Settlement Averts School Shutdown In Philadelphia

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An agreement hammered out last week between top state and city officials will give Philadelphia enough money to keep its schools open this summer and avoid a state takeover.

To close the deal, the city's school board agreed to cut $30 million from its 2000-01 budget and postpone a federal lawsuit charging that the state's school aid formula discriminates against minority students. That portion of the agreement requires the approval of the judge overseeing the case.

While the terms seemed too costly to some observers in the district, no one seemed to miss what might be the deal's real silver lining: Two weeks ago, Gov. Tom Ridge talked seriously about taking over the city's schools. By week's end, however, he and Mayor John F. Street were praising each other and promising to collaborate on solving the school district's annual budget shortfalls.

"I believe Mayor Street is serious about improving education, and I believe he is serious about budgeting responsibly," the Republican governor said in a statement. "I'm committed to those same goals. Today, we work toward them together."

Mayor Street, a Democrat, echoed the sentiment. "This agreement gives us a year to come up with the long-term solution that is needed," he said. "Now we can stop talking about state takeover and start talking about state and local cooperation."

One observer pointed out, however, that the governor had not extended his support for higher school funding statewide. "This has been between the governor and the mayor," said Shelly Yanoff, the executive director of Philadelphia Citizens for Children and Youth, a nonprofit advocacy group. "He's not going around the state saying we need more money for schools."

The Deal

The funding plan was announced as the Philadelphia school board approved a $1.6 billion budget for fiscal 2000-01, just hours before the May 31 deadline.

Mayor Street had predicted that without some kind of a deal, the 212,000-student system could have run out of money in July, forcing it to shut down and likely triggering a 1998 state takeover law. Those issues are moot, at least for now.

Under the deal reached last week, the state will advance the district $363 million of its $666 million basic education grant for 2000-01 by August, with the rest coming in monthly payments. Another $59 million in district payments to the state, for items such as overestimating enrollment, will be deferred a year.

The combination of those two concessions will allow the district to earn up to $10 million in interest payments, for a total savings of about $69 million, Gov. Ridge pointed out.

In addition, Mayor Street promised to increase city funding for schools by $20 million. Meanwhile, the school board reduced the district's budget by $30 million. While student services will be spared in the cuts, the district will spend less next year on staff development, adult education, and administration.

"Nobody is celebrating these cuts," said Alexis Moore, a spokeswoman for the school district. "There's a certain amount of relief and resignation. People understand we're about keeping the schools open all year."

There was also a sign of hope for better relations on the school funding issue between the second-term governor and Philadelphia's outspoken new mayor, who was elected last fall.

"For the first time in years, we see some acknowledgment that the state is responsible for the fate of children in Philadelphia," said Nancy McGinley, the executive director of the Philadelphia Education Fund, a nonprofit group that promotes improved student achievement. "That is the most positive signal. At least publicly, two key leaders have agreed to be on the same page."

Mr. Street has also been more forceful than his predecessor, Democrat Edward G. Rendell, in his demands that the state raise the level of aid for the city's schools closer to that of the suburbs.

"The political and financial responsibilities need to be spread out, and it's appropriate for the mayor to take this on," said Debra Kahn, Mr. Street's education secretary.

Vol. 19, Issue 39, Page 3

Published in Print: June 7, 2000, as Settlement Averts School Shutdown In Philadelphia
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