Rescue plan for Phila. schools: Many ifs, but...

Gov. Corbett says plan for city schools would bring fiscal stability and educational improvement.
Gov. Corbett says plan for city schools would bring fiscal stability and educational improvement. (DAVID MAIALETTI / Staff)
Posted: July 02, 2013

The $140 million package Gov. Corbett presented Sunday to rescue Philadelphia's cash-strapped public schools has tentative written all over it.

The legislature has not yet signed off on key items. The federal piece depends, for now, on what one negotiator called "a handshake on the phone." And some of the numbers are hopeful projections.

But this much is clear: An unusual array of political and business leaders helped craft the latest version of a rescue plan.

If all the pieces Corbett described to The Inquirer in a Sunday interview fall into place - and the district is able to win as much as $133 million in labor concessions - the plan would provide nearly $274 million of the $304 million that Philadelphia School Superintendent William R. Hite Jr. and the School Reform Commission said they need to avert a doomsday scenario.

Facing that shortfall in the fiscal year that begins Monday, the district has laid off 3,859 employees.

As outlined by Corbett and others involved with the talks, the package calls for:

A projected $30 million that officials hope to derive from a trio of bills that would enable the city to toughen its tax-collection system.

$15.7 million in additional basic-education funds contained in the $28.4 billion annual budget Corbett signed Sunday night. This would increase this type of aid to the district to about $984 million.

A $45 million one-time infusion of additional aid from the state. The source is complicated: It is the interest and penalties on a debt Pennsylvania has owed to the federal government for several years, but which Washington has now agreed to forgive after lengthy negotiations.

Extending Philadelphia's extra 1-percent sales tax, which was set to expire next June. The extension would allow the city to borrow $50 million against future collections of that tax. Starting next July, the extended tax would also generate $120 million annually for the School District.

The plan also counts on Hite's getting the $133 million in savings he seeks in concessions from unions, primarily the Philadelphia Federation of Teachers (PFT).

The package also would hinge on the district's implementing reforms that would lead to what Corbett called "fiscal stability, educational improvement, and operational controls." He, too, is pushing for concessions from the unions - a push that plays well with his fellow Republicans in the legislature.

The state Department of Education would conduct an annual review to make sure those steps were being taken, but the plan does not identify what those reforms would entail or require specific givebacks, such as eliminating seniority or having PFT members contribute to their health-care premiums, both of which Hite has called for.

David L. Cohen, a Comcast Corp. executive who served as chief of staff to then-Mayor Ed Rendell in the 1990s, was involved in the negotiations - it was Cohen who told of the "handshake on the phone" with federal officials.

Cohen said Sunday business leaders as well as Corbett believed union concessions were a critical element if the district was to obtain additional money from taxpayers.

"But that is not to say that either the business community or the governor or anyone else felt we should legislate what those reforms are," Cohen said, adding that he had worked with Rob Wonderling, president and CEO of the Greater Philadelphia Chamber of Commerce, as well as with Mayor Nutter, Council President Darrell L. Clarke, the governor, and others on the plan.

And although Nutter and the city had been counting on a $2-per-pack cigarette tax to provide $46 million for the schools, that hoped-for part of the plan is dead. Republican lawmakers were unwilling to pass the legislation the city needed in order to tax its smokers.

"We understand that may be the case," Nutter spokesman Mark McDonald said Sunday night. "We're focused on other ways of generating revenue for the School District." He declined to comment on details of the rescue package.

"It's still pretty fluid," McDonald said.

Clarke, Hite, and SRC officials also said it was premature to comment.

Cohen said he and others were pleased the proposal would come close to the $304 million Hite and the SRC said the district needs for the fiscal year that begins Monday.

"It's not a perfect package," Cohen said. "It does not have all the elements all the players would like to have had."

Meanwhile, Randi Weingarten, president of the American Federation of Teachers, and Diane Ravitch, a national education expert, have appealed to U.S. Education Secretary of Education Arne Duncan to help Philadelphia schools.

In a letter scheduled to be made public Monday, Weingarten and Ravitch wrote to the nation's top education official: "We are writing to ask for your urgent intervention to preserve public education for the children of Philadelphia."

"Due to draconian budget cuts, the public schools of Philadelphia are being starved to the point where they can no longer function for the city's children. Philadelphia is in a state of crisis. We believe your direct and public intervention is required to ensure the existence of educational opportunity in that city."


Contact Martha Woodall at 215-854-2789 or, martha.woodall@phillynews.com.

Inquirer staff writer Troy Graham contributed to this article.

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