The district is bankrupt. Its schools remain open only because teachers have agreed to work without pay. The district has blamed its situation on state funding cuts and the fact that it has lost almost half its students to charter schools.
Corbett said his administration was in the midst of discussions as to how to respond to the situation. Though his administration has already told the district it would not provide more funding, Corbett said various scenarios were in the mix, including creating a body like Philadelphia's School Reform Commission to run the district.
Asked whether a takeover was in the works, Corbett said that "could well be the case in Chester Upland, someone coming in and saying, 'You have to get your fiscal house in order; you can't be leaving millions of dollars of bills in a desk somewhere.' "
He added that Chester Upland officials were "complaining they don't have the money, but unfortunately, they didn't manage their money."
Thomas Persing, Chester Upland's acting assistant superintendent, said in response: "The governor has been ill-informed or misinformed about the true situation in Chester Upland. The board inherited a problem over which they had little or no control and have been made a scapegoat in this matter."
As for another round of state control, he said, "We had 16 years of state control that left us with close to $20 million in deficits. If anything, our financial condition was even worse because of it."
The lawsuit, filed Thursday morning against the state and legislative leaders, paints a very different picture from that outlined by Corbett.
It asked the court to order the state to keep the district funded for the rest of the year. The money, according to the suit, should come from aid now being diverted to pay charter schools and from state Education Department reserve funds.
From January to June 2012, it said, $36.3 million in state subsidies due the district are to be diverted to finance charter schools that Chester Upland students attend and to repay an $8.7 million advance the state made last year to the district.
Chester Upland, which had big cuts in state funding last year, used the advances on this year's funding to pay debts. The district ran out of money last week and will not be able to meet its payroll Wednesday.
The large number of district students who attend charter schools has further complicated Chester Upland's financial troubles.
State officials have said that they were obliged to pay the charters before sending any money on to the district, and that that used up all the state allocations. But the lawsuit cites a section of the School Code that says payroll obligations in school districts are "preferential claims."
The lawsuit went on to blame the state for the district's plight. It noted that the district was in state receivership from 2006 to June 2011. During that time, the suit alleges, the state failed to provide adequate oversight and direction while the district ran up millions in debt.
Contact staff writer Dan Hardy
at 215-854-2612, email@example.com, or @DanInq on Twitter.