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Officials: Analysis Underscores Philadelphia Schools' Need for Funding

ERS' Philadelphia work cited in The Philadelphia Inquirer

This article appeared in The Philadelphia Inquirer. View that version here.

In the face of steep revenue cuts, the city school system is now spending less to educate each student than it has since 2008, and benefits are costing it nearly $8,000 more per teacher than they did three years ago.

Mix lower revenues with rising fixed costs and the result is fewer dollars spent in Philadelphia School District classrooms, an outside analysis of district finances released Thursday found.

Chief Financial Officer Matthew Stanski said the analysis underscored the points officials were trying to make this week to a skeptical, frustrated City Council: they keep coming back for more money year after year because the money they receive isn’t enough to cover their fixed costs.

“It’s not mismanagement or not knowing where the money is or where it’s spent,” Stanski said. “It’s this continued structural problem.”

The analysis, performed by the Massachusetts firm Education Resource Strategies at the district’s request, was funded by a grant from the state Department of Education. ERS has performed similar work for Philadelphia and other large, urban districts in the past.

Superintendent William R. Hite Jr. said the system had done the best it could with the funds it had been given by city, state and federal officials. (The School Reform Commission lacks taxing authority and so cannot raise its own funds.)

“You don’t solve this by cutting alone,” Hite said. “It has to be solved with revenues that are recurring.”

Rob Dubow, city finance director, joined Stanski and Hite in presenting the findings to reporters Thursday.

“The solution really is more funding,” Dubow said, adding that the city could not shoulder the burden alone. State-level fixes, including an education funding formula and relief on charter school costs, are also needed, he said.

Altogether, the district has cut expenses quicker than it has lost students, the analysis found.

In the 2013-14, the district spent $1.75 billion on pupils in district-operated schools - or $12,724 per student. That’s lower than any year since 2008.

At the same time, the district is spending more on things like debt service, charter schools and employee benefits.

Those costs in particular have risen quickly, the analysis noted, jumping 32 percent or about $8,000 per teacher.
Stanski said that while the average Philadelphia teacher is paid $71,000, the district pays on average about $117,000 per teacher when benefits are factored in.

Teachers’ salaries have remained flat.

The report comes as the district fights for more money on several fronts - before City Council, which is reluctant to pass the property tax increase Mayor Nutter proposed to raise $105 million for the schools; in Harrisburg, where Gov. Wolf wants at least $159 million more for Philadelphia, also a tough sell in the legislature; and in court, where the Supreme Court is considering a case that would allow the district to toss the teachers’ contract and impose benefits changes.

So far, the courts have refused to allow the Philadelphia Federation of Teachers’ contract to be voided. District officials say that change is necessary and would save more than $50 million annually.

District teachers have been working without a contract for nearly two years. They do not currently pay toward their benefits.

PFT president Jerry Jordan said it was disingenuous for the district to complain about the cost of benefits. "The district walked away from millions of dollars that we put on the table," Jordan said. He said the PFT offered health-care concessions; district officials have said the union's offer was inadequate.

Negotiations are technically continuing between the two, but Jordan said, "We haven't met for ages."

While he agreed that state cuts hurt the district disproportionately, Jordan suggested that officials' spending has been a problem too, by moves to allow charter expansion and take on high debt service payments in particular.

"All of the decisions that they made led to this predicament," Jordan said. "They are the ones who set policy for this district."

Officials: Analysis Underscores Philadelphia Schools' Need for Funding
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