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Takeover or turnaround? The School District's prospects





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One of the undercurrents floating among parents and teachers is that the School District’s financial crisis has been created by elected officials and their allies in order to “charterize” and privatize the entire District.

Would this strategy be an answer to the budget problem? Charter schools can be significantly cheaper to operate than District schools, and demand from parents is high and growing. Were the District to become, essentially, a system of charter schools, with the School Reform Commission as authorizer, then perhaps we might have both a balanced budget and happy parents.

It may at first sound far-fetched or overblown, it may not. But it’s a scenario that’s looking like the SRC’s only practicable option other than bankruptcy. Because without substantial funding increases, the School District, as is, cannot be sustained.

The SRC maintains that its hands are tied. It can’t reduce District operating costs in direct relation to charter student out-migration and it has to pay charter schools for transfers in from parochial and private schools – students who have never been enrolled in the District. Nor can the SRC reduce “fixed costs” like debt service or transportation as enrollments decline. The situation creates a conundrum that could be solved by charterizing and privatizating all schools and services.

From the point of view of the governor, state legislature, mayor, and City Council, four successive “turnaround” superintendents (dating back to 1995) have been unable to stabilize District finances and put in place the conditions for sustained improvement in student performance. Nor has state intervention worked. In the view of elected officials, there is no evidence that increased funding would solve the District’s problems.

Since the SRC's creation in 2001, authorizing charter school expansion has been part of the its state-endorsed mission to increase options for students. There have also been forays into privatization, first with the unsuccessful attempt to make Edison Learning the District administrator, then arrangements with educational management organizations, and, more quietly, a contract with Camelot to operate schools for unruly students.

Has what has happened since 2001 actually been just an incremental takeover?

In a typical corporate takeover, a hedge fund, corporate raider, or competitor sees an opportunity to acquire a distressed company at a discounted price, sell off its assets, close non-performing components, downsize the workforce, impose less costly compensation and benefit plans on remaining employees, renegotiate debt, eliminate burdensome policies and procedures, unload costly services, and retain the most attractive parts of the business.

That approach sounds very much like what is emerging in Philadelphia. Close low-performing and under-enrolled schools. Sell the buildings. Press employee organizations for lower salaries and less costly benefits – or threaten to decertify them. Downsize. Continue to turn over to charter operators and for-profit providers the less desirable clients (i.e., those students who are low-performing, special needs, English Language learners, discipline referrals, or returns from incarceration). When the situation reaches a crisis point, there is no alternative but to blow the entire District up.

To mollify demanding parents and accommodate “good” students, take the Center City band of schools, add Penn Alexander, Powel and Central and make them a single organization (an approach already discussed among parents). Create a nonprofit corporation without responsibility for the District’s debts and obligations, and increase revenues for this quasi-charter component through parent contributions and other sources.

The SRC, with a small administrative support office, then becomes a holding company. It renegotiates debts and makes transportation a fee-for-service enterprise. Everyone who matters, except perhaps the bond-holders, has been satisfied and decades of atrophy end.

Of course, substantial questions would still need to be answered. What would be gained and what would be lost if this scenario were to play out?

On the one hand, proponents of school choice would be thrilled – a major American city leads the way. In the eyes of national educational reformers, Philadelphia would now be their neoliberal poster child posed in front of Independence Hall. Most parents would be satisfied, although their children might not always be able to attend their first-choice schools. But regardless, individual preference would be the hallmark, and the books would be balanced.

On the other hand, we are all citizens of the Commonwealth of Pennsylvania, which should remind us that we are “people united by common interest.” Because it is perceived to be in the people’s interest, the Commonwealth requires that all its children be educated at public expense. In Philadelphia that common interest has long meant support for a single public school system, with a robust parochial and independent school network as an option.

The city’s public schools have accepted all children regardless of race, ethnicity, religious belief, socio-economic status, special need or spoken language. And the School District of Philadelphia has served a common purpose as reflected in its common curriculum and standards. A strong public school system has been considered in our common interest.

Which should suggest a caution: As our public schools slide inexorably into a new form of organization, we need to keep in mind that markets do not ensure equity, social justice, civic engagement, and opportunity for all.

James H. Lytle is Practice Professor of Educational Leadership at the University of Pennsylvania Graduate School of Education, a former District administrator, and a former superintendent in Trenton.

The opinions expressed are solely those of the author.

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