Commentary: The '20% less' solution is the problem, not the answer

by on Jul 03 2012

This guest blog post comes from Michael Churchill of the Public Interest Law Center of Philadelphia.


Philadelphia is being told that District budget deficits can only be avoided through deep program cuts, massive school closures, and contract concessions. City Council was asked to increase funding to avoid even further damage. But little attention is being focused on the true cause of the District’s deficits – the state’s insistence that Philadelphia students ought to be educated for 20 percent less than what is being spent on students in the rest of our region.

The School District’s new leadership has told us that the District faces a potential $1.1 billion budget gap over the next five years unless we close one-third of the District’s schools, replace all custodians and bus drivers with lower-paid, outsourced replacements, ask teachers and other remaining District staff to accept a 10 to 15 percent cut in their wages and benefits (or have that cut imposed on them by taking away collective bargaining), and get the city to approve $94 million in new local property  taxes, in addition to the $54 million local school-funding increase approved last year.

The District’s leadership says this plan provides for “shared sacrifice” to keep our schools solvent. There is one glaring problem with this argument: All the sacrifices are being demanded of Philadelphia residents, taxpayers, parents, students and staff. There is no call for the Commonwealth to rescind the massive funding cuts it imposed on the District last year.

District leadership is promoting the narrative that the financial problems of Philadelphia’s schools are the result of “bad fiscal policies” on the part of the District itself. In other words, it created its own problems through incompetence and overspending. We Philadelphians are often willing to believe that our local officials have messed up, but in this case the facts just don’t support this myth.

Let's take a look at many of the questions swirling around the District's budget.

Has the School District been spending more than it was given? No.

The District ran surpluses of about $30 million a year in 2009, 2010, and 2011.  In 2012, after massive spending cuts to make up for a 15 percent reduction in state and federal funding and unavoidable cost increases in areas like health care, pensions, utilities and charter schools, the District says its 2012 budget is close to balanced. So, the District is not living beyond its means.

Is Philly spending too much for its schools? Far from it!

The most recent statewide figures available from the Department of Education indicate that per-student spending in Philadelphia was $13,272 in 2009-10, 3 percent lower than average per student expenditures in all of Pennsylvania’s 500 school districts. (And that was before this year’s 8 percent across-the-board Philadelphia spending cuts.)

Does Philadelphia spend more per student than neighboring school districts?  No. 

State data show that average per-student spending in the 62 school districts in Bucks, Chester, Delaware and Montgomery Counties was $15,976 in 2009-10, $2,703 more per student than Philadelphia. (If Philadelphia had an extra $2,700 per student, its budget would be $540 million higher.) Why would anyone think that  students living in deep poverty in Philadelphia can be effectively educated for 20 percent less than what is being spent on students in the suburbs? And why would anyone think it fair to keep on doing so, year after year?

Well, doesn’t Philadelphia get more state funding than any other Pennsylvania school district? No, not on a per-student basis. 

State data show that more than 30 percent of Pennsylvania’s school districts get higher per-student state funding than Philadelphia. In some cases, the difference is dramatic. Pittsburgh received $8,645 per student in state funding in 2010, while Philadelphia received $6,779. That’s a $1,866 difference. If Philly had an extra $1,866 per student in state funding, it would be receiving $373 million more from the Commonwealth.

And the disparities continue. 

The governor’s 2013 budget proposes 4 percent state funding increases for school districts like Lower Merion, Colonial, Upper Dublin, Hatboro, and Radnor, but just 1 percent for Philadelphia.

Well, wasn’t all the funding Philly lost this year federal stimulus funding? Shouldn’t the District have seen that coming? The School District did see the stimulus cuts coming. 

But Pennsylvania also cut an additional $190 million from Philadelphia by slashing 100%-state-funded education line items like charter school reimbursement, educational assistance, dual enrollment, accountability block grants, and a host of smaller line items.

How about teacher pay? Isn’t Philly higher there?

The Pennsylvania School Boards Association says that in their first few years Philly teachers get paid about the same as teachers in the suburbs, and then get paid significantly less. (It is true that suburban teachers contribute to their health care costs, and Philly teachers do not. If Philly teachers contributed at suburban levels, the District could save at least $30 million a year.)

Well, didn’t former Superintendent Arlene Ackerman waste a lot of money on pet programs? No question, Ackerman used one-time federal stimulus money to create and expand academic programs.

Under federal rules, that’s what she was supposed to do. The jury is out on whether those initiatives were worthwhile. But now that is beside the point.  The stimulus money is gone and the programs it paid for have been eliminated, yet the District’s 2013 budget is still massively out of balance. So the District’s current budget crisis is not the result of lost stimulus funding or Ackerman’s pet projects.

Really, it shouldn’t even be necessary to make these arguments. 

All you have to do is look at what is happening to school district budgets in the rest of Pennsylvania. How can the financial problems of the Philadelphia schools be the unique result of local “bad fiscal policies” when every low-income, low-tax-base school district in Pennsylvania is suffering similar distress? York, Erie, Lancaster, Chester, Reading are all being forced to make massive cuts. Doesn’t that strongly suggest that Philadelphia’s financial crisis is not the result of some unique failing on Philadelphia’s part, but rather the refusal on the part of the Commonwealth to provide adequate funding for all of Pennsylvania’s public schools?

This is not an argument for maintaining the status quo.

The District does have underutilized buildings that it must close. It does need to improve efficiency, root out waste, and promote accountability. The unions do need to be part of the solution. So do local taxpayers. And academic achievement, which has been going up, clearly needs to improve much more. 

But any plan to make things better has to start with the reality that Philadelphia is deeply underfunded by any objective measure. 

The District’s current five-year financial plan is so draconian and imposes so many unreasonable costs on parents, teachers, and other employees because it accepts the premise that the Commonwealth has no obligation to be a significant partner in meeting the District’s financial needs. That forces all other options to be more extreme than is fair or rational.

For example, even if City Council had approved the District’s request for $94 million in new school taxes, the SRC was proposing to borrow at least $217 million to balance a 2013 budget that restores none of this year’s cuts, saddles future city taxpayers with the resulting long-term obligation from the deficit financing – and asks the Commonwealth for nothing.

That is really bad fiscal policy, forced on the District by the Commonwealth’s failure to do its share. We need the Commonwealth, which controls the SRC, to become a true partner in creating strong public schools for all Philadelphia students. We cannot compete with 20 percent less.

Even so, in the final budget negotiations, as the legislature rushed to help distressed districts, Philadelphia was deliberately excluded from getting any extra funds.

I hope that incoming superintendent William Hite understands this and will be an advocate for the District's needs in Harrisburg.