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OF COURSE WE think a school district should be fiscally sound and managed well. And a budget deficit of any kind should not be taken lightly. But frankly, the more hot water school district Chief Executive Paul Vallas gets in over the budget, the more we think he's the last person who should lose his job. The latest boiling cauldron was lit when SRC member James Gallagher released a statement about a looming deficit for 2008 of $100 million...

NOW THAT TWO reports show Philadelphia public schools operated by expensive Educational Management Organizations (EMOs) perform no better than district-run schools, it's clear the School Reform Commission must revamp or modify the experiment. A report last month by the Rand Corp. says the district simply hasn't gotten what it has paid $90 million for: greatly improved academic achievement at low-performing schools. Last week, the SRC's own Accountability Review Council, which monitors the district's reform efforts, echoed the results of the Rand report (which they helped finance)

Even if a new budget proposed by Harrisburg Republicans passes and some funds are restored to education spending, the Philadelphia School District will still face a $610 million gap next year, officials said Wednesday. Chief Financial Officer Michael Masch broke the news at a School Reform Commission meeting. Under Gov. Corbett's proposed budget, the district would have to make $629 million in cuts, including losing more than 3,000 jobs, slashing transportation, ending full-day kindergarten, and cutting programs.

After six months of failed negotiations with the School Reform Commission, the Philadelphia Federation of Teachers is still without a contract. The Sept. 1 deadline has come and gone, and both sides remain at an impasse. But can you really blame SRC members for the stalled talks? It has been a long year for them. In March, they voted to hire Arlene Ackerman as the district's new CEO, and I can only imagine that this was an extremely exhausting process. First they had to work out Ackerman's base pay - which ended up being $325,000, the second-highest superintendent salary in the country.

IT'S BEEN A WHILE since good news has come from the School District of Philadelphia and its overseer, the School Reform Commission. A budget deficit, fights over the educational value of Educational Management Organizations, high-profile assaults on teachers, increased scrutiny from outside agencies, the rammed-through installation of an interim CEO to replace district lightning rod Paul Vallas. All have left the district a little raw. This week, good news came in the form of test scores.

IS THE SCHOOL district's $70 million-and-counting deficit the worst it has seen? Hardly. In 2001, the deficit was $235 million. In 2003-04, it was $44 million. Back in 1998, the deficit was $146 million. Those were the bad old days of the district, though, BPV: Before Paul Vallas. Vallas rode into town giving us hope and promise that not only would the fiscally broken district be fixed, but also radically reformed so all students could excel. That reform process began with the creation of the School Reform Commission in 2001, but it was Vallas' vision that drove changes that resulted in higher test scores, smaller class sizes, early kindergarten, and other changes.

THE STENCH OF past financial incompetence lingers over the School District of Philadelphia, a stubborn smell that refuses to dissipate, no matter how many school officials leave, quit or are forced out the door. The latest: Former Chief Financial Officer Folasade Olanipekun-Lewis, who worked for the district less than two years (some of that time on maternity leave) and walked away in May with an agreement to be paid her full $180,000 salary, through to March 2008, according to the Philadelphia Inquirer.

Gov. Rendell wasted little time in naming a Republican powerbroker to replace Heidi Ramirez, who resigned last week from the Philadelphia School Reform Commission. It is important to fill the position swiftly, but in confirming the nomination the legislature must make sure it is appointing the best person to move the troubled school system forward. Rendell tapped David Girard-diCarlo, a former U.S. ambassador to Austria who did a good job on the SEPTA board years ago. The Cozen O'Connor lawyer is a former Blank Rome chairman.

I've lived in Philadelphia since 1976, and I have yet to see significant progress among Latinos being educated in the public school system here. Three decades ago, high school-dropout rates were soaring, schools were overcrowded and a lack of resources plagued the school district. Lawsuits were filed to redress issues related to bilingual education and inadequate access to services because of language barriers. Our neighborhoods in the barrios were wracked by drug-related gang violence and unemployment, a byproduct of the recession.

Complaining that the Philadelphia School Reform Commission spends thousands on communications consultants while struggling to maintain the basics, several parents' groups this week said they are "breaking off" talks with the district on developing a process for more parental and community input. "We are dismayed that as we continue to struggle for teachers and librarians in our schools, a manageable class size, school safety, and an open and transparent process, that the SRC continues to put out thousands of dollars in contracts for public relations firms.