Money woes could delay opening of city schools

Facing a still-massive deficit, the Philadelphia School District will not open on time unless it has assurance by Aug. 16 that it will receive $50 million from the city, Superintendent William R. Hite Jr. said Thursday.

Hite said the district would postpone the scheduled Sept. 9 opening of 212 district schools, open just a few, or operate them on half-day schedules because of the financial crisis that led to the layoffs of nearly 4,000 employees.

Flanked by several high school principals, Hite said it would be irresponsible to try for a regular school opening with only skeletal staff and no assurance the district would receive more money.

Hite's unprecedented announcement unleashed a torrent of confusion and exposed a rift between Mayor Nutter and Council members who oppose the terms of a state bailout package for the schools. Council President Darrell L. Clarke called the state package "a bad deal" and floated a plan for the city to give the district $50 million in return for unused district buildings.

Nutter and others had backed a state plan that called for the city to borrow $50 million against future collections of the city's extra 1 percent sales tax, which was set to expire next June, and turn the money over to the schools.

Nutter called Hite's comments "one of the most chilling statements that I've ever heard a school leader . . . make."

Hite's stunning announcement comes as the district continues to grapple with a deficit of more than $270 million. Delaying the opening of school would affect 136,000 students and their families.

"I want to be clear about why the $50 million matters now," Hite said, adding that the amount would allow the district "to tell parents that when their child is walking through the hallways, eating lunch, or at recess, an adult will be supervising them. It allows us to tell parents that counselors will be available to serve children in our largest and neediest schools, and that an assistant principal will be on hand to resolve any disciplinary issues that keep children from learning."

Because of massive layoffs in June, each school has a principal, a secretary, and fewer classroom teachers. Schools have no counselors, assistant principals, noontime aides, or other support staff.

"We talk about the $50 million as being necessary - not sufficient, but necessary - in order to open schools," Hite said.

Helen Gym, a founder of Parents United for Public Education, agreed with Hite's stance.

"Without the necessary personnel to staff them, our schools are not safe and are not fit for opening," she said. "Parents demand that the mayor and City Council work together to ensure an immediate infusion of $50 million in local support."

Jerry Jordan, president of the Philadelphia Federation of Teachers, noted that his union has been saying for months that it would be impossible to open schools.

"The district is now finally acknowledging the severity and scope of this reality," he said. "We hope our elected leaders in the City of Philadelphia and Harrisburg are equally troubled by this situation and will quickly live up to their obligation to adequately and sustainably fund our public schools."

Faced with what was then a $304 million deficit, in June, the district had asked for $60 million in additional money from the city and $120 million from the state, with the rest to come from savings from union concessions.

The bailout package hashed out in Harrisburg contained little new state money, but could provide as much as $140 million for the schools, including funds from the city's borrowing, revenue from improved city tax collections, and one-time $45 million grant from the state.

But the state money is not certain. Under the terms of legislation finalized last month in Harrisburg, those funds are contingent on the education secretary's finding that the district has obtained sufficient reforms and concessions from the teachers' union.

Contract talks are continuing with the 15,000-member PFT, whose contract expires Aug. 31.

Asked about those talks, Hite said: "We are getting closer and closer. . . .

"We have been in negotiations for some time now," he said. "The meetings have become more frequent, and I'm hopeful of a resolution as quickly as possible."

Jordan, the PFT president, who had just left the bargaining table Thursday afternoon, disagreed with Hite's assessment.

"We are not close at all," Jordan said. "We are very far apart."

He said he could not comment on specifics.

Among other things, the district is seeking wage cuts, longer work days, and employee contributions to health insurance. It also wants to give principals more power to select school staff.

Hite, the mayor, and others underscored the importance of unions in providing savings to the schools.

"I want to emphasize that our labor unions still play a huge role in shaping what our schools can look like this fall," Nutter said. "On the labor side, these are essentially the only adults at the table who so far have yet to financially contribute to a solution for this crisis. . . . It is time for the PFT to step up."

On the necessity of going ahead with the plan to borrow $50 million against the sales-tax extension, as outlined by the state, Nutter said: "We must use the tools that we have at our disposal right now so that our schools can open safely and on time on Sept. 9. To do anything less would be irresponsible."

The mayor called on Council to act. "City Council needs to pass the 1 percent sales-tax extension," he said. "We need to know, literally, by the end of next week . . . that that action will be forthcoming."

Clarke called the state bailout package, which dictates how the sales-tax extension must be divvied between the schools and the pension system, "a bad deal."

Under the state plan, starting July 1, 2014, sales-tax revenue would pay the schools $120 million, $15 million for four years to pay back the $50 million loan and interest, and would give the rest to the city pension system.

Clarke believes the city could borrow the $50 million without adopting the state plan. He proposes an even split between the schools and the pension system in future years.

"If we don't solve [the pension problem] . . . we could quickly be following some of the other cities who are finding themselves in some significant financial situations," he said, alluding to Detroit's recent bankruptcy.

Instead of giving the district $120 million of the sales-tax proceeds, Clarke proposes that the city buy school district assets - essentially unused buildings and real estate - for $50 million. The city would earn the money back over time by reselling those properties to developers and other groups.

He said Council members understood the school district's pain and the urgency to do something now.

"We propose that we proceed with upfront cash to the school district to deal with their short-term problem and be in a position to sell those properties and dispose of them for significant use in these neighborhoods."

Clarke said there was school property in his Council district and in others that have "been sought by developers and other entities."

Nutter's spokesman Mark McDonald called Clarke's proposal "bad public policy" and said: "It has all the earmarks of something pulled straight from the hip."

He said it would not be prudent for the city to buy school buildings with no immediate plans for their reuse.

"The one sure, guaranteed path for $50 million for the school district is City Council and the mayor agreeing to support, as soon as possible, the sales-tax law," he said.

Late last month, Hite said the district would use $33 million in district savings and assured new funding to recall laid-off music teachers and school secretaries and to restore fall sports programs that had been axed.

He said the $50 million from the city would enable the district to call back nearly 1,000 employees, including counselors, noontime aides, and some assistant principals.

But Hite added: "There is not a scenario that brings back everyone who was laid off."