The Dismantling of Public Education in Philadelphia

The public education system in the city of Philadelphia is on the verge of collapse. 3,783 school district employees and teachers had been laid off back in May 2013, 24 schools were closed (8 were shut down the previous year), and $50 million were borrowed last minute from the city to guarantee that the schools will open their doors on September 9, which school district superintendent William Hite had threatened would not happen if the district did not receive more funds from the state (Kase 2013). The principal of an elementary school in central Philadelphia even resorted to ask parents to contribute $613 to fill a $355,000 budget shortfall in that school (Lyman and Walsh 2013). But as I will argue in this post, this crisis has not been the result of pure mismanagement in the district, though that had been a part of it. It was also not the result of greedy teachers unions, because Philadelphia teachers earn lower incomes than teachers in other school districts. The collapse of the public school in Philadelphia, as in several other cities across the country (e.g. Chicago, New York City), is the result of a deliberate policy by politicians and wealthy individuals to undermine a once viable school system.

But let me back up for a while: Philadelphia with a population of about 1.5 million people has a significant proportion of the population living in poverty. About 60% of high school students actually graduate from high school and are proficient in reading and math. 80% of students come from poor backgrounds (Kase 2013). It, therefore, has a long-running disadvantage compared to other school districts that have significantly better and more resources, and students who are easier to educate. Wealthy and middle class residents have left the city in droves, and take their tax money with them. Poor residents are left to hold the bag, and can not maintain a well-resourced education system. But several changes to the public school system have essentially exacerbated the situation, and were directly linked with the budget crisis.

The Philadelphia school district had suffered a $216 million budget deficit with a $1.7 billion budget back in 2001, and was taken over by the state to manage the bad fiscal situation. The state decided to put a school reform commission in charge, hired a CEO (who was not democratically acocountable) and changed hiring practices in schools: non-certified teachers were permitted, and many teachers were liable to be transferred between schools and fired; for-profit firms were invited to manage schools; and school district resources could be transferred from traditional public schools to privately managed charter schools. Edison Inc. was supposed to take over 64 schools, but this privatization plan failed. Nonetheless, the school district performed more privatizations, and companies and organizations like Foundations Inc., Victory Schools, Universal Companies, Temple University and the University of Pennsylvania were brought in to run low-achieving schools and charter schools (Derstine 2013). Charter schools became a very important piece of the reform agenda. Between FY 09 and FY 14 the charter school portion of the school district had increased from 15% to 30%. Charters are claiming $675 million from the school district budget this year (Kase 2013).

During Ed Rendell’s governorship (2003-11) more state money flowed into the Philadelphia public schools, but then-superintendent Arlene Ackerman (who was funded by the private Broad Foundation, representing the interests of wealthy funders like Bill Gates and the Walton family-also discussed in (Jehlen 2012) has used the extra money for her “Imagine 2014” initiative, which poured more district funds into charter schools, renaissance schools and promise academies, though there was no prospect of better public education. It was the Philadelphia School Partnership, a private organization funded by local wealthy philantrophists such as the William Penn Foundation, and the Boston Consulting Group, that had experience in downsizing and raiding companies in the corporate world, that carried out the restructuring of public schools into charter schools. Even after Ackerman’s ouster in 2011, the dismantling of public education continued under the leadership of William Hite, who was also funded by the Broad Foundation. Few of the teachers in the charter schools are unionized, and often carry heavier workloads than public school teachers (Ni 2012). Charter schools also tend to be corrupt, because charter CEO’s take money from the schools for their personal purposes. 19 of the 74 charter schools in Philadelphia have been under investigation for fraud, mismanagement and conflict of interest. And unlike traditional public schools, charter schools are not really supervised for academic progress by the school district (NPR 2011).

The real blow to the school district came with the governorship of Tom Corbett (2011-Present), who operated with heavy influence from ALEC, a lobbying organization for private corporations, who have long been eyeing for school privatization. When he came into office in 2011, he cut school district funding by $1 billion, the most heavy cuts were inflicted to Philadelphia and other low-income districts. Over the last 2 years the state had inflicted $300 million in funding reductions for the Philadelphia school district (Derstine 2013). The resulting huge budget shortfalls were subsequently made up by $300 million in loans acquired from willing investors, who charged $22 million in debt service for the next 20 years (Graham 2012). Debt service obligations for the city have increased by 32% from five years ago, and half of the debt, about $159.9 million, are devoted to current interest payments. Before the 2008 financial crisis, the school district had entered into a $3.5 billion bank swap deal, and is due $186 million from the variable interest on the bank swaps. In comparison, the total school district budget is $2.39 billion (Derstine 2013). Wall Street bankers, who have caused the financial and economic crisis, are enriching themselves at the cost of students, who have to fear that their school will close down because it is severely underfunded. In the mean time, banks who are smelling profits have increased their investment in the education sector. Investment in for-profit education has increased from $13 million in 2005 to $389 million in 2011, benefiting Goldman Sachs and JP Morgan among others (Faux 2012).

The last minute $50 million cash injection from the city prevented a school closure for the beginning of the school year (Lyman and Walsh 2013), but will likely be followed by regressive measures such as more tobacco and alchohol taxes, and between $100 to $130 million in givebacks from city workers (Barrickman 2013). The state was only willing to advance $45 million in additional funding if severe union concessions would follow. In the mean time, 1,000 out of the nearly 4,000 fired staff were hired back for the fall (Lattanzio 2013).

The teachers’ contract expired on August 31, but they are asked to make enormous wage and benefit concessions, totaling $133 million. Last year, school operating expenses, that include teachers and staff expenses, had already been reduced by 25% (Derstine 2013). The concessions are equivalent to a 10% pay cut (Lyman and Walsh 2013). Changes in health care plans will likely force teachers to contribute to their health care plan. The union’s boss, Jerry Jordan, has already supported a plan to cancel pay raises and reduce benefit coverage for teachers. It should be noted that many teachers purchase school supplies for their students, because the district itself is not funding many supplies (Lattanzio 2013). Squeezing teachers will likely lead to an even poorer provision of necessary school supplies than currently. If other institutions in the public sector are any guide to the prospects for a new contract, then the chances of the Philadelphia Federation of Teachers are poor. Philadelphia city workers have not received a contract in five years now (Williams 2013). Bethel Park teachers (suburb of Pittsburgh) haven’t seen a contract in four years (Funk 2013). Teachers across the whole country have been under assault. Since the beginning of Obama’s presidency in 2009, 300,000 teaching positions have been reduced and 4,000 public schools have closed (Barrickman 2013).

The crisis in public education in Philadelphia is very serious, but it has to be understood that this crisis has been fabricated by political and economic forces in the country that want to systematically dismantle the public education system, while more schools are converted into profitable investment outlets for wealthy entrepreneurs, and more students and communities are left by the wayside.


Barrickman, Nick. 2013. “School District of Philadelphia Passes ‘Doomsday’ Austerity Budget.” World Socialist Website, June 4.

Derstine, Ken. 2013. “Charter Schools Now Getting 30% of School Budget. Philadelphia Schools Facing ‘Doomsday Budget’ Eliminating Most School Positions.” Substance News, June 3.

Faux, Jeff. 2012. “Education Profiteering: Wall Street’s Next Big Thing?” Economic Policy Institute, October 1.

Funk, Harry. 2013. “Bethel Park Teachers Start Fourth Year Without Contract.” Pittsburgh Post Gazette, August 29.

Graham, Kristen A. 2012. “Philadelphia’s School Commission Borrows $300 Million to Pay Its Bills.” Philadelphia Inquirer, November 8.

Jehlen, Alain. 2012. “Boot Camp for Education CEOs: The Broad Foundation Superintendents Academy.” Rethinking Schools 27(1).

Kase, Aaron. 2013. “Indescribably Insane: A Public School System From Hell.” Salon, August 19.

Lattanzio, Vince. 2013. “Philly Teachers Union Offering Contract Concessions.” NBC Philadelphia, August 28.

Lyman, Rick and Mary Williams Walsh. 2013. “Philadelphia Borrows so Its Schools Open on Time.” New York Times, August 15.

Ni, Yongmei. 2012. “Teacher Working Conditions in Charter Schools and Traditional Public Schools: A Comparative Study.” Teachers College Record.

NPR. 2011. “Investigating Charter Schools Fraud in Philadelphia.” National Public Radio, June 27.

Williams, Scott. 2013. “Philadelphia Workers Say, ‘We Will Shut City Down’.” Workers World, May 25.

More Resources on the School Crisis

Adsit, Tim L., and George R. Murdock. 2011. Cutting Costs and Generating Revenues in Education. Lanham, MD:Rowman and Littlefield Education.

Kintisch, Baruch. 2012. “Ignoring Funding Problems= Bad Education Policies for Philadelphia.” Senator Vincent Hughes.

Lilienthal, Chris. 2013. “PA House Budget Locks in Most School Funding Cuts.” Pennsylvania Budget and Policy Center, June 21.

Oliff, Phil, Vincent Palacios, Ingrid Johnson, and Michael Leachman. 2013. “Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come.” Center for Budget and Policy Priorities, March 19.

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One Response to The Dismantling of Public Education in Philadelphia

  1. Lorenzo says:

    Superb article with Superb data that leads to a Superb conclusion

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