Philadelphia Facing $1.1 Billion Gap May Close Schools

On a weekday morning at the Albert M. Greenfield School in Philadelphia, 21 first-graders painted their drawings of fish, glued the shapes on colored paper and affixed ribbons and buttons onto the bright creatures.

“That’s some nice texture,” said Tricia Benedetto as she guided the pupils, who call her “Miss Trish.” She is among dozens of parents who volunteer at the school after budget cuts led to the loss of its art instructor this year.

The school parents’ association raised at least $60,000 for the effort, Benedetto said. Its creativity will again be tested, as overseers of the district, the eighth-largest in the U.S. by enrollment, may close a quarter of its 249 schools by 2017 under an overhaul plan to save money. The proposal indicates a third of the district’s building space isn’t being used this year.

“Until things get more concrete, I try not to worry all the time,” said Michelina Hobbie, 25, the teacher for this class who is in her third year in the district. “There is a lot of speculation.”

“The show must go on,” Hobbie said. “The kids still need teachers.”

The School Reform Commission, a five-member board appointed by the mayor and Pennsylvania’s governor to run the district, plans to vote May 31 on a $2.5 billion budget. It forecasts a $218 million fiscal 2013 deficit with the cumulative gap rising to $1.1 billion through 2017, without changes, according to the proposed turnaround blueprint that calls for school closings.

Workers Protest

The plan spurred a union rally that began in front of City Hall and ended with a march to the district’s headquarters yesterday, shutting down streets and leading to 14 arrests, according to police.

“Everything falls on the working class,” said James Archie, 44, who held a large cut-out of a black coffin inscribed with “public education” at the rally. The city resident and father of three said he expects to lose his $48,000-a-year job as a school carpenter in September after 20 years of service.

As evidence of the need for change, in terms of performance, district officials point to test scores showing that about 58 percent third through 11th grade students are proficient in math, compared with 77 percent statewide. Reading scores also lag behind the state, at 52 percent proficient compared with 74 percent of Pennsylvania children.

“When you look at how the academics of our schools are rated overall with other large, urban school districts, we’re doing very poorly,” said Fernando Gallard, a schools spokesman.

Continuing Debate

The blueprint is subject to debate through the rest of the calendar year, including in public meetings. The commission estimates 207,700 students will enter classrooms in September, little changed over the past decade. Yet a shift is expected that could mean 40 percent of pupils will enroll in charter schools, which are district-funded, within five years, up from 25 percent now.

“The overall focus here is to provide better school choice for all children, no matter what type of public school it is,” Gallard said. “Charter schools are public schools, and parents have been voting for more schools that are high- achieving.”

Philadelphia’s finances have improved, leading to a credit rating upgrade of one step last month by Standard & Poor’s. The fiscal straits of the school district, which is independently supported by taxpayers, the state and federal government, pose a challenge to that turnaround. The municipality and district are “inextricably linked,” said Adam Weigold, a portfolio manager at Boston-based Eaton Vance Corp., which owns city debt.

Improving City Finances

“Philadelphia has gotten its house in order over the past couple years and is starting to finally stand on its feet,” Weigold said. “Whereas the school district is still operating at fairly big deficits and hasn’t improved in the same manner.”

If the school district raises taxes, Weigold said, the city “loses some flexibility” in its own levy decisions. A quarter of Philadelphia residents live in poverty, double the statewide rate, according to U.S. Census Bureau figures.

Labor contracts and state laws limit potential cost cuts, according to school officials. Debt service will take $261.2 million next year, about 10 percent of the budget. The district owes about $3 billion that is covered by a state program that can divert aid to make payments and protect bondholders.

By closing 40 schools next year, the district may save about $33 million annually by 2014. About 60 schools may be shuttered within five years, Gallard said.

Mounting Anxiety

Those slated for closure haven’t been named, causing “a lot of anxiety” among parents, said Jerry Jordan, president of the 15,000-member Philadelphia Federation of Teachers union. He questioned the planned pace.

“Does 40 in one school year make sense?” Jordan asked. “Will it cause blight in the neighborhoods?”

The turnaround plan also calls for decentralizing operations, clustering schools into “achievement networks” to be run by employees or nonprofit organizations, or a combination of the two. Managers of each group would tailor specific goals for their units, and be held accountable to results-oriented contracts, according to the blueprint.

Benedetto, 41, the art volunteer whose son, Maxwell Kell, 7, attends Greenfield, said she’s concerned about equal opportunity, depending on who runs a particular group of schools. “I just wish the money could go more toward the public-school system.”

Gailen Dougherty, who went to Greenfield and has two children there now, agrees “something has to shift.” She volunteers every weekday to watch the children during recess.

“I believe in it, and I pay for it,” she said about public education, as she watched groups of first-graders at play. “It’s our future.”

To contact the reporter on this story: Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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