Privatizing discipline in Pennsylvania brought together unlikely allies: the Republican state legislature, which liked privatization, and the teachers' union, which opposed it, but was desperate to get troublesome students out of regular classrooms. In addition, CEP's original proponent was former Philadelphia schools superintendent David Hornbeck, who got along with neither the legislature nor the union.
Hornbeck first saw CEP in operation in Houston in 1998, and was impressed, especially when the company agreed to a performance-based contract. The company had been started by several well-connected Republican operatives in Texas and Tennessee, including Randle Richardson, who is still the president. Today, the company has 13 schools in six states. CEP was “claiming outcomes in Houston both in terms of test performance, dropout reduction, and return to the host school that were very impressive,” Hornbeck said in a recent interview. “It began to emerge in my mind, this was a no-lose situation, a creative response to a very real problem.”
Then-Majority Leader John Perzel and Philadelphia Democrat Dwight Evans also went to Houston to check out CEP, and in 1999 the legislature passed a law allowing districts to contract with private providers to run discipline schools. Perzel indicated that Harrisburg was prepared to provide some money to help the District to bring CEP to Philadelphia - one of the few things in the city schools that the state was eager to fund.
Since then, state funding for alternative education has exploded, from about $5.2 million in 1998-99 to $66 million this year. Of that amount, $23 million is available to all districts that apply, while $43 million is doled out by Republican legislative leaders to five urban districts: Philadelphia, Harrisburg, Lebanon, York and Pittsburgh.
Diane Castelbuono, deputy secretary for elementary and secondary education, said that privatization has grown faster than the department can adequately monitor, and that the financial incentives to districts and companies promote placement of students in the schools, but not the development of quality programs for students once they're there.
Harrisburg has been focused intently on stemming school violence and crime since 1995. It created one of the toughest zero-tolerance discipline policies in the country - resulting in an escalation of expulsions. The legislature got particularly tough with Philadelphia, enacting a law forbidding the city from allowing students who had been in prison to return directly to neighborhood schools and creating a Safe Schools advocate to monitor the city's compliance with anti-violence mandates.
Vallas said the money from Harrisburg comes with no strings attached. “Nobody ever told us you have to hire private providers,” Vallas said. “The speaker [Perzel] has always said, hire the best providers, and if you do it better in house, it's your call.” Perzel's spokesman did not return a call asking for comment.
At the same time, he said, the providers are the ones doing the District's lobbying in Harrisburg for additional funds. This year, Philadelphia is getting half of the caucus-controlled money, some $22 million, some of which will go to CEP for a new school for overage, underachieving students.
CEP officials are generous contributors to Perzel's campaign coffers and those of other Republican legislative leaders, and have also donated to the city Republican committee and to Gov. Rendell. Campaign contributions from CEP executives in Pennsylvania since 2001 total over $62,000, according to Pennsylvania Department of State campaign finance reports.