Charter schools now getting 30 percent of school budget... Philadelphia schools facing 'Doomsday Budget' eliminating most school positions

On Thursday, May 30, 2013, the Philadelphia School Reform Commission adopted for the Philadelphia School District what the local media has dubbed a “Doomsday budget” for the next fiscal year. The School Reform Commission is the body that has managed the School District since Pennsylvania took over the District in 2001.

Protest against the Philadelphia "Doomsday Budget". Photo by Brian Cohen.Due to a $300 million "structural deficit," the $2.39 billion budget eliminates all staffing in the schools except the principal and a minimal number of classroom teachers. If funding is not found, gone will be Counselors, librarians, sports, secretaries, support staff, music and art.

When the School District was taken over in 2001, the Philadelphia School District had a deficit of $216.7 million dollars in a $1.7 billion budget.

The takeover plan had six main parts: putting the district under the control of a School Reform Commission; hire a CEO; enable the CEO to reform the teaching staff by hiring non-certified staff, reconstitute troubled schools by reassigning or firing staff; allow the commission to hire for-profit firms to manage some schools; convert some schools to charter schools; and reallocate and redistribute school district resources.

The initial plan was for Edison Schools, Inc. to take over 64 schools, but this failed within two years.

With the failure of this privatization plan the state and city began turning over the management of some of the lowest-achieving schools to for-profit and nonprofit organizations and two local universities and providing additional resources to the private managers. Besides Edison, these included Foundations Inc., Victory Schools, Universal Companies, Temple University and the University of Pennsylvania. This systematic starving of the public schools in favor of the growing charter sector has continued for the past ten years.

While state funding to the district increased during the later part of the 2000’s under Governor Ed Rendell, this increased funding, and temporary funding from federal stimulus money, was devoted to School Superintendent Arlene Ackerman’s "Imagine 2014" initiative which poured money into charters, Promise Academies, and Renaissance Schools.

Ackerman, who was on the board of the Broad Foundation while she was Superintendent of Philadelphia public schools, drew up this five-year strategic plan for the District in 2008. She was forced to resign after three years in the fall of 2011, however, by Philadelphia Mayor Michael Nutter when she came into conflict with the Mayor over which charter management company would get ownership of Martin Luther King High School. Her buyout was $905,000 and $86,000 of unused vacation pay. A few months after resigning, she filed for unemployment that was denied. She passed away February 2, 2013 after a short bout with pancreatic cancer.

During the more than one-year interim after Ackerman left, after which the current Superintendent, William Hite took over the district (Broad Superintendents Academy Class of 2005) the Imagine 2014 plan went forward.

Outside corporate management companies where brought in to implement the plan by the Philadelphia School Partnership (PSP). The PSP were outside the District managers hired by local wealthy philanthropists such as the William Penn Foundation to draw up the strategic plan for privatization. Most prominent was the Boston Consulting Group that had experience in raiding and decimating companies in the corporate world. (For details see “Who is killing Philly schools” by Daniel Denvir in the Philadelphia City Paper and ).

Under the guidance of PSP, the charter portion of the School District budget has gone from 15% in FY09 to 30% in FY14. More than $670 million of the budget goes to charter schools.

The other factor in the crisis has been the ALEC inspired agenda of Pennsylvania Governor Tom Corbett. In his first year in office he cut education funding by $1 billion, with the deepest cuts being made in low-income districts. Philadelphia has had to make do with $300 million less in funding for the last two years. At the same time Corbett increased the prison budget by $700 million dollars. His Department of Education has worked to give cyber charters and charter management companies every advantage. Over the past few months, charter companies have been in conflict with the SRC over contractual enrollment caps. They have been increasing enrollment over these caps and then going to the state Education Department that takes the funds out of money allocated for Philadelphia public schools. 21 charters want 15,000 new seats, which the District estimates would cost it about $500 million over five years.

Finally, a major part of the budget crisis is the huge financing costs of the debt accumulated over the last ten years. The district’s annual debt-service obligation is up 32% from five years ago. Half of that debt, $159.9 million, goes to interest. According to 2011 Census data, districts nationwide paid an average of $155 per non-charter pupil on debt service. Philadelphia spends $1,684 per non-charter student. (See Philly Schools’ Debt Service Is 10 Times National Average by Daniel Denvir )

Last year the District borrowed $300 million to cover the deficit that year. The interest for that loan is $22 million annually for 20 years. Before the 2008 banking crisis, the District entered into $3.5 billion in variable rate bank swaps. The School District is due $186 million because they bought variable rates instead of fixed rates.

On March 7th, 2013 the School Reform Commission implemented the school closings portion of the Imagine 2014 plan. Following the timeline and methods outlined in the Broad Foundations 2009 “School Closure Guide: Closing Schools as a Means of Addressing Budgetary Challenges” they held a series of community meetings over three months where students, parents, and teachers unanimously begged for their schools to spared. On March 7th after two more hours of these pleas, in an atmosphere that resembled a Greed tragedy – except this was real, the SRC voted to close 24 community schools.

On Friday, May 17th, over 2,000 high schools students, organizing through Twitter and Facebook, walked out of class and marched on City Hall and the school District administration building to protest the schools crisis. See “Thousands of students are marching on City Hall protesting budget cuts, Philadelphia Public School Notebook” at

To reduce layoffs and cuts in resources the District is calling for “shared sacrifice” by members of the Philadelphia Federation of Teachers of $133 million in wage and benefit concessions when the PFT contract expires August 31st. In addition, they want to eliminate seniority, class size limits, and other concessions. School operating budgets have been reduced 25% from the already austere budgets of last year.

Before the SRC vote on the budget, hundreds of protestors gathered in front of the school administration building to protest the cuts. Philadelphia Federation of Teachers President Jerry Jordan said it would be immoral for schools to open in September with these cuts. What the PFT plans to do about this has not been disclosed. The 2001 state takeover bill makes it illegal for the PFT to strike.For two speeches to the “No Doomsday Budget” Rally go here:


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