The legislation, whose main architect is Senate Education Committee chairman Jeffrey Piccola (R., Dauphin), comes in response to a series of fiscal meltdowns in districts across the state this year, foremost among them Chester Upland. It ran out of money in January and has accumulated a mountain of debt that has called its viability into question.
The three others that would immediately come under the law are Harrisburg, York City and Duquesne, near Pittsburgh — with more likely to follow. The legislation would create an "early warning" system to monitor districts sliding toward insolvency; benchmarks set by the state Board of Education then would trigger a distressed designation.
Currently, there is no official list of districts in, or headed toward, fiscal distress, but Piccola and other observers say at least a dozen and as many as 25 would be on such a roster, including large ones such as Allentown, Reading, Erie and Altoona.
The House passed a version of the bill last year that dealt mainly with superintendents’ salaries and school district audits; neither the Senate or the House has voted on the current proposal.
Pennsylvania already has a school district financial distress law, but it is decades old. There is widespread agreement that it does not allow state authorities to act quickly enough and does little to help districts once they are declared distressed.
At the same time, there is strong disagreement, mainly along party lines, about whether Piccola’s proposal is the right solution.
Critics said it reflects a conservative legislative agenda that seeks to create more charters and to close budget gaps by cutting teachers’ pay, instead of increasing state funding.
The Corbett administration backs the proposal. "When local school districts cannot or will not make these decisions on their own, the State will need to step in and take action to provide for the education of the students and to protect the interests of the taxpayers," said Annmarie Kaiser, Corbett’s Secretary of Legislative Affairs.
The bill calls for the state Secretary of Education to appoint chief recovery officers, who would craft plans that could include:
• Closing or reconstituting schools and dismissing, suspending or reassigning their employees;
• Turning schools over to private management;
• Renegotiating union contracts, with the power to unilaterally put a new salary schedule into effect if negotiations fail;
• Reopening current district budgets and increasing taxes;
• Suspending or closing charter schools.
Schools could become charters by a majority school board vote; the board would be obliged to approve the conversion if it were part of a recovery plan. Now, except in Philadelphia, teachers and parents must agree to the change.
If a school board rejected a proposed recovery plan or failed to implement it, the state education secretary would seek a court-imposed receivership. The receiver and chief recovery officer would carry out the plan.
The proposal, while establishing an interest-free loan fund for distressed districts, does not specify how much money would be available.
State Sen. Daylin Leach (D., Montgomery), a Senate Education Committee member, criticized the legislation as "offer[ing] no new money; it just comes in, eliminates the current union contract and turns schools over to private for-profit operators. … This is not helping distressed districts; this just fulfills a right wing wish list — busting unions, paying teachers less and giving them no right to strike."
Pennsylvania State Education Association president Michael Crossey wrote in an email to members that "this is a manufactured crisis that Tom Corbett is using to chip away at our rights. … Instead of addressing the real needs of our struggling school districts, Governor Corbett and some state Senators want to solve it by eliminating your collective bargaining rights and putting state-appointed bureaucrats in charge of your school district."
Piccola stressed that "we’re not looking to break the unions. Instead, we are looking to give districts the flexibility they need, instead of having high-priced contracts they can’t afford."
Charters should be an option, he said, because "school choice is a budgetary issue. Monopolies don’t work — they are inefficient. … There is no incentive for them to perform well or keep costs down."
Piccola acknowledged that some districts have such deep-rooted financial problems that they might not be able to pay back interest-free loans. However, he said, loans are as far as many legislators are willing to go.
Chester Upland school board member Charlie Warren opposes the plan.
"It is nothing more than union busting and taking away the rights of a community to run its school system," he said. "They cut the funding last year; now they are dumping even more on poor communities. Why not give fair funding? This is nonsense. It’s not right."
Contact staff writer Dan Hardy at 610-313-8134, email@example.com, or on Twitter @DanInq.