progressive kind of tax there is.  Of course, Philadelphia has little choice, as the state of Pennsylvania has reneged on its responsibility to support the schools adequately.

The Education Law Center reported last Friday that on September 9, in response to the years’ long financial crisis, Parents United for Public Education—a Philadelphia parent and community advocacy organization—filed a lawsuit to force the state’s Education Secretary “to investigate hundreds of parent complaints of massive deficiencies in city schools.”  Parents United for Public Education has been collecting filings of complaints by parents.  So far 825 formal complaints have documented dire school conditions which state law requires the Pennsylvania Department of Education to investigate.  “Problems alleged by parents include alarming levels of overcrowding such that teachers can no longer walk between desks to interact with individual students, increasingly limited curricular offerings, a distressing and dangerous lack of counselors and school nurses, and squalid and insufficient toilet facilities.”

An attorney for the Public Interest Law Center of Philadelphia is quoted in the Education Law Center’s report: “Secretary Dumaresq must know that responding to parents’ pleas with form letters and silence not only violates the trust of parents, but is also a clear violation of her department’s legal duties.”

For more detailed history of the ongoing crisis in the School District of Philadelphia, see previous coverage by this blog  here, here, and here.

Huge Hole Remains in Philadelphia School Budget; Legislature Goes Home without Addressing Crisis

What happened yesterday in Philadelphia is not a sudden development; neither is it a surprise.  It is merely one more chapter in a tragedy that continues to unfold.  Earlier in the summer when the Pennsylvania state legislature passed a budget, leaders of both houses promised to add enabling legislation for Philadelphia to levy a local $2-per-pack cigarette tax to generate $81 million to close an enormous gap in the school district’s budget for the school year set to begin on September 8, 2014, just a month from now.  The legislature dithered; House and Senate passed separate bills to enable the local cigarette tax; and then—just last week—the legislature went home for its August break without reconciling the bills.  Law makers are not scheduled to return to Harrisburg until mid-September.

Yesterday, Governor Tom Corbett, no friend to Philadelphia’s schools, arrived in Philadelphia with a promise to advance the School District of Philadelphia $265 million.  This is not extra money; it is merely an early payment of funds the district would receive anyway from the state later in the school year.  Corbett proposed the cash advance as a way to permit school to open and to alleviate the need for the school district to borrow, thereby saving the district $4 – $5 million in borrowing costs.

Superintendent William Hite (who reports to the School Reform Commission that is appointed by the state, as Philadelphia schools are under state control) is understandably reluctant to open school with a gaping hole in the district’s budget until he knows the cigarette tax has received state approval. And even members of the state appointed School Reform Commission earlier this summer stood with Hite and against Corbett to advocate for the rights and safety of the children.  (Of course even if Philadelphia gets the right to levy the cigarette tax, there is no guarantee it will generate the hoped-for $80 million to support the public schools.)

Hite says that if the legislature hasn’t reached some agreement by August 15, he will have to lay off 1,300 more staff and raise class size to 41 students per teacher.  In the first chapter of the ongoing Philadelphia school budget catastrophe, in the spring of 2013, the school district closed 24 schools and laid off 4,000 teachers and other staff.  The cuts Hite says he is forced to contemplate by the current crisis would be on top of the 2013 cuts, and he is unsure he can sufficiently staff and safely open school at all on September 8 without the guarantee of a secure revenue stream in the form of the cigarette tax.

There is, of course, politics involved in all this.  At his press conference, Corbett added, as he always does, that the teachers union ought to make major concessions.   Yesterday Kevin McCorry, writing for Newsworks, Philadelphia, reported that Corbett says legislators will be more sympathetic to Philadelphia’s needs if the union makes concessions in work rules and health care, and accepts a “salary cut of 5-13 percent.”

This blog reported earlier in the summer on a commentary published by David Sciarra of the Education Law Center.  Sciarra does not believe the problem rests with the teachers union.  He describes “an extraordinary legal complaint” filed in March by the School District of Philadelphia with the Pennsylvania Supreme Court.  The district is asking the Supreme Court effectively to nullify “portions of a collective bargaining agreement between the Philadelphia School District and the teachers union.” While the purpose of the legal complaint is to free up funds through the manipulation of the teachers’ contract, Sciarra blames the state: “The school district—and the entire state—is engaged in an ongoing and severe violation of the right of Philadelphia students to a ‘thorough and efficient’ education under the Pennsylvania Constitution.”

The School District of Philadelphia has been under state control since 2001, with a state-appointed School Reform Commission making decisions in place of an elected local school board. Philadelphia is today’s poster child for the destruction of a public school system—primarily by a state government unwilling to carry out one of its primary responsibilities. Pennsylvania lacks a working formula to distribute funds to local school districts according to need.  The state does not adequately equalize access to education by directing sufficient funding to school districts like Philadelphia that must address the needs of masses of children living in concentrated urban poverty.  Also the School Reform Commission is  intent on its “portfolio school reform” plan based on closing traditional public schools and opening charters, but in Pennsylvania, the costs for charters are subtracted from the budgets of local school districts without adequate state reimbursement.  Bill Hangley Jr., writing for the Philadelphia School Notebook, summarizes Philadelphia’s plight that has continued for well over a decade: “a state takeover and a host of experiments in private management and school choice, and system-wide inequities [that] persist to this day.”

Hangley interviews civil rights lawyer Michael Churchill, who has tracked problems in the School District of Philadelphia for four decades as an attorney with the Public Interest Law Center of Philadelphia.  Here is Churchill’s assessment: “At this point, there’s not any chance for improvement.  The superintendent said he needed [over] $400 million to continue improving things, and about $216 million just to get back to last year’s level.  We still have not even gotten the full $216 million.”  “The charter funding formula is absolutely crazy, one of the worst in the country.  But that’s small potatoes compared to our single biggest problem—the state puts in too small a share of funding.  Pennsylvania appropriates about 35 percent of the cost of public education. Pennsylvania needs to get up to about 50 percent of the cost of education.  And while they’re figuring that out, they need to calculate real costs—like the cost of educating kids in poverty.  When you do that, you’ll take care of the problems. We know the solutions. It’s not a mystery. What’s lacking is political will.”