School & District Management

It’s Official: State Takes Over Philadelphia Schools

By Catherine Gewertz — January 09, 2002 8 min read
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Philadelphia’s 200,000 students returned from winter vacation last week to the same desks and books they had 12 days earlier. But a profound change had occurred while they were gone: The state took charge of their schools and embarked on what is sure to be one of the nation’s most scrutinized educational experiments.

The Dec. 22 takeover of the nation’s eighth-largest school district places perhaps two historic mantles on Philadelphia’s shoulders. It is the largest district ever to be taken over by a state. And if, as expected, a company is hired to run dozens of its worst-performing schools, Philadelphia will host the largest-scale privatization of public schools ever undertaken.

“Everyone will be watching to see how they do,” said Kathy Christie, a policy analyst at the Education Commission of the States, a state-policy research group in Denver.

Pennsylvania and Philadelphia leaders have wrangled for years over how to ease the district’s considerable fiscal and academic woes. But, on Dec. 21, a few hours after classrooms emptied for the holidays, the governor and the mayor emerged from weeks of sometimes bitter negotiations with a plan for overhauling the district.

Gov. Mark S. Schweiker, a Republican, and Mayor John F. Street, a Democrat, agreed to turn over control of the district’s 264 schools to a city-state commission and to infuse $120 million in new money annually into the district. Its $1.7 billion budget is $216 million in the red this year.

The two men shook hands, hugged, and praised their partnership as they announced their plan. But there was little doubt that it was a state takeover. That evening, state Secretary of Education Charles B. Zogby signed a “declaration of distress,” triggering Act 46, the state’s school takeover law.

The new “school reform commission” that will run the district has some big decisions to make.

Two of its most pivotal decisions will also be its most controversial. The commission must decide whether to give Edison Schools Inc., the country’s leading for-profit manager of public schools, a six-year, $101 million contract to become a district consultant, and whether to permit the company to run 45 of the city’s neediest schools in partnership with community groups. Gov. Schweiker backs both of those ideas.

As part of the agreement, state officials promised city schools a million new books, improved curricula, new paint, bonuses for principals, training for teachers, and extra pay for 1,200 or more mentor teachers. The state also plans to pare the district’s teaching force by as many as 500 positions, mostly through attrition.

Local opposition to a role for Edison has been intense. Labor unionists, students, teachers, and parents held demonstrations over the issue. They criticized the New York City-based company for its profit-seeking status and what they say is its mixed record in schools elsewhere.

Edison has attempted to weather the criticism with a public relations blitz to persuade Philadelphia it could help “reinvent” public education, and by emphasizing company officials’ optimism that they can improve the city’s most challenged schools. “We’re excited and anxious to get to work,” said Edison spokesman Adam Tucker. “Our hope is to be opening 45 reinvigorated schools in the fall.”

Whether Edison gets that job will be up to the commission, but its first appointee thinks highly of the company. Gov. Schweiker named as the interim chairman James E. Nevels, a suburban businessman who serves on the control board of the Chester-Upland district south of Philadelphia, where Edison runs nine of the 13 schools as part of a 2-year-old state intervention.

Mr. Nevels called Edison a “great” company, but pledged that the panel would follow an open process in choosing contractors.

Gov. Schweiker is entitled to three appointments to the oversight commission, while Mayor Street gets two. All appointees are to be in place by Jan. 21. The commission, which replaces the nine-member school board picked by the mayor, must also tap a chief executive officer for the district.

After the August 2000 resignation of Superintendent David W. Hornbeck, the district adopted a corporate-style management model, and hired Philip R. Goldsmith as interim CEO. He resigned in December, furious at the idea of Edison playing a significant role in the schools.

Years of Problems

The recent developments are the culmination of events in the past decade that aggravated Philadelphia’s school problems.

In 1993, Pennsylvania legislators froze the state’s school aid formula. Meanwhile, Philadelphia’s population of poor and immigrant students climbed, its tax base dwindled, and state support—which accounts for 60 percent of its budget—failed to keep pace with inflation, experts say.

In 1998, then-Superintendent Hornbeck threatened to close the schools if the state didn’t raise funding. The legislature responded by enacting a law allowing seizure of the district if it fell into academic or financial “distress.” Over the years, the district borrowed from banks, the state, and its own pension fund, but its financial ills persisted.

In response to lawsuits demanding a more equitable school funding formula, the state supreme court in 1999 ruled the solution lay with the legislature. While lawmakers continue to discuss the issue, they have made no major changes.

Last summer, however, then-Gov. Tom Ridge agreed to provide enough aid to keep the Philadelphia schools operating while he and Mayor Street explored ways to resolve the district’s problems. Mr. Ridge, a Republican, commissioned Edison to conduct a $2.7 million study of the district, which became the basis for the plan ultimately put forward by his successor, Mr. Schweiker.

As the Philadelphia schools enter a new era, many uncertainties hover. Where, for instance, will the city get the $45 million a year in new money it has promised to give the district? Will state lawmakers approve the $75 million in new aid Gov. Schweiker promised in a year when the state projects a $622 million budget shortfall?

One certainty is that opposition to Edison will continue. Foes have vowed to keep up the pressure in the streets, by staging demonstrations, and in the courts. On Dec. 27, a state judge rejected their attempt to bar contracts between the school reform commission and Edison. The plaintiffs argued that such agreements would violate state conflict-of-interest laws.

Another pending lawsuit seeks to invalidate the state’s school takeover law as unconstitutional.

Noting that state interventions in local districts have had mixed results, policymakers and others are watching Philadelphia.

Shifting governance in such a big district, where 80 percent of students are from low-income families, is particularly daunting, while the added twist of large-scale privatization promises more uncertainty, said Ms. Christie of the ECS.

“Large urban systems are simply more difficult entities in which to cause change,” she said. “And as much as we’d all like to believe private management can help, private management of districts in the past hasn’t had a particularly strong track record.”

She cited Minneapolis, which in 1993 took the pioneering step of hiring Public Strategies Inc., to head the district’s central management. The school board ended the arrangement in 1997 amid disappointing student test scores and doubts about the private firm’s ability to implement its plans.

Nonetheless, various forms of privatization are cropping up with increasing frequency to combat school failure. Ms. Christie noted a new Colorado law that puts failing schools on a path to become independent charter schools if they don’t improve over time.

Ready for the Heat?

If history is any guide, Pennsylvania may have mixed results in Philadelphia.

Frederick M. Hess, an assistant professor of education and government at the University of Virginia in Charlottesville, said states that have taken over districts—such as New Jersey, which seized Jersey City, Paterson, and Newark between 1989 and 1995—have generally found fiscal and managerial improvements easier to make than academic ones.

“A state has all the leverage it needs to clean up a fiscal mess, but they are dealing with more constraints when they try to tackle academic problems,” Mr. Hess said. “Educational problems are harder to fix. The solutions aren’t as clear. And a state also has to deal with federal regulations, teacher unions, and cross-cutting interest groups they are not willing or able to shrug off.”

In a troubled school system such as Philadelphia’s, he added, replacing 30 to 40 percent of the administration and scores of teachers would “probably be a good idea.” But he predicted that the reform commission would find such a move politically untenable.

“Good management decisions sometimes involve people getting deeply hurt. But private firms don’t have to maintain majority support in the community,” Mr. Hess said. “In the case of a democratic system, those who lose have recourse. They contact their legislators. They make noise.

“The question is,” he said, “will the commission be willing to withstand that heat when political leaders have a lot of irate constituents?”

The most skeptical observers believe the key product of the Pennsylvania-Philadelphia partnership will be political insulation, rather than educational improvement.

“What’s really happening here is that neither [Gov. Schweiker nor Mayor Street] wants to have sole responsibility, because in the short term, real reform is always a loser,” said Larry Ceisler, a longtime Philadelphia political consultant. “It’s not that they don’t want to share responsibility. It’s that they don’t want to have sole blame.”

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A version of this article appeared in the January 09, 2002 edition of Education Week as It’s Official: State Takes Over Philadelphia Schools


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