June 20 (Bloomberg) -- Pennsylvania’s Senate passed a measure to let the state take over fiscally distressed school districts and make charter conversions easier, a provision that spurred opposition from teachers.
The bill, which would permit the appointment of a chief recovery officer to develop a plan for a school district whose finances trigger oversight, passed 27-21 yesterday. A receiver would be named if district leaders reject the blueprint, and conversions to charter schools could be implemented based solely on the recovery proposal, if they provide savings.
“This bill is ideologically driven, hidden under the name of distressed schools that is about driving an agenda for charters and hurting unions,” Mike Crossey, president of the 187,000-member Pennsylvania State Education Association, said by telephone. The bill passed the House of Representatives earlier.
Charter schools can ignore district union contracts. Provisions easing charter conversions don’t often show up in laws aimed at helping right the fiscal affairs of local boards, Mike Griffith, a senior policy analyst at the Education Commission of the States, said by telephone.
While most states have protocols for helping distressed schools, they rarely extend oversight beyond fiscal issues to include such steps as charter conversions, said Griffith, whose Denver-based nonprofit group provides education research. Michigan, for one, gave emergency school-district managers such greater powers, he said.
“It’s less common that you give an emergency fiscal manager the ability to completely restructure a school district,” Griffith said.
The move comes as Pennsylvania schools, like others across the country, are coping with lower revenue from reduced property values and cuts in state aid, according to Naomi Richman, a managing director in public finance at Moody’s Investors Service in New York. She called it the “biggest test since the Great Depression” for districts.
“The state has an interest in making sure its own money is being spent in a responsible way by different school districts,” Richman said in an interview. Education is often one of the biggest expenses for state governments.
The bill doesn’t grant more direct state aid to schools, while making loans available, which Crossey said is “laughable.” Fiscally strapped districts are already in debt, said the Harrisburg-based union’s chief.
“This is a start down that road to get our districts straightened out financially so they can focus on what is their primary mission, and that is to provide to the kids in this commonwealth an academic setting where they will succeed and be lifelong learners and successful citizens,” Senator Jeffrey Piccola, a Dauphin County Republican who leads the Education Committee, said in debate before the vote.
Labor opposition softened after amendments removed provisions to let distressed districts cancel union contracts and curbing the right to strike. Changes also limited the number of districts that could be placed under state oversight at any one time.
The vote sends the bill back to the House, where lawmakers must concur with the Senate’s version before the bill can go to Governor Tom Corbett, a Republican who backed the measure. He’ll review the Senate’s amendments, said Janet Kelley, a spokeswoman. Both chambers are led by Republicans.
The measure would require the state education department to track the fiscal condition of school districts. Four -- Chester-Upland, Harrisburg, York, and Duquesne -- would qualify for oversight under the criteria in the bill.
A previous state control board left the 6,800-student Chester-Upland district with $25 million in debt in 2010, Thomas Persing, the acting deputy superintendent, said by telephone. Federal and state budget cuts have resulted in a loss of $23 million and a 30 percent reduction in employees in the past two years, he said. The district is suing the state in U.S. District Court, seeking more funding.
“This is just another way to avoid recognizing what is truly needed, finding an adequate revenue source that’s sustainable,” Persing said, calling the bill “old wine in new bottles.”
Saving money shouldn’t be the sole reason to set up charter schools, said Alex Medler, vice president of policy and advocacy of Chicago-based National Association of Charter School Authorizers, which works toward creating quality charter schools. He cautioned that making financial savings a key criteria sends the wrong signals to school operators.
“You should not approve the lowest bidder for a charter by any means so you can save money,” Medler said. “To do so is to set them up to cut too many corners.”
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