May 28 — 11:00 pm, 2003

Quietly, battle over private management of schools rages on

Philadelphia reform experiment enters second year

battle Photo: Harvey Finkle

The noise level is lower at School District headquarters this spring, but the political struggles over private management of schools continue.

Despite the departure of the Ridge/Schweiker team from Harrisburg, there is still strong support among influential state legislators and on the School Reform Commission to extend the experiment in privatized school management that was started last year.

The decision last April by the School Reform Commission to bring in seven outside education management organizations (EMOs) to manage 45 Philadelphia schools was the outcome of a raucous political battle over a school takeover plan pushed by the former governor. Student and community organizations went toe-to-toe with elected officials; the mayor and City Council entered the fray against the governor and powerful Republican state legislators.

The most controversial of the EMOs, Edison Schools Inc., was ultimately asked to run 20 schools, far fewer than expected. Two universities, two other companies, and two nonprofits were also awarded contracts to manage clusters of schools (see School Reform Commission).

As the District decides what to do in Year 2 and renegotiates contracts with its outside managers, the changes this spring are less dramatic — so far.

District officials maintain that it is too early to say whether the managers are improving schools, yet the experiment is being expanded to some additional schools.

Three of the EMOs — Temple, Foundations, and Victory — will each be managing one additional school in the fall. One private company, Chancellor Beacon Academies, will be losing its contract to manage five schools; District officials said the company hadn’t established a presence in those schools.

"We said we’d be making adjustment or changes after the first year based on what we had seen and what we had experienced, and we’ll be making adjustments next year too. It’ll all be tied to our overall evaluation of their performance," CEO Paul Vallas said.

The biggest private manager, Edison, managed to hold onto all its schools, despite speculation to the contrary. But Edison is not happy with the amount of money the District is offering for Year 2 of their contract and has been seeking out allies in Harrisburg to garner support on this contract dispute.

Big gifts to legislators

Officials of several EMOs, including Edison, have contributed thousands of dollars to the campaign chests of key state legislators like John Perzel, Dwight Evans, and Anthony Hardy Williams (see Money Talks). Perzel and other legislators have expressed concerns about the treatment of EMOs in Philadelphia.

Vallas said he has met with legislative leaders and received some letters from legislators expressing concern about his decision to cut the extra per pupil funding that EMOs have been receiving. Vallas explained that he wants to "spread the resources more broadly" — redirecting about $10 million of that EMO funding to pay for improvements in high schools, which were left out of last year’s reform plans.

Schools run by Edison have been getting $881 per student more than other District schools. In contrast, Temple and Penn schools have been getting only $450 extra per student. Vallas has said he wants to level the extra funding for all the privately managed schools at about $450 per pupil. For Edison, the difference represents almost $6 million.

State Senator Anthony Hardy Williams of West Philadelphia, one of the few local elected officials who backed former Governor Mark Schweiker’s push for privately managed schools, told the Notebook he has heard from Edison about their concerns. He said he has not spoken to Vallas about EMO funding, but he said he believes Vallas "didn’t follow what we asked him to follow."

According to Williams, when Vallas was hired, "he was supposed to execute on the package that was already delivered from Harrisburg." At the insistence of then-Governor Schweiker, the package of increased state aid that arrived last summer directed much of the extra state funding to schools that were privately managed.

Vallas confident

Vallas said he expects to prevail on leveling the extra funding. "I don’t feel pressured at all," he commented about his conversations with legislators. "When people ask me questions and I give explanations, we move on."

He said so far Edison is the only EMO that is holding out. "If the EMOs can’t do it for $450 extra per pupil, then let’s find an EMO that can," he said.

"Hasn’t their argument been ‘We can do better with the money you have’?" he observed.

Vallas can respond to advocates for private management by pointing to his efforts to explore additional management contracts and partnerships, particularly with universities.

Earlier this year, Vallas had said that he expected the number of privately managed schools to go down. By April, when decisions were made about which EMO contracts to renew, the numbers remained about the same. In May, Vallas said he expected to match up 10 to 15 additional schools by the fall with outside partners that might play a more low-key role in management than the Edison model.

Vallas said he will be announcing partners for the system’s new high schools and for the middle schools that are converting to high schools. "I’m searching for new management partners that can bring tremendous resources to the table," he said.

The District has received applications from seven more prospective school managers. This process brought Charles Zogby, the center of controversy a year ago as the state’s Secretary of Education, back in the picture. Zogby, who developed the state’s blueprint for privatization, now serves as senior vice president of K12 Inc., a for-profit education company that is expected to be prequalified as a possible manager of schools.

Some say there has not been enough emphasis on EMO accountability to ride herd on the private management companies and counteract their influential backers.

"The standard for EMOs has become, ‘If they’re not hurting anybody, it’s okay," said one close observer. "But what extra are we getting from the millions of dollars we are putting into this?"

Privatization decision reversed

Grassroots voices are still part of the equation. T.M. Peirce School in North Philadelphia, slated by the SRC to be turned over to Victory Schools, will be District-run again next year. After protests from the school, CEO Paul Vallas reversed course, acknowledging that the school was making good progress under its current principal, operating within the District.

The initial decision that four schools — Peirce, Meade, Rhodes, and King — would be turned over to private management was made by the SRC on the very day those plans were announced. This led some to question whether there is adequate opportunity for the opinions of those most directly affected by management changes to be heard.

Aldustus Jordan of Philadelphia Citizens for Children and Youth urged the commission to "establish a formal process for allowing for the voices of the stakeholders to be heard before decisions are made involving the takeover of schools."

The SRC did agree to make the four conversions to private management contingent on parent and community input, and Vallas subsequently reversed the decision on Peirce.

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