Troubled R.I. District Becomes First To Request State Takeover

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A small Rhode Island school district that is on the brink of financial ruin has become the first in the nation to request a state takeover.

Observers say the move represents a sharp break with the longstanding American tradition of local control of public education.

State, city, and school officials last week signed a tentative agreement to turn the Central Falls schools over to the state July 1. If all conditions are met, full state operation of the district will take effect in July 1992.

"It came to a point of economics, what is in the best interest of all," said Mayor Thomas Lazieh. "We cannot provide [students] with the levels and quality of education that more-affluent communities have.''

Central Falls joins a handful of districts nationwide that have been taken over by their states. What distinguishes the 2,700-student Rhode Island district from the others is that it sought state control.

"There has never been, to my knowledge, another district that has voluntarily asked the state to take it over," said Melodye Bush, an information specialist at the Education Commission of the States.

In 1989, New Jersey was the first state to seize a district, Jersey City, primarily on the grounds of academic deficiency. Kentucky, Iowa, and California have undertaken similar moves, although Kentucky later backed off from its efforts.

Chelsea, Mass., surrendered management of its schools, but to a private institution, Boston University.

"This takeover is not precipitated by any kind of educational bankruptcy. As a matter of fact, there are some wonderful people in the Central Falls school district doing some wonderful things for kids," said Rhode Island's education commissioner, J. Troy Earhart. "It's strictly based on the city's growing inability to fund education."

Few details of the operational plan for Central Falls have been worked out. The coming year will serve as a transition period in which the state will manage the finances and develop a governance plan.

In the 1992-93 year, a special administrator will assume control from the acting superintendent and report directly to the state chief.

State officials say they want to turn the district into a system of demonstration schools. "I don't think there would be any reason to take over [other than financially] if you also weren't interested in making it a pilot district," said Mr. Earhart.

Without the state-city agreement, the district would have gone broke this week. The system had already gone through its $11-million appropriation for the current school year.

For the rest of this year, the schools will get $1.8 million in state loans and grants, along with a $280,000 payroll deferral to next fiscal year.

In addition to the district's immediate financial problems, Commissioner Earhart was preparing to render a decision that would have forced Central Falls to increase its tax rate, already the highest in the state, to fund basic requirements.

"The city has been using some patchwork techniques for several years that kind of papered over problems," said Daniel W. Varin, the state planning director, who headed a panel formed by the legislature to review the city's fiscal plight. "The key problem is that they simply have no room for growth in their tax base, whereas their expenses keep increasing."

Although Central Falls will no longer be responsible for any school finances after the 199l-92 school year, the city must comply with such measures as ceasing to borrow money from the private market and adopting formal budget procedures.

Mr. Varin said other Rhode Island cities eventually will reach the point where they cannot afford to provide education or other basic services. "All we've done here is buy a few years of time in which the state has to reconsider local government," he argued.

Property owners in Central Falls, the poorest city in the state, pay $54.75 per $1,000 of assessed value. Yet property owners are largely made up of landlords of low-income tenements in a square-mile city suffering from a dearth of industry.

Settled by Polish, Irish, and French-Canadian immigrants, Central Falls has experienced a large influx of Hispanics in recent years. According to the latest census data, slightly more than 5,000 of the 17,637 residents are Hispanic, while another 3,000 identify themselves as persons of "other races."

Many of the 2,700 children who attend the district's six schools and early-learning center need language instruction and other special services.

Moreover, a recent state report documented the lack of supplies and such equipment as computers.

Before the takeover agreement, state aid accounted for 86 percent of the district's budget. Central Falls had filed a funding-equity lawsuit against the state, which is likely to become moot. But officials think other districts will pick up the challenge.

Where the state will get the additional money to cover the costs is uncertain. Gov. Bruce Sundlun was scheduled to unveil his fiscal 1992 budget proposal next week.

Because of the recession that has gripped the region, educators say, the Governor is expected to call for cuts in elementary and secondary education of as much as 20 percent. Additionally, the state is reeling from a costly credit-union crisis.

Scott Wolf, the Governor's director of intergovernmental relations, said funding would come from existing resources. "The state already is providing the bulk of the Central Falls school budget," he noted.

M. Richard Scherza, executive director of the Rhode Island Association of School Committees, said the group was happy for the children of Central Falls. He added, however, "We do feel it's largely irresponsible to do this at the expense of every other school community. What this does is to almost reward some irresponsible political management in that city in the past."

Mr. Scherza said he was also concerned about the loss of local control and saw the takeover as a preliminary step to regionalization or statewide consolidation.

Some years ago, Central Falls residents approved a referendum to merge their school system with neighboring Pawtucket, but voters in that city rejected it.

At this time, Mr. Earhart said, no other school district meets takeover criteria. "Other districts are struggling, but they still have the potential of increasing taxes. They may not want to," he said.

"I've been saying for years that Rhode Island doesn't need 37 school districts." Mr. Earhart added.

Vol. 10, Issue 28, Page 1, 25

Published in Print: April 3, 1991, as Troubled R.I. District Becomes First To Request State Takeover
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