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Published in Print: March 7, 2001, as Fiscal Ills Persist in Philadelphia Despite Political Shifts

Fiscal Ills Persist in Philadelphia Despite Political Shifts

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In some respects, Philadelphia is a different city than it was just over a year ago.

The mayor is barely into his second year in office, and the leaders of the city's school system are new, too. Not only have the names changed, but a dramatic thaw also has occurred in relations between the gritty Democratic stronghold and the Republicans who control the Pennsylvania governor's mansion and legislature in Harrisburg.

Yet when it comes to the fiscal woes that haunt the city's schools each year, far less has changed. Local school officials are expected to unveil a budget plan this week for the 208,000- student district that will project a shortfall of about $200 million—just under the gap that the district faced last year.

That raises a big question among many observers: Will the political détente between Mayor John F. Street, a Democrat, and Gov. Tom Ridge, a Republican, lead to a windfall for the city schools in the next state budget?

"The tone of conversation has definitely improved," said Shelly Yanoff, the executive director of Philadelphia Citizens for Children and Youth, a local education advocacy group.

She's less optimistic about funding, though. "People are talking the talk, but they're not really walking the walk," she maintained.

The size of the steps and the length of the journey also matter, said Debra Kahn, the city's education secretary. "The school district's financial problems are big," said Ms. Kahn, who is the mayor's representative on education. "It's taken us a number of years to get here. It's not going to be resolved in one budget year."

Warmer Relations

Philadelphia's budget problems are much like those of other urban districts with declining tax bases, teacher shortages, and influxes of students with demanding learning needs. Leaders of Pennsylvania's biggest school district also face the familiar challenge of getting the ear of powerful lawmakers from suburban and rural areas.

But spending had become an especially rancorous issue in Philadelphia, particularly after the district and the city joined a federal civil rights lawsuit alleging that the state's school aid formula discriminates against the city's minority children.

Since taking office in January of last year, Mayor Street has toned down the rhetoric and reached out to Gov. Ridge and other Republican leaders, who felt that the lawsuit had cast them as racist.

"There have been more productive conversations in the last year under Mayor Street and his administration than there had been in the previous five," said Dan Langan, the spokesman for the state department of education. "That's a very positive development."

The cozier ties helped Philadelphia's schools keep their doors open last spring after the governor and the mayor negotiated a settlement to help the city schools overcome a projected $204 million deficit. ("Settlement Averts School Shutdown in Philadelphia," June 7, 2000.)

Under the pact, the district and the city postponed the lawsuit for a year, while the governor gave the district a one-year pass on paying back nearly $60 million it owed the state.

Following the settlement, the district's combative superintendent, David W. Hornbeck, quietly stepped down. Most observers agree that the departure of Mr. Hornbeck, who was a relentless critic of state spending priorities, also led to more amicable communications between the city and the state.

Charter Potential

But Philadelphia has taken other steps to show Harrisburg that it's willing to try some approaches to improving the district that have been championed by Republicans.

Last October, the city's board of education named Philip R. Goldsmith, a former bank executive and management consultant, as the district's interim chief executive officer.

Mr. Langan of the education department confirmed that Mr. Goldsmith had been on the state's short list of people who could have been tapped to run the district if it had run out of money last summer and, in turn, triggered a takeover by the state.

Just last week, in another example of reaching across the political divide, Mr. Street sat in the gallery with first lady Laura Bush while President Bush gave his first speech to a joint session of Congress.

Mr. Bush—who lost Pennsylvania in his White House bid owing, in part, to the large turnout among Democrats in Philadelphia—acknowledged the mayor and said he looked forward to visiting Mr. Street's city for a close-up look at its faith-based social programs. Ms. Kahn said the mayor attended the speech as a show of support for Mr. Bush's plan to make it easier for religious organizations that provide social services to receive federal funds.

Most recently, Mayor Street told ThePhiladelphia Inquirer he was open to creating more independently run, public charter schools—an option favored by Gov. Ridge.

"Charter schools have a huge potential to help hold on to the middle class and provide an educational opportunity that does not exist," Mr. Street said. Philadelphia already has 34 charter schools, with a combined enrollment of 14,000 students. But the schools come at a cost to the district of some $67 million a year.

'Wolf Is Coming'

It remains unclear, though, just how the shifts in Philadelphia's policy priorities, as well as the muted rhetoric, will play out during the budget cycle in Harrisburg, which got under way last month.

To be sure, some change is already evident. Gov. Ridge's budget proposal for fiscal 2002 includes $66.4 million in new state funds for the city. That addition would raise the state's share of district revenue by 8 percent over last year's amount, to 60 percent of the district's projected $1.6 billion budget.

"The mayor's reaction was positive," Ms. Kahn said of the plan. "In light of the steps we've taken, we hoped the governor would look favorably on Philadelphia, and he did that."

But the offer comes nowhere near to closing Philadelphia's gaping school spending deficit. And there is a long history of legislative ambivalence toward the city that will be hard to overcome.

"There's forever a degree of hostility toward Philadelphia," said Thomas Gentzel, the assistant executive director of the Pennsylvania School Boards Association. "It's a shame, but no matter how hard they [in the city] try, they don't get much credit in the minds of a lot of people."

Majority Leader John M. Perzel of the Pennsylvania House of Representatives, a Republican, said the City Council—which approves the school district's budget—could do more. "They build a $30 million practice facility for the Philadelphia Eagles [football team], but they don't seem to have any more money for education," Mr. Perzel said.

The perennial budget crises also raise a question of credibility, added Ted Kirsch, the president of the city's affiliate of the American Federation of Teachers. "It was like the little boy calling wolf," he said. "Well now, the wolf is really coming."

Ms. Kahn, the mayor's education secretary, hopes those questions will be put to rest this week when city and district leaders release their long-term budget plan for the school system.

"We aren't pointing fingers. We're explaining the revenue picture and what it's been like over the last several years," she said of the plan. "What remains to be written is the all-important final chapter: How do we close the gap?"

Vol. 20, Issue 25, Page 8

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