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December 2013 Vol. 21. No. 3 Focus on A Broken Funding System

District news

No relief in sight for District’s troubled finances

Most additional funding has been on a one-time basis, so a gaping budget hole is likely yet again for next school year.

By

by Dale Mezzacappa

on Nov 25, 2013 03:02 PM
Photo: Harvey Finkle

City Council President Darrell Clarke (left), shown here with Councilman Curtis Jones Jr., was at odds for months with Mayor Nutter over how to raise $50 million the District needed to help make up for its shortfall.

This story will appear in the Notebook's forthcoming print edition focusing on school funding, due out on Dec. 2.

 

Nearly three months into the school year, the School District of Philadelphia is still navigating treacherous fiscal waters, having made little progress in convincing state and city lawmakers to provide financial relief and stability.

Faced with a $304 million budget gap for this fiscal year, the District had sought $180 million in new revenues from the state and city and $133 million in labor concessions. As of mid-November, it had received $112 million in increases from the state and city, but just $17 million of that is in recurring funds. And it had reached no agreement with its unions.

As a result, it is still operating schools with shrunken staffs, sparse instructional materials, inadequate counseling services for students, and classes at their contractual maximum. 

Parents United for Public Education and the Public Interest Law Center have collected almost 900 complaints from more than 80 schools documenting cases where they say the District is not providing legally mandated services to students, including those in special education.

After school opened – with 24 fewer District schools and 3,000 fewer employees than last year – the District got some relief when the state released $45 million that it had been withholding pending certain “fiscal, operational, and academic” reforms, including changes to the teachers’ contract. Although there had been no agreement with the teachers, Gov. Corbett in October said that enough overall progress had been made toward the goals to release the funds.

The District used the bulk of the $45 million for special education teachers and one-on-one aides ($15 million), 80 counselors ($8 million), instrumental music and winter and spring athletics ($8 million to $9 million). Another $5 million brought back several dozen assistant principals and other positions including secretaries, school operations officers, conflict resolution specialists, and a few more teachers.

“The remainder we have yet to allocate,” said Chief Financial Officer Matthew Stanski. 

Officials have said they are concerned that charter school enrollments are higher than budgeted, because District enrollment is 4,000 students lower than expected. But until staff members complete an enrollment audit, officials are unwilling to report how many more students are in charters and what the additional costs to the District will be. 

And so the new revenue was still a long way from solving the District’s problems. 

“Based on our demographics and student needs, we should be spending more money to educate our students, not less, and we should be expanding resources, not limiting them,” Stanski told a group of mostly unsympathetic City Council members in November. “Our schools and students require additional resources and support, and we still do not know whether we will be able to access recurring revenues next school year.”

Bleak outlook

The District is facing a deep hole again in 2014-15, because this year’s budget has been balanced with well over $100 million in one-time measures, like spending down its reserves. That includes the $45 million payment from the state and another one-time payment of $50 million from the city. Both were designed under Gov. Corbett’s “rescue” package to be replaced next year by revenue from an extension of the 1 percent temporary sales tax increase. But that is still the subject of dispute.

“Right now we are in a funding situation where we are unable to provide basic educational services for students,” Stanski said. 

And the picture for 2014-15 is likely to get even worse, he added, to the tune of $75 million to $100 million in higher pension costs, health benefits, utility expenses, payments to charter schools, and salaries.

The $17 million in new, recurring money comes from a $2 million increase in the state basic education subsidy beyond what was expected and $15 million from improved city property tax collection, which officials now think they can count on permanently.

These funds, along with the $50 million infusion from the city, were allocated in August to bring back positions that had been eliminated, including some counselors and noontime aides.

But it took until October for Mayor Nutter and City Council to resolve a dispute about how the $50 million would be raised. Their solution actually relies on the District’s own resources. The city is helping the District market its excess property and is advancing those dollars in anticipation of District proceeds from sales of closed buildings.

Meanwhile, a standoff continues between City Hall and Harrisburg – not to mention squabbles within City Hall itself – over who is most responsible for the School District’s solvency and who should act first.

“Given the crisis facing Philadelphia schools and students, neither City Council nor the General Assembly should wait for the other to act,” Michael Churchill of the Public Interest Law Center of Philadelphia, told Council in November. “Students cannot wait; they are in school now.” Other education activists reiterated that message.

About the Author

Contact Notebook contributing editor Dale Mezzacappa at dalem@thenotebook.org.

Comments (45)

Submitted by Joe K. (not verified) on November 25, 2013 3:32 pm

And "The Unions" shouldn't give a dime to this fiasco of a crisis. If Jerry concedes anything, he's playing right into the hands of big money and then for sure, members of The PFT should demand his resignation. The DOW is at the highest EVER and City Council has no problem with their DROP Program but the Middle Class is expected to take a hit. This is happening everywhere and all thinking people should be concerned. Until/Unless ACT 46 is challenged, The PFT is worthless.

Submitted by Anonymous (not verified) on November 25, 2013 5:26 pm

No reason to concede. Based on the monies they're NOT getting from the state, concessions wouldn't solve the problem anyway.

Submitted by Joe K. (not verified) on November 25, 2013 6:30 pm

I agree with you but it's not about money in the traditional sense. It's about POWER and unilateral power at that. Tyranny is real and could end our Democracy IF WE allow it.

Submitted by Anonymous (not verified) on November 25, 2013 7:56 pm

Yes. Stimulus money spent on raises is permanent!

Submitted by Spanky (not verified) on November 25, 2013 7:36 pm

Joe sayeth, 'And "The Unions" shouldn't give a dime to this fiasco of a crisis...'

And by your logic, the taxpayers also shouldn't give a dime to this fiasco of a crisis. So, I guess we're at an impasse.

Submitted by Joe K. (not verified) on November 25, 2013 8:59 pm

Spanky--This is class warfare, make no mistake about it. By any means necessary, the working class must resist and win. By the way, NONE of this is new. Read more History.

Submitted by tom-104 on November 25, 2013 9:18 pm

And your solution to struggling public schools is to lower their teachers' living standards?? Since you are only concerned about self interest, what impact do you think lowering the living standards of a significant part of Philadelphia's population will do to the local economy? If it happens, all we will be left to say to you is "What goes around, comes around!"

http://tinyurl.com/kk53u8u

Submitted by Taxpayer (not verified) on November 26, 2013 11:50 am

And your solution is to raise our taxes for a fourth time in a few years so that you may keep your bloated pay and benefits packages? Remember, every tax dollar taken from us is money we can't spend in the local economy.

Submitted by tom-104 on November 26, 2013 12:06 pm

The problem is inequitable state funding which has been aggravated by inequitable cuts to low income school districts.

http://www.pilcop.org/new-study-shows-state-cuts-to-education-highly-dis...

Submitted by Joe K. (not verified) on November 26, 2013 2:59 pm

Tom---And the far larger problem is the designed inequity between the haves and have nots over the past 35 years. By the way, writing the DOW off is silly to say the least. If the DOW were in bad shape, money folks would be going ape shit about it so let's not even go there. The truth is none of this is new but ALL of it is dangerous for the working class and, of course, the poor. The "Ruling Class" has ALWAYS tried to foist it's way on everybody else. Hopefully, The People are beginning to galvanize their strength of numbers into action mode to push back against the dictatorship wishes of Big Money. Charters are just the newest way to strangle the have nots and separate them from the rich while stealing their money at the same time.

Submitted by Philly Activist (not verified) on November 27, 2013 7:52 am

Oh and let us not forget they also pay taxes on their "bloated" salaries.

"United We Stand - Divided We Fall." Reform is succeeding in clouding the issues. We are continually fighting among ourselves while the rich get richer and those who were elected to govern fail.

Submitted by Taxpayer (not verified) on November 25, 2013 9:50 pm

Amen. The taxpayers have given enough. We refuse to give any more. Let the PFT refuse to negotiate. We'll see who wins that one. Just let their checks bounce.

Submitted by Darnelx (not verified) on November 25, 2013 8:01 pm

The unions need to give back some, but not nearly as much as much as they are being asked to. Here we have a broke district and come to find out that Hite is playing the same old tricks as Queen Arleen and Vallas. Look at all of the hired guns he is bringing in. The problem is that the base line salaries of the 440 staff are just too high. So with the high bar, Hite is bringing in new people at Way Too High Salaries. It's absurd. With unemployment still very high, we could find good people at much more reasonable prices. Politics is just too thick at the district. I invite some smart reporter to start connecting the dots of School District Employees and the politically connected that got them the jobs. It is a huge quid pro quo. Some may argue that the huge salaries are just a drop in the bucket compared to the $Millions in debt, but I say that you have to have a starting point. Force retirements, have a massive 25% pay decrease across the board for all non union staff. Have a hiring freeze. Then talk to me about PFT givebacks.

Submitted by Joe K. (not verified) on November 25, 2013 8:21 pm

Darnelx---There is NO financial crisis, neither in Philly nor in the USA. For the past 35 years, Big Money has marginalized all unions and worker rights. Read more and stop watching Fox News. They have you right where they want you. Check out The DOW while you're at it. Yes, Hite is NOT the friend of anybody who cares about our kids, of that, you are completely right. He's a snake, just like the other Broad Graduates, and he has no business being here. Rooster Nutter is just as bad.

Submitted by Anonymous (not verified) on November 25, 2013 9:08 pm

What cave are you living in? The financial crisis has not only been nationwide, but worldwide. Have you taken a look at the unemployment number in Greece or Spain lately? How deluded can you be to deny that the greatest financial crisis since the Great Depression never happened? Oh, yeah, you're a government sector worker who expects to be protected from any and all downturns in the economy. Not this time.

Submitted by Joe K. (not verified) on November 25, 2013 9:20 pm

I said Philly IS not broke nor IS the USA broke. By the way, the crisis to which are are referring, was 5 years ago. "Never let a crisis go to waste," stated 500 years ago by Machiavelli is alive and well and living in the US NOW. Follow The DOW.

Submitted by Taxpayer (not verified) on November 25, 2013 9:35 pm

The crisis is ONGOING. A debt deflation takes many years to work itself out. The USA has $17 Trillion in debt, $2.4 Trillion in revenue and $3.8 Trillion in outlays. That is equivalent to an individual who makes $24K per year, spends $38K per year to get by and has $170K in credit card debt. So yes, technically we are broke. Forget the DOW. That is simply a function of The Federal Reserve printing money and shoving it into the system where it ends up in stocks. It's not even a result of corporate earnings. 70% of the increase is a result of stock buybacks and multiple expansion.

Submitted by Anonymous (not verified) on November 26, 2013 10:53 pm

Spoken like a Detroit city councilman. Now go give yourselves a 13th month pay for your discovery that Philadelphia is fiscally sound with plenty of money to pay more employees.

Submitted by Anonymous (not verified) on November 26, 2013 5:16 pm

Best laugh today.The PFT leadership has been worthless for at least 8 years.
PFT leaders Jordan, Kempin, Harris, Phillips, as well as Weingarten (AFT) and Kirsch (AFT,PA) don't enforce or letigate anything that is mandated in the contract (CBA).

A union too weak to adamantly fight for their members or challenge Act 46 and have the insight to win. PFT officials just spew more lame excuses why they don't pursue things.Being made a fool of all along the way and making fools of their members too.

The district implements a new dose of sticking employees and violations of the CBA daily and the PFT /AFT leadership sit idly, passively by and let it happen.-NO CHALLENGE whatsoever.

Maybe a frivolous raising of the voice , and that is usually directed at members, but nothing at all substantial towards the bullying District .

Contact the PFT and they ignore members totally.Won't email back, return calls, schedule an appointment to see a representative ,etc. So much for unity.
It is the worst union (PFT/AFT) in the country.

They need to be removed from office because union dues are wasted and members are just supporting the inability of the PFT leaders to take any action while lounging around their offices , maybe taking a call here and there, reading emails perhaps, but never reply back ,when asked to talk to them suddenly they become unavailable,and if you don't buy into their scripted crap they get nasty and disrespectful and rude.

Email Jordan and demand he work for his members and quit pretending too and finally get some guts.
jjordan@pft.org

Submitted by Anonymous (not verified) on November 27, 2013 2:59 pm

Has anyone filed a grievance for anything recently (about 3 years) with the PFT and actually won or had the process, according to the contract followed in a timely matter, executed fully including arbitration (if needed)?
Please let me know.
Just wondering since I heard the PFT union might file grievances but then nothing happens. The District stymies them and PFT will not pursue grievances or disputes.
By the way, a grievance from start to finish as with most unions, have it resolved in beginning step procedures or arbitrated. Usually this whole process, in other unions, takes about 5 months.
The PFT apparently takes years and years and still nothing resolution, even though the time frames are all spelled out in the dispute resolution part of the contract-just not adhered to by the PFT or SDP

Submitted by Joe K. (not verified) on November 27, 2013 2:46 pm

Yes, if The Chicago Teacher's Union is The Gold Standard, The PFT is the Tin Foil Standard. I think it's safe to say that new blood is needed as it always is from time to time in all walks of life. A Union that isn't allowed to Strike isn't really a union at all. Eli Broad likes Company Unions which were outlawed in 1935 because they provided no real rights for their workers. Each company decided the rules for itself, believe it or not. In any case, I also know people who filed grievances and heard nothing for 2 years or even longer and with NO resolution forthcoming. You can't function like that and expect your membership to respect your leadership. Having said that, I agree with several posters that Hite is simply ignoring the contract and doing what he pleases for the very most part. NOBODY past the age of 6 should believe anything coming from his big mouth. He's here to kill The PFT so Big Money can ride herd on the workers, pay them less with fewer benefits and no rights nor recourse. He's a scum bag to say the least. Rooster Nutter is exactly the same, just shorter.

Submitted by Anonymous (not verified) on November 27, 2013 3:01 pm

You are correct .Hite and SRC do as they want by violating the contract anytime they want .
I just found out that if employee fails to give a 60 day resignation notice they will not give you your earned termination pay -sick days, personal time.
I know the law in PA states the 60 day notice but they never withheld termination pay when you didn't.
For years the SDP did nothing and could give an hour notice to quit and even be restored quickly, then Queen Arlene Ackerman can to town and enforced the 60 day rule.But if you did not adhere to it they just would not rehire you to SDP again .Now Hite implemented a no termination pay if you don't give 60 days.Nowhere is this written or agreed to give up that termination pay for not giving 60 days.Send the info. to the state but find it illegal to not pay someone money or paid time off you accured.
You think since they have layoffs if another teacher gets a job in another district-they would be happy since it's one less employee anyway and they are downsizing ,right?
The SDP does what it wants now and the PFT leaders let them.
Jerry Jordan don't use all that oil when you rollover, as usual, the stores may run out of it for Thanksgiving dinners.

Submitted by Anonymous (not verified) on November 25, 2013 5:50 pm

If the SDP can't come to an agreement with the PFT, then it should just unilaterally impose pay cuts. That is all.

Submitted by tom-104 on November 25, 2013 5:42 pm

So you want to live in a dictatorship?

Submitted by Anonymous (not verified) on November 25, 2013 6:14 pm

It's not a dictatorship. It's called capitalism. The employer makes an offer that they can afford. The employee decides to accept or reject it. They are free to seek employment elsewhere if it is not acceptable. It's what we all deal with. What makes you think you are special? If you don't like capitalism, then move to a communist country like North Korea. But even there you will only get the wage you are offered, so I guess your philosophy of choosing your own wage really doesn't work anywhere on this planet. Perhaps a more celestial solution?

Submitted by Education Grad ... on November 25, 2013 6:18 pm

You are wrong. CEOs and professional athletes NEGOTIATE their contracts. How are teachers and other PFT members any different? How do you respond to that?

And your version of capitalism is the reason that so many Wal-Mart employees receive public assistance. And for your information, teachers, counselors, paraprofessionals, and most (if not all) other PFT members are SALARIED employees. We do not receive a wage.

Teachers in Philadelphia are paid less on average then their suburban counterparts and teach more difficult students in more difficult conditions.

Submitted by Spanky (not verified) on November 25, 2013 7:25 pm

And so if that is indeed true, then you are perfectly free to pursue a career in one of those "easier" and "higher paying" suburban districts. Freedom is a wonderful thing. The district has an established budget and revenue pool from which all expenses and salaries must be funded. If the revenue pool is insufficient then expenses and salaries must be lowered accordingly. Pretty simple concept, actually.

Submitted by Education Grad ... on November 25, 2013 8:45 pm

And if the District had established revenue, why did the SRC approve Renaissance schools, which cost money? Why are charter schools allowed to use PUBLIC money to build new buildings? Discovery CS, which OVERENROLLED, has a brand spanking new building right up the street from the old Joseph Leidy ES. Yet Discovery CS doesn't serve the students who attended Leidy for Life Skills Support. Laboratory CS's board is using money for legal fees.

Have you thought about the reasons why revenue has declined? What about cyber charter schools?

You act like the teachers are to blame. And I have applied for jobs in the suburbs but the jobs are hard to obtain and many suburban districts require or prefer teachers to have teaching experience. Lower Merion is an example.

Try having a little empathy for others. And visit a school in one of the rougher neighborhoods in the city and see what goes on. See what principals, teachers, and other staff have to deal with every day.

Submitted by Anonymous (not verified) on November 25, 2013 9:36 pm

Why doesn't the PFT have any empathy for others? All we ever hear about is how they want to raise our taxes so they can line their pockets.

Submitted by Anonymous (not verified) on November 25, 2013 9:36 pm

CEO's don't decide their own salaries. The Board of Directors sets the CEO's salary. Sure they can negotiate a little, but at the end of the day the CEO accepts an OFFER or he doesn't. At that point he is free to seek employment elsewhere. Such is the case with the SDP today. They have x amount of money to spend and they must adjust their expenses accordingly. In the real world expenses are adjusted to revenue, not revenue to expenses. Welcome to the real world.

Submitted by Go-Eagles (not verified) on November 26, 2013 11:49 am

Bingo. Likewise, the state constitution mandates a balanced budget between revenue and expenditures. Ergo, there is "x" amount of money in the budget for both the state and the individual school districts.

Submitted by reformer (not verified) on November 26, 2013 2:15 am

all ceo's and professional athletes don't get paid the same amount and neither have either tenure nor seniority. teachers who wish the big bucks of the suburbs should apply at those districts. the philly taxpayers are tapped out.

Submitted by Go-Eagles (not verified) on November 26, 2013 10:49 am

EGS - Yes. Athletes do negotiate their own individual contracts, but please keep in mind that there are salary caps in professional sports. Baseball is particular with a "luxury" taxes if a team goes over a set limit. There is a finite amount of money for a team, which is no different with the budget of SDP. Of course, players can price themselves out of the market with many of them renegotiating their contracts to make room under the salary cap. My main point is the set limit of a salary cap similar to that of a budget.

Submitted by Anonymous (not verified) on November 26, 2013 11:30 am

How about "Pay?" That covers salaries and wages. How's the job search going since teachers unions have priced themselves out of the market and there is no hiring going on? It should only take 4-5 years to bring back all those with "seniority" who were laid off before they can get to you.

Submitted by linda (not verified) on November 25, 2013 5:02 pm

Unilateral paycuts?.....the SRC can't even remember to publically vote on the salaries of HITE"S STAFF!

Linda K.

Submitted by Anonymous (not verified) on November 25, 2013 10:37 pm

I would be happy if my class sizes were at "contractual maximum." I'm assuming that this means the expired contract that the union says is still in place but the district has never echoed that sentiment. I have a class (ONE) that is within the limits. I have a class that is at the maximum limit. All others are over this limit, and all of my students come to school almost every day.
There is no contract. There are no limits.

Submitted by LS Teach (not verified) on November 26, 2013 5:47 am

I agree. Also, last I checked nobody received their step increases, which was in the contract. So we are NOT working under the old contract.

Submitted by Anonymous (not verified) on November 26, 2013 9:28 pm

Exactly there is no union just a union on paper.
The PFT leaders are fruitless, ineffective, wimpy, discourteous, illustrates total inaction inept, etc.
The officers at the PFT are a joke, enjoying their cushy jobs, a sham, and a total disgrace to their members.
I researched many unions and been in 3 different ones during my career, and the PFT is the absolute worse.
Jordan needs to take a crash course what solidarity actual means and stop his fake acting that he is for it or has been for it for several years.
He wasn't voted in by the members and a majority of members want you out, recalled or a coup to get rid of you and your ineffective board members.
The top people at the PFT are all for themselves and their money, just biding time for their huge pensions. Many teachers and other PFT members would love the cake jobs you have.
Drinking coffee when you want, coming in and leaving when you want, having extended lunches, going to the bathroom and taking as much time as you want,making personal calls or errands when you want, just a calm ,stress -free job. PFT leaders come to the schools and try that stuff. You wouldn't last a minute since you forget what it is like in schools anymore since you all been sitting in 1816 Chestnut St. for decades.Things changed dramatically since you been inside a classroom.
Ask the PFT to help you and you hear excuse after excuse. Call them out on an issue with facts and they shut you down real quick, like real professionals, instead of listening to members and using some of their members valued suggestions.But they (PFT leaders) think they are all knowing.

Submitted by Anonymous (not verified) on November 26, 2013 10:59 pm

The PFT (and the AFT) have become a company union.

http://en.wikipedia.org/wiki/Company_union

Submitted by Anonymous (not verified) on November 26, 2013 5:14 pm

Has anyone filed a grievance for anything recently (about 3 years) with the PFT and actually won or had the process, according to the contract followed in a timely matter,thus being executed fully including abitration (if needed)?
Please let me know.
Just wondering since I heard the PFT union might file grievances but then nothing happens.The District stimies them and PFT will not pusue grievances or disputes.
By the way, a grievance from start to finish ,as with most unions, have it resolved in beginning step procedures or artitrated . Usually this whole process, in other unions, takes about 5 months.
The PFT apparently takes years and years and still nothing resolution, even though the time frames are all spelled out in the dispute resloution part of the contract-just not adhered to by the PFT or SDP.

Submitted by g (not verified) on November 26, 2013 8:31 pm

Grievances seem to just get filed in the circular file. They don't go passed the filing stage.

Submitted by Anonymous (not verified) on November 28, 2013 2:10 am

Email Jerry Jordan , jjordan@pft.org ,and akempin@pft.org , Arlene ( Vice President ) Kempin , and tell them you are sure they are having a Happy Thanksgiving since they sit like the all- knowing and destroyed the PFT union while many members are laid off when they shouldn't be since the SDP ignores seniority now and the PFT administrators endorse it.Additionally, the members didn't get any step raises and totally crapped on many other parts of the contract by the District.
Jordan , Kempin, Harris , etc, all of you are pathetic and beed to go.You don't do your jobs by supporting your members.
Members stand up to the incompetent officials at the PFT.
Resign or be kicked out. We are going start an effort (maybe decertify the PFT and get the NEA) to rid all of you at the headquarters on the PFT and get new people in there that care about their members and their issues.

Submitted by anon (not verified) on November 28, 2013 11:05 am

non-payment of step raises, masters +30, senior career teachers, etc is a defacto pay cut. i'm sure hite & the src are quite happy to continue indefinitely in this vein, as they are saving substantial amounts of money. any teachers out there think they're going to get backpay for missed income if/when contract is signed? hah!
i have to question why jordan doesn't go public with how much money the district is saving every day that they deny teachers the raises that are in their last contract. it would be simple to arrive at a number and an excellent public relations point to make. haven't heard a word about it recently. sort of like the dog that didn't bark. complicity?

Submitted by Anonymous (not verified) on November 28, 2013 2:57 pm

The NEA would be no different. Dennis Van Roekal is as much of a collaborator with neoliberals
http://tinyurl.com/ccrgm
in the Democratic party and corporate ed deformers like the Gates Foundation as Randi Weingarten. We need new leaders who represent the 99%, not the 1%.

http://tinyurl.com/lpmo34h

Submitted by Anonymous (not verified) on December 2, 2013 1:00 pm

Email Jerry Jordan , jjordan@pft.org ,and akempin@pft.org , Arlene ( Vice President ) Kempin , and advise them the all- knowing PFT leaders destroyed the union allowing the District to breach many,many components of the collective bargaining agreement for several years.

Many members are still laid off when they shouldn't be since the SDP ignores seniority now and the PFT administrators endorse it by their inaction.
In addition, members didn't get any step raises and are totally crapped on by the District.The officials at the PFT have not challenged any actions taken recently by the SDP.Sitting lackluster at a bargaining table does not illustrate strong, effective union leadership.Nothing has been accomplished there either and won't be.The District does not intend to bargain in good faith.

Jordan , Kempin, Harris Phillips,etc, are incomptent and need to go.You don't support your members.Resign or be kicked out. Members need to start an effort to decertify the PFT and form a union that caters to their dues paying members and their issues.

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