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Commentary: Is there a way out of the District's budget hole?

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The School District's plan to close the huge budget gap undermines the very bedrock of what we know works in education: early childhood supports, full-day kindergarten, transportation, a manageable class size.

But when the District is faced with a deficit of more than $600 million, are there better solutions?

Much of the public’s attention has been rightly focused on Harrisburg. But no matter what comes out of the final state budget debate, both the city government and the District also need a multi-tiered, short- and long-term approach toward addressing finances. The District also needs some serious re-consideration of the type of leadership that will help us get there.

First, Philadelphia needs a grassroots coalition-building approach toward Harrisburg. District officials have been organizing a series of bus trips and rallies to the state capital to protest the governor’s budget. But local leaders ought to know that actions which include only Philadelphians and feature the controversy-laden District in a prominent role will have limited impact.

The stronger tactic is to build alliances with districts and education supporters across the state, all of whom have benefited from improved funding for schools. This type of alliance helped win the historic Rendell-era funding formula in the first place. In a political environment that is so jaded about Philadelphia's needs, a coalition approach is needed more than ever.

Second, the city needs to re-establish its financial responsibility to the School District. Several years ago a group I co-founded, Parents United for Public Education, worked with others to secure a higher share of city real estate revenue for the schools. City Councilman Wilson Goode, Jr. sponsored a bill that increased the District's share from 58 to 60 percent and brought in an additional $10 million to the schools at the time.

Under the Nutter administration, we have seen that share decline from 60 percent to 55 percent, a difference of almost $60 million, according to the District’s finance office. Although property taxes have increased, the city's contribution to schools has reverted back to 2007-8 levels. The city has also held onto sacred cows like uber-generous tax abatements. An Inquirer analysis done in 2008 said that by 2012 the schools would have forfeited at least $109 million due to tax abatements. Our schools don’t see a dime of profit from the program until 2025. 

The mayor needs to take a proactive approach toward the deepest financial crisis to face our schools. The city must decide on an additional  allocation to help the District address the immediate budget gap. More important, the mayor must support re-establishing the 60 percent property tax share to schools and easing the financial impact of the tax abatement program.

Clearly, the District's spending priorities also need review. Last week, Chief Financial Officer Michael Masch offered to open up the District’s books and invite any and all viable solutions. We need to take him up on that offer.

It’s alarming that the District has so prominently targeted for cuts programs that we know work while leaving in place questionable initiatives and pet projects. For instance, it still plans to spend $23 million on summer school and has budgeted $24 million for extra supports for 18 Promise Academies. At the same time it is cutting $40 million from transportation, eliminating all bus service and TransPasses for regular education students attending District -run schools.

The District spends $400 million annually on contracting for services, claiming that about 75 percent of that is locked up in non-negotiable areas like utilities. That still leaves $100 million worth of discretionary contracts that include things like professional services that aren't even competitively bid; extraneous benchmark testing; and more than $4 million paid to the city for the Bureau of Revision of Taxes.

As a start, the District should identify and publish all contracts that cost more than the mean salary of a teacher, say $50,000 or more. It should specify which of these contracts are competitively bid, whether they are essential services to schools, and whether there’s been a review of their effectiveness. 

Finally, in any budget or fiscal crisis, integrity matters. The public needs to trust that the individuals making the decisions on potentially devastating proposals abide by a sense of stewardship and ethics. For example, the current budget forecast relies on the District’s ability to renegotiate the contract with the teachers’ union. But if District officials refuse to budge on their own exceptionally high salaries then it sure seems a stretch to expect others making far less money to do so.

Public officials love to say "it's about the kids" when talking about the schools. In a time of fiscal crisis, that commitment must mean identifying the District's essential mission and setting aside pet projects. It's not about rhetoric but about hard choices, priorities, and a need to exercise real fiscal discipline. 

This message so far is absent from leaders at the District, city and state. It's up to the public to set those priorities straight.

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