Philadelphia school system embarks on major privatization effort

By Del Stover

8/13/02 – With the new school year only weeks away, school reform efforts in Philadelphia are picking up speed–with the School Reform Commission approving contract agreements with seven commercial and private groups to manage 45 of the city's lowest performing schools.

Early last month, the school commission took a major step forward by hiring Paul G. Vallas to head the troubled school system. Vallas, former head of the Chicago schools, is credited with solving Chicago's perennial fiscal problems, streamlining operations, and ending social promotion.

In recent weeks, Vallas has been negotiating with the school commission, contractors, and state education officials over the use of $83 million in new state funding for education reform initiatives. State Education Secretary Charles B. Zogby originally had wanted close to $55 million to be spent on the 45 privately managed schools.

The agreement reached July 31 calls for $37 million to be spent on those schools plus 41 other low performing schools. The remaining funds would be used for districtwide reforms, such as after-school programs, a major reading initiative, high school improvements, and expanded summer school.

At the same time, the school commission announced contract agreements with the private management groups, which will share $120 million over five years.

The contract awards were hailed as a necessary step that paves the way for private contractors to move forward with their plans for the coming school year.

A vocal advocate for privatization, Gov. Mark Schweiker called the decision an important step in the dramatic reform of the school system.

"New schools, with exciting reforms, will make Philadelphia's schools the finest urban learning centers in the world," he says. "The days of parental disappointment and poor academic performance are over."

That opinion is not universally shared. Some civic groups still criticize the privatization plan, and only two weeks ago, a state court panel dismissed a lawsuit by local union officials and parents seeking to halt the state takeover that replaced the city school board with the reform commission.

The awarding of contracts so late in the summer also concerns teachers, who question how private management groups can implement new education models with the time remaining before school opens. Barbara Goodman, spokesperson for the Philadelphia Federation of Teachers, says she recently spoke to a teacher who hasn't heard anything in months from her school's new management team.

"That leaves teachers very uncertain about the curriculum," Goodman says. "Some schools didn't have principals at the end of the year, and so teachers don't know who they'll be working for, or what the curriculum and program will be."

Yet, many of the private management groups preparing to take over city schools express confidence that they'll be ready on time.

"We have been hard at work, planning and preparing with Philadelphia teachers and principals, to help make these schools the very best they can be," says Chris Whittle, founder and CEO of Edison Schools Inc., which was awarded a contract to manage 20 schools. "This is the most important goal for our company."

For all the talk of reform, however, the school system still faces some immense challenges.

New state funding is unlikely to solve the school system's perennial shortage of money for school supplies and equipment. Schools also must contend with a shortage of qualified teachers.

As of early August, the teachers union says, the city still had 200 unfilled classroom vacancies–and 1,400 teachers hold emergency certification.

At the same time, questions surround the diminishing expectations of school privatization–and particularly the role of Edison–a dramatic reform experiment that Gov. Schweiker and other state officials had hoped would play a greater role in the city's reform efforts.

Early this year, state officials had talked of giving Edison control of 60 city schools and hiring the firm to restructure the school system's central administration. But in March, while the reform commission voted to hire Edison as "head district adviser," it also hired 11 other firms as management consultants. Then, in April, the commission said the company would be awarded a contract to operate only 20 schools.

Finally, two weeks ago, new schools CEO Paul Vallas announced that Edison would not be playing a major consulting role in school reform efforts.

"I would be hard-pressed to find any reason to use Edison for any other consulting contracts at this point," Vallas told the Philadelphia Daily News. "I would oppose it. There's no need for that. That's what I'm here for."

That remark has drawn little public response from state officials, although Gretchen Toner, spokesperson for the state Department of Education, says, "we believe that private education management companies have a lot to offer."

Privately managed schools will not be receiving as much money as once thought. Edison, for example, will receive only $881 per pupil over what was spent at schools last year. The company had sought $1,500 more per student.

Meanwhile, a new controversy hovers in the wings. State Auditor General Robert P. Casey Jr. is challenging state education officials to explain why they bypassed competitive bidding procedures last year in hiring Edison for $2.7 million to evaluate the school system operations. The U.S. Department of Education also has said it will review how the contract was awarded.