Probably to the new 101 6/5/00 - FISCAL STABILITY - RES. 000232 financial officer. How many budgets does the School Board have? You have a capital budget and then you have an operating budget, and then in the testimony, I hear about a categorical budget.
What is that categorical budget, and how much does it involve?
It's just over $200 million. Categorical funding is comprised of federal funds Title I money, Title IV, Title VI, Title 20. And it also consists of grant funding that we get from a variety of sources -- the federal government, the State, and other sources.
Well, not to do it here, but at the time we had the discussion that Councilman Nutter talked about with respect to the formula that changed in 1991, I think it would be awfully good if we could have information on all of the sources of funding, because I wonder whether sometimes there may be judgmental decisions that can be made to take funding from one source to help another source. Somewhere in one of the two statements, you mention that a cost in the operating budget is going to be paid for by 102 6/5/00 - FISCAL STABILITY - RES. 000232 categorical funds, which immediately raises the question, what other costs could be? So if we could add that to the budget. Secondly, I wanted to say I agree strongly with Superintendent Hornbeck that public education is the most important question. Although by newspaper coverage, you might think the stadium was the most important issue that Philadelphia was confronted with. Somehow, I imagine Philadelphia might survive much better if we forgot all about stadiums and did nothing. In contrast, if we took the same approach to schools, it would be a disaster. So I think, obviously, the number-one question facing Philadelphia is the School District. Third, I have to give a dissenting opinion to all of the plaudits that are being voiced about this great compromise arrangement between the Governor and the City and the School District. I happen to think it's not a good arrangement at all. I think that what should have happened was that the Governor should have acted much more quickly in delaying the payments that -- you know, the portion of the 59 million that he's 103 6/5/00 - FISCAL STABILITY - RES. 000232 talking about, and instead of asking for the School District -- instead of asking that the City put up the money, I think the Governor should have advanced money. I think the cuts that are being made are bad cuts because they're affecting adversely, I think, the performance by the school system. I don't know, but I expect that maybe that was one of the factors that caused Superintendent Hornbeck to make his decision about leaving. I don't think you advance a school program or school programs in general by compelling cuts. I view all of the cuts that you're making as harmful to the school system. I've never seen all of the waste that some of my colleagues believe exist; maybe it does, but I haven't seen evidence of it. And I thought with the studies being made by the School District, together with Greater Philadelphia First, I thought that if there were waste, that those kind of audits would have ferreted out those wastes. And so I think that the Governor, by not giving any additional money, by compelling 104 6/5/00 - FISCAL STABILITY - RES. 000232 cuts, has not served the City well. And I'm deeply concerned about that. The buying-time argument I don't go for at all. We've been buying time for so many years, just managing to survive each year. And I think the Governor should have taken steps to have really given support to the school system. But I think what we really need on the budget is the kind of full -- kind of not so much -- Madam Chair, I'm suggesting instead of maybe a formal hearing, I think this is a discussion about funding that might be best done in the Council caucus room. I mean, it doesn't have been to be a closed affair, but where we can have informal discussion. We ought to know and we don't know, and when we ask you some questions, it seems to us that you don't know some of these real terrible complexities, because, you know, it's human to try to just take the conclusion rather than to get to the fundamentals. And I think we've got to get to the fundamentals if we're going to play a larger role, as I understood we are, in the discussion between Mayor Street and Councilman Nutter with respect to Council supervision over the school 105 6/5/00 - FISCAL STABILITY - RES. 000232 budget. I think the Council has got to know much better than we know now all of these complexities.
But I did want to make clear that as to the whole agreement, I look at it negatively, if it has the result of so-called buying time, whatever that means, if it means the State is going to be more responsive after the Republican Convention. I'm not concerned about Governor Ridge's positions. Now I don't know whether they're genuine. I read in the paper that with respect to the views on abortion choice or compulsory non-abortion procedures, he's ready to switch his position one way or the other. And during the time, you know, leading up to the Convention and the decision as to who the vice president will be, we've got to know where he's going to be standing after the Convention, whether he does or does not become the vice presidential nominee. So let me say that I think the adult -- as the senior member of City Council, maybe not in years served -- I think President Verna may have served more years than I. 106 6/5/00 - FISCAL STABILITY - RES. 000232
But in age, I'm very concerned about the cut in adult education 'cause the educational system, sure it's for the kids, but it's also for the adults. And when we're talking about the need for preparing more adults for jobs that are not being filled, I think the adult education program is extremely important, and I'm hoping that in one way or the other, the proposals in -- I think it's in your statement, President Ramos, I'm hoping that that program will continue to exist in at least its current form. I think it ought to be enlarged, I think there ought to be more than two high schools throughout the City of Philadelphia that make adult education available. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. Those of us that were here around 107 6/5/00 - FISCAL STABILITY - RES. 000232 1988-'89, some of this budgetary processing is eerily reminiscent of the hearings we were having here in this chamber about the City budget. We were talking about one-shot fixes, which is what we have here, a one-shot type of fix that really does not, I believe, take us to the next step. We don't know where we're going to replace the $20 million, if this Council says we're that we're going to give this one-shot deal, how is the Board going to replace that $20 million next year. We have to begin thinking -- and I'm -- I'm also of the thinking that we have made incredible cuts in the budgets of education, specifically in the teaching part. My kid still goes to a classroom that has too, too many kids in one class. My son -- by the way, who likes macaroni and cheese, it seems to be his only food that he eats -- is going to a classroom that is going to be too many kids in that classroom. And it's a good school, the teachers are excellent. They don't have music really; they don't have art, as they should. I think over the years we've comprehensively have become so used to cutting 108 6/5/00 - FISCAL STABILITY - RES. 000232 back on the actual programmatic teaching that now -- that now we don't believe that public school systems should offer a comprehensive really educational experience. So we have cut on the basic aspect of what I -- what I had as a kid growing up in a ghetto, growing up in a poor community, growing up with a lot of kids in the classroom, but still, the programmatic aspects were still there. My child, for the first time in four years, just had a book that she could take home this year, and that to me was a great improvement. But when I went to public schools, I had many books that I took home and that I had to cover and that I had to take care of and so on down the line. So we have made -- we have made cuts. What I'm concerned about is that it is eerily, eerily reminiscent of 1988-'89 in the City of Philadelphia in terms of one-shot deals and cuts. And I'd like to find out, you know, what it is really. I mean, you have said that you're going to construct a five-year plan, and within that five-year plan, I would like to see 109 6/5/00 - FISCAL STABILITY - RES. 000232 how it is that we are going to finance the aspects of education. And that means bringing classrooms down from 30 to to 20. 5 That means -- I was -- Saturday 6 morning, I was with some kids at William Penn, and 7 we spoke about, how many computers do you have? 8 And they said they really didn't have computers. 9 They had a computer room that they would go to and 10 that it would be a computer class. And we talked 11 about some of the other aspects in terms of what 12 their experience in school was and what was the 13 prevalent nature. 14 I also asked them if they thought that 15 uniforms were going to increase their learning 16 experience and asking why they have passively 17 accepted the position over the uniform question, 18 especially in high schools. I would have expected 19 a little bit more of a questioning attitude from 20 high school other than Masterman as to the added 21 imposition of uniforms. I believe in a public 22 school system, freedom is part of the questioning aspect, and it was going to be, why they were not consulted. I asked them that, and there was a lot of passivity, and I didn't like that passivity. 110 6/5/00 - FISCAL STABILITY - RES. 000232 They should have been a little bit more questioning. But in terms of some of the aspects of Councilwoman Verna, she went down in terms of the cluster and the cuts. Have you any vision right now as to where these cuts in the cluster area are going to be?
As I said in my testimony, Councilman Ortiz, what the Board has done is gone through the proposed budgets of the departments. The Finance Committee made recommendations, the Board adopted them, and throughout this week, the Chair of the Finance Committee, Mike Masch, and our CFO, Rhonda Chatzkel, will meeting with the Superintendent and other managers to start addressing that with respect to the clusters and other areas that were cut.
What is an equity coordinator? An equity coordinator in the cluster, what is that? SUPERINTENDENT HORNBECK: It's an individual that examines the content, for example, of professional development, the formulae and the way money ends up in different schools, the test 111 6/5/00 - FISCAL STABILITY - RES. 000232 data results, all with an eye toward how equitable the distribution is.
How many of those do we have? SUPERINTENDENT HORNBECK: 22.
of them? 8 SUPERINTENDENT HORNBECK: As you may 9 know from years past, I think, for example, when I 10 first came here, that we discovered that about 11 $3.2 million of Title I money had been allocated 12 to the northwestern part of the City when, in 13 fact, the children that had generated that money 14 lived in North Philadelphia, east of Broad Street. 15 If equity coordinators had been in place, it would 16 have been a lot less likely that that was true. 17 The notion is that each kid ought to have a fair 18 chance and that person examines through that lens 19 those kinds of issues. 20
What's a 21 post-secondary readiness coordinator? 22 SUPERINTENDENT HORNBECK: An individual who has two primary responsibilities. One is to help create thousands and thousands of worksite learning opportunities, apprenticeship placements 112 6/5/00 - FISCAL STABILITY - RES. 000232 with employers throughout the City for the kids in each one of the primarily high schools. And the other is to help develop, this year, 25,000; by the year 2002, 70,000 surface learning placements throughout the City.
And is that like a job office, and there are of them? 9 SUPERINTENDENT HORNBECK: There are 22 10 of them. 11
One in each 12 cluster? 13 SUPERINTENDENT HORNBECK: One in each 14 cluster. 15
So the 16 secondary-readiness becomes sort of like an 17 employment office of sorts? 18 SUPERINTENDENT HORNBECK: Well, 19 actually, in Philadelphia, on the job front, the 20 worksite learning front, it's sort like the system 21 that exits in Denmark and Germany and England and 22 in other Scandinavian countries where there's an apprenticeship system. It's not so much to get a job; it's to place kids in places where it's another learning setting, where they equip 113 6/5/00 - FISCAL STABILITY - RES. 000232 themselves for college or for a job later.
So the job office with an educational framework in which there -- if a kid or a woman, a young woman is interested in banking, they would go to First Union and say, how many slots can you give us here? or something like that? SUPERINTENDENT HORNBECK: That's very much the way it is. And then on the surface learning side, similarly, there is the development both inside the schools and outside, with health agencies and nursing homes and all kinds of other places, places where kids are also linked back to the curriculum linking --
Do we have any data on that office, for example, in terms of the success per office? If there was a secondary- readiness coordinator at the Edison cluster or the Kensington cluster, how many kids and where they were placed and -- SUPERINTENDENT HORNBECK: Sure.
And what is the impact and effect on their educational processes and so on? 114 6/5/00 - FISCAL STABILITY - RES. 000232 SUPERINTENDENT HORNBECK: Well, we can certainly identify where kids have been placed, their record, that kind of thing.
Per cluster? SUPERINTENDENT HORNBECK: With each cluster. The degree to which we were able to say that it was that worksite learning situation or that service learning project that produced the gains in graduation rates, for example, that have occurred over the last several years are the big increases in being able to read and do math and do science. In my judgment, that can't be done in --
But you can say how many they have placed. SUPERINTENDENT HORNBECK: Oh, yeah.
Are they classified as teaching people or administrative individuals? SUPERINTENDENT HORNBECK: I have no 23 idea from an accounting point of view, but I consider them instructional people.
You consider them 115 6/5/00 - FISCAL STABILITY - RES. 000232 instructional, okay. Are they classified as instructional or as administrative? SUPERINTENDENT HORNBECK: I have no 5 idea where --
I think there's some dispute here. SUPERINTENDENT HORNBECK: -- where the accountants put them.
They are classified, but they are -- and how much do they earn? SUPERINTENDENT HORNBECK: They earn, I think, a teacher's salary. We can get back to you on that. But going back to the administrative classification, when I say that over these last several years, as I did a moment ago then, that we've reduced the administrators by 2 to 300 people, that already counts people like that as administrators, so that they're not over on the 116 6/5/00 - FISCAL STABILITY - RES. 000232 instructional side. There have been those in the past who've suggested that we have mislabeled --
But are they in the instructional side in terms of the budget that you submit, or are they on the administrative side? SUPERINTENDENT HORNBECK: I understand that they --
Because if you're trying to look at what is the size of the administration of the system and they're included in the teaching side, then that is confusing if they are actually administrators. SUPERINTENDENT HORNBECK: Well, that's the reason, I think, that Miss Chatzkel said they are classified as administrators.
There are two points to make, Councilman. One is that, as Miss Chatzkel said, for budgeting purposes, they're labeled as administrative, even though educators might see the role as instructional. The other is, and it goes to Councilman Cohen's earlier question, that some positions that are out in clusters are categorical. They're not -- you know, the operating budget doesn't show them as -- 117 6/5/00 - FISCAL STABILITY - RES. 000232
I don't know if it's some or all. SUPERINTENDENT HORNBECK: Some of them are.
The equity and the readiness are categorical? They're paid by federal funds? SUPERINTENDENT HORNBECK: Well, not all categorical monies are federal funds, but some of them are categorical, yes.
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, Madam Chair. Let me first say that in the short time that I've been here, I've heard President Verna plead on a number of occasions on the value of having members of this body and the Harrisburg delegation sit down to make sure we're all on the same page as it relates to Philadelphia, and I 118 6/5/00 - FISCAL STABILITY - RES. 000232 think the recent agreement speaks loudly on the overdue need for that. So as we look at this coming year, typically, we hear it takes two, but it's really going to take three to make it work: this body, the Harrisburg delegation, and you, those who have the awesome responsibility to turn this around over the years in front of us. I want to go on the record first to say I see the need in that is overdue, and let us be mindful to use those 12 months in a way that gives us the yield that we're looking for. One of my colleagues mentioned that one of the fundamentals in terms of looking to where the fundamental problem lies with the formula, and for my first time, again, in the six months that I've been here, I clearly got it on why there is this severe, glaring, obvious inequity when it comes to the funding of Philadelphia public school students. Now, since the formula, the new legislation happened at the State level in 1991, has there been discussions and pending strategy that the formula will again be looked at to see if 119 6/5/00 - FISCAL STABILITY - RES. 000232 it can be recrafted -- and "it" means legislation -- recrafted so that the new formula adequately captures what has us where we are now? Please respond to that.
There are probably two levels of responses. One is that, frankly, I think if we were just to go back to '91-'92 and just undo the changes made to the formula there, that would probably still not reflect a system of funding public schools in this state that makes sense. The -- you know, the -- one of the big problems that we have is that over that same period of time, you know, the local governments have been increased and expected to pick up a bigger share of the cost of public education. And if you're going to look at changing how public schools in Philadelphia and other public schools are funded and make sure that they're funded adequately, you'd probably have to change and do more than just uncap the formula. You'd probably need to change the formula. There are two bills right now in the State legislature -- the Califano and the Rhoades 120 6/5/00 - FISCAL STABILITY - RES. 000232 bills -- that seek to change the funding formula altogether. And there are other types of initiatives out there that are seeking to shift some of the burden from real estate tax to other forms of tax at the State level. I mean, you have some people that have been talking about this for a long time, such as (unintelligible), I guess, has been talked about tax reform for some period of time, and there are more people listening.
Let's say the 1999 formula was never changed; would we be able to say today that there would be equity of funding per-pupil expenditures between Philadelphia students and those students that are living in the other counties?
No, it's pretty clear that there would not be equity. And I think we're even at a point where, you know, where we're still struggling for adequacy; and, you know, we're not even approaching equity. SUPERINTENDENT HORNBECK: I think, as an arithmetic matter, that if the 1991 formula were still in effect, it would remedy between about 25 and 33 percent of the problem. 121 6/5/00 - FISCAL STABILITY - RES. 000232
25 or 33 percent -- SUPERINTENDENT HORNBECK: Of the problem.
Oh, okay. SUPERINTENDENT HORNBECK: I mean, that would be a good beginning and it would get us a significant way down the pike to the structural deficit that we find ourselves in, but it would not close the gap between Philadelphia's children and the children in the surrounding 61 school districts.
Which again points to the need for this body and at least those who represent us in Harrisburg from Philadelphia to all be on the same page. SUPERINTENDENT HORNBECK: There are fundamental flaws in that system. They are flaws that are, for example, reflected in the fact that 20 years ago, the State picked up about 52 or 53 percent of all education costs, and today, it's somewhere in the mid-30s. So there's just been a quantum shift in the character of responsibility for public education during this period of time, 122 6/5/00 - FISCAL STABILITY - RES. 000232 and it is not an easy fix. But your question goes to the heart of the matter, and that is to the kind of fundamental changes that are reflected in those two pieces of legislation that Mr. Ramos mentioned and other approaches that could be taken as well.
Okay, let me move to a second point, around this notion of the deficit. New school reform initiatives like full-day kindergarten honoring the mandate around charter schools have contributed somewhat to our existing debt; is that not correct? SUPERINTENDENT HORNBECK: That's --
What other things would you add to that that would have happened had we had all the dollars to begin with? SUPERINTENDENT HORNBECK: Well, the things that have contributed to the big dollar amounts are full-day kindergarten and charter schools and payments to approved private schools, or as the budget says, to "alternative educational institutions" or something like that. And there are -- Rhonda, what are the -- there are a couple of more. 123 6/5/00 - FISCAL STABILITY - RES. 000232
Actually, if you turn to of the presentation that I handed out, it talks about some of those mandates that have increased our expenses, and the payments to charter schools -- actually, what's listed on here is $68 million we now expect. Because of the additional charter school approvals made by the Board recently and the expectation for enrollment that, our payments to charter schools will approach $80 million next year. In just our payments to charter schools, in 1997, our payments to charter schools were 0. The tuition payments to other schools, which are $45 million, are an area of significant growth, and we present in another slide the degree of growth there. We have to honor the terms of an IEP, of an evaluation that's done for special education students and who are poor and place students, and we have to bear the cost of tuition. Comprehensive day care is a mandate, it's a service which we have wanted to offer, but we talked a little bit about the amendment that requires us to keep open locations that we had in 1988. And services to non-public students is 124 6/5/00 - FISCAL STABILITY - RES. 000232 another mandate expense for which we receive reimbursement but, again, these are mandates that contribute to the deficit overall.
My final question is again related to clusters and the makeup and the dollars spent. I want to echo comments made by Councilman Cohen with regards to concerns that exist currently around waste, particularly when we bring in a highly respected outfit like Philadelphia First, and they come back to you and deliver the message that there is none. And I believe that some legitimate questions have been raised around dollars spent on the admin. side, but on the class side, in clusters, where instructions are needed specifically within those clusters, is there not research to support that where you have small learning environments, which is what led us to the clusters, is that not correct? SUPERINTENDENT HORNBECK: That's correct.
Children do better academically. SUPERINTENDENT HORNBECK: What we found 125 6/5/00 - FISCAL STABILITY - RES. 000232 is that -- in two different ways. The small learning communities, which are inside of schools, there's a lot of research that tells us that kids do better in those settings, rather than in great big, you know, 3,000-kid high schools and 2,000-kid middle schools, and so on. And then in the framework of the clusters, when some of these concerns were raised about clusters some time ago, one of the things we did was to see how the kids, even within our own clusters, performed. And what we discovered is, which I hadn't looked at before, is that the kids in the smaller clusters did significantly better than even the kids in the somewhat larger clusters. And it's really not sort of rocket science to figure out why. Most human beings relate to one another better if you're relating to each other as human beings, as persons, as not big abstract, anonymous groups. And the clusters give a kind of an access between schools and administrators and parents and schools and community agencies, health agencies. I mean, everybody comes to know each other in a different 126 6/5/00 - FISCAL STABILITY - RES. 000232 way, and they will tend to accept responsibility from one another. And that's the whole point of the notion that smaller is better.
One final question. I know that in schools like McCall and Meredith, you have enrollments of somewhere between 550 and 610. The children are doing very, very good there. Give me the name of other elementary schools where you have larger enrollment and the academic performance of those children, generally speaking. SUPERINTENDENT HORNBECK: Well, I can't just pull off the top of my head big ones and little ones. I can give you a lot of schools where performance is very good and where the climb in achievement is really dramatic; I just can't associate it with size off the top of my head. And one of the things that we begin to see happening is even in the bigger schools, where the total enrollment is, say, 1,000, that school with 1,000 kids would generally have 3 small learning communities in it. So that instead of having school with 1,000 anymore, you've got 1 25 physical structure with 1 principal, but inside of 127 6/5/00 - FISCAL STABILITY - RES. 000232 that school, there are schools within schools, with only 3 or 400 kids in them, and those 3 or 400 kids stay together, and the teachers that teach them stay together. And so what we're trying to do by doing that, in fact, is in a sense, to replicate the experience out of Meredith or out of McCall by not building a new school over here for 3 or 400 kids, but to create schools inside of schools that exist and have the benefit that comes from being small happening that way.
Thank you. The Chair recognizes Councilwoman Miller.
Thank you, Madam Chair. Good afternoon, everyone. I have a couple questions. Superintendent Hornbeck, in your testimony on , the bullet points at the bottom, right before the last one or two, it says 128 6/5/00 - FISCAL STABILITY - RES. 000232 "Money belongs in the classrooms and not in administration. We have reduced the number of administrators by several hundred. We've spent more on instruction and less on other things than is spent in the average 500 Pennsylvania school districts." What are those things, such as? What are the things that other school districts are spending? 'Cause this is my real question, and I've been thinking about this over the weekend. $1.6 billion to me is a lot of money, and I just can't figure out why we can't run a school district on 1.6 billion. And then maybe I'm not thinking about the fact that maybe this includes facilities. I know it does. I was pretty shocked when the principal at Gratz told me they needed 10 million just to bring Gratz up to where it needs to be in terms of the facility. And I agree with Councilman Cohen when he commented earlier that this is not the setting for us to truly understand what is going on in the School District budget. Maybe there needs to be some other type of session and setting so that we can really understand. 129 6/5/00 - FISCAL STABILITY - RES. 000232 Because a friend of mine, State Representative John Myers, whom I know you know, was meeting with a group of other people from out of town, and they were astounded to learn that our school district budget was 1.6 million (sic), so I said to say to John, Listen, you know, we have like a little mini city here. We have more than 200,000 children, but that is the initial reaction. And it's my reaction when I say we have 1.6 billion. Well, how much do we really need? SUPERINTENDENT HORNBECK: Well, I think you've posed one of the problems we face, 'cause in any of our worlds, $1.6 billion is a lot of money.
It's a lot of money, right. SUPERINTENDENT HORNBECK: And that's the reason, in my view, it is useful to think about it not in terms of the total but how much is it per child.
Right. SUPERINTENDENT HORNBECK: And in Philadelphia last year, the per-child amount was 130 6/5/00 - FISCAL STABILITY - RES. 000232 $6,969. And if you run across our respective political borders here, you would discover that it is about $1900 more than that, or about like $8900 per child. And when I was talking about spending more on instruction and less on administration and these other things, I was talking about, to some extent, the same categories -- that is transportation and what it takes for the buildings and the custodians and the central office and all of that stuff. And so what it's saying is that on those kind of things, we spend less in Philadelphia than is spent on average in those other 61 school districts in Southeastern Pennsylvania. And if you want them to look across the State, we spend more on instruction and less on those other things than is spent on average in the other 500 school districts. And that doesn't even acknowledge the fact that we have administrative expenses here that they don't have. For example, the 440 security officers that are budgeted next year. We have far more security officers per kid than anybody else does, but those are part of 131 6/5/00 - FISCAL STABILITY - RES. 000232 administration, and they get counted in our administration, where we already spend less than the other people spend. And, similarly, with other challenges that we face in that process that just don't exist out in -- because the nature of the needs of our kids are different. So if you could actually strip out of our budget the stuff that is unique to us, like security officers, and then look again at the administration, we would be even lower. But even with them in, we're still lower than the other guys, because we do believe that out of the dollars we have, good stewardship requires that we put it into instruction first. And so, I mean, people say to me, if you haven't gotten any more money, then how the heck did you have full-day kindergarten and how did you double the amount of money on books and triple the amount of money on computers and do all these other things? Well, the way we did it -- it's not magic. There were two ways. We went out and raised money from private sources and that kind of thing and we shifted money from where it 132 6/5/00 - FISCAL STABILITY - RES. 000232 used to be spent on administration to where it's spent now, and that's on instruction.
Okay. I have a couple more questions too, Madam Chair, but I still believe that we need some other type of session. If Council and the Administration and the School Board are really going to work together, then we need to be more knowledgeable about this whole financial picture as it relates to the School District. SECRETARY KAHN: Well, let me just say, Councilwoman, that we absolutely agree with that, and I think that also ties in to Councilwoman Reynolds Brown's point, which is, when you ask about $1.6 billion, it's hard enough for those of us in Philadelphia who know the City, who know the system so well, and have some appreciation for its size, you know, its enormity, its complexity. Take that, you know, some miles west to Harrisburg and it becomes extraordinarily difficult for people. And I've have that said, you know, to us from staff and members and people on the Administration and been on all sides of the aisle, and people just can't get their arms around that 133 6/5/00 - FISCAL STABILITY - RES. 000232 and appreciate. So, you know, all of these points are dovetailing very, very well.
And we've started a process, led by Mike Masch, where we're breaking down the budget and rebuilding it in a way that we think is more understandable to people, more as a communication piece. And I'll just give the first step of how we're conceptualizing this in this is terms of communicating how the budget is built. And Mike Masch takes credit for this concept, but I like it so I'm going to repeat it. If you take 1 teacher with 33 kids standing on a street corner, without any books, pencils, buildings, electricity, buses, police principals, that's $400 million?
Mike does it better than I do. So $689 million is the teacher standing on the street corner with 33 kids. And then we have to, from there, layer on the other costs of running the school system.
Actually, one of the 134 6/5/00 - FISCAL STABILITY - RES. 000232 things that was interesting when we looked at how the dollars were spent, and we do have lots of charts, which we don't need to go through today, but I'm happy to come back and talk to you about them. It was interesting when we looked at just teachers, principals, counselors, and books, that accounts for more than $800 million. That's out of every $2 that we spend just on those items. And the other thing that we did, and we need to do a better job of doing, particularly in Harrisburg, you're right, when we talk about $1.6 billion, it's huge. It's really $41 per day per child. And out of that, what we spend on administration is cents out of every dollar. So if you start to parse it out and just, you know, get it into real numbers, it becomes more meaningful.
Okay. Yeah, we need that, 'cause these were just a couple examples you gave and are, you know, really very helpful.
Right, okay. 135 6/5/00 - FISCAL STABILITY - RES. 000232
I'm giving Mike a couple days off. And then, you know, the next phase for us is really the communication piece. It's going to be critical to not only work in Harrisburg but even more critical, you know, here locally. We really do have to get this story out and told better, and the format that we've used for our budget book and all of that, you know, has not historically been designed, in my opinion, to be as helpful as possible.
That's true. And even though they've talk about the formula, I'm glad people raised that question earlier. That's something I've always been pretty confused on. And I asked someone this morning again to sit down with me and show it to me on paper because if we're going to say that the formula needs to be changed, then we have to know what we're changing from to, you know, that's going to help us. And it's really very, very, very confusing. But I have a couple other questions. I have a school in my district, and the principal has been here a couple times during School Board hearings, and the Reading Recovery Program is a 136 6/5/00 - FISCAL STABILITY - RES. 000232 program that's being used, that people say really works. It's hailed as one of the best programs here. And if that's so, then why are they calling me to tell that they, I think, lack $9,000 to have Reading Recovery in the upcoming school year? Does that cut take place at the school level or at the cluster office level?
Well, on the programmatic piece, I'll -- you know, I think we should wait for Superintendent Hornbeck, because I don't know that any of us are qualified to answer. But there are -- what we did was, when you look at the elementary, middle, and high school budgets, left that alone. Now within that, there may have been some schools that got more, some that got less, depending on their enrollment in the operating budget. If they were getting Title I dollars poverty funding, they may have had that changed because of changes in their poverty rates. I believe -- and I'll ask Rhonda to confirm -- that we did lose some Title I money this year because our poverty rate went down. Or, 137 6/5/00 - FISCAL STABILITY - RES. 000232 in other words, you know, our population is not as poor as it was last time. So that has had an impact, you know, in some individual school budgets.
Do you think the poverty rate increased due to welfare reform, more people working now?
I think it's probably a function, and this is just speculation. It's a function of a strong economy and that income in other places has gone up by a lot more than income has gone up here.
It's also because some the population is charter school population, and the charter schools are eligible to apply for Title I. That comes out of a pool that would otherwise come to the District.
Okay, good. And there are a couple of items that you talked about in terms of the budget cuts. I have a few questions on those. What would be the rationale for consolidating the disciplinary schools from 4 to 3? I think when we went to Houston, someone made 138 6/5/00 - FISCAL STABILITY - RES. 000232 a statement that there are 5,000 children in Philadelphia that would be in the category of those needing a disciplinary school. So if you're going to consolidate one of those schools into the other, what does that do in terms of the need? 'Cause I know with CEP coming in, it's not really going to be able to serve the total amount of children that they're going to be contracted to serve in the very beginning. At least that was the original plan. I don't know whether it's changed with them now coming in January.
We should let the Superintendent talk about the programmatic impact, but I can tell that you when we looked at the budget cut, it did not assume that we would eliminate any teachers. And, in fact, it's believed that there is extra space in the existing two schools that would remain. It's a matter of moving the staff there and having some consolidation at an administrative level, and that's really all that is contemplated.
Excuse me. Do we know at this point in time which school will 139 6/5/00 - FISCAL STABILITY - RES. 000232 be closed?
Council President Verna, what we did was, we looked at -- the Finance Committee looked at the budget and saw that in terms of capacity, you could fit the same number of students that are currently in three schools into two and that -- so budgeted according to that potential savings, budgeted the savings of CEP opening in January instead of September, as you've been briefed, it's -- that program is running behind. Now, we've asked staff to do it because that was the basis on which the Finance Committee made the recommendation and the Board adopted the budget. Now, this week, the Finance Committee Chair and the CFO are meeting with the Superintendent and the various department heads, including people in charge of remedial disciplinary schools and looking at, you know how they propose to effect the savings. What you have is the basis on which we made that budgetary decision. They may think that they can do something differently. They may think that, you 140 6/5/00 - FISCAL STABILITY - RES. 000232 know, able academies that I know the President has spoken of before, they may think that maybe there should be a change there instead of a consolidation. We want to give the programmatic people, the educators, a chance to come back and tell us if they have another way of doing it and what that way would be.
I want to get this clear in my own mind. I don't know how we can say we have a savings of $475,000 with the closing of one discipline school. How do we arrive at that figure? What do we then do with the building? It's going to be a vacant building. Where will the children go? You say there are two other schools. How can you say you're saving $475,000 when you can't tell us what school you're closing?
The administrative costs, actually, for all three schools and the 141 6/5/00 - FISCAL STABILITY - RES. 000232 cost for -- we're talking basic building support -- a maintenance engineer, utilities -- they're all fairly comparable. You know, the difference might be $20,000 up or down, but they actually have similar budgets for administration.
But where are the students going, and wouldn't that cost us more money? Wouldn't we have to have personnel to --
The teaching staff would move with the kids. We're not eliminating any teachers in this analysis, and there would have to be --
Do you have more teachers in one of the disciplinary schools than you have in another? I mean, you're really not giving us any information at all on this. And in March, we were told that the Community Education Partners Program would commence, I believe, in November. Now, today, we're hearing it will not commence until January. We still don't know where that's going to be located, how many pupils will participate in that program, and where will the students come from. 142 6/5/00 - FISCAL STABILITY - RES. 000232 I think I'm talking to somebody. SECRETARY KAHN: Let us just try on the projected savings again. I think that what was taken into account to reach the $475,000 figure is the cost of the administrator in the building, the principal, the building engineer, other positions, other --
Other support positions -- the secretary and the utilities and the running of the plant.
I'm sorry. Now I'm stepping over the President's question, which, I think, was over Councilwoman Miller's. I think what we're having difficulty understanding, or at least I am, when you say that you save that money from not having those people at School X, but you are not laying anyone off and all of those people are going to go now to Schools Y and Z, how do you save money?
It's actually what we've kept intact is the teaching staff. The savings that we've talked about are just the administration and the maintenance of the building. 143 6/5/00 - FISCAL STABILITY - RES. 000232
I can't speak to that yet. SECRETARY KAHN: You know, depending upon the other needs within the system, it's possible that employees will be transferred to vacancies, building engineer positions that would be vacant in other buildings through attrition, you know, or any other needs. And we won't know that until --
These are positions that are already budgeted for but not filled? SUPERINTENDENT HORNBECK: That's the way it would happen. I mean, one of the -- I mean, take the administrator. We've got, you know, of course, hundreds of places and vacancies all the time, including people who are leaving us to go get paid decently in the suburbs. And so we can absorb that level into the rest of the system without a layoff and still -- into vacant positions, just like you just said, and still save the money from not paying them, because we'd hire somebody else to go into the other positions. 144 6/5/00 - FISCAL STABILITY - RES. 000232
But you have budgeted apparently for that position, albeit unfilled, right? SUPERINTENDENT HORNBECK: Well, there's a revolving -- I mean, like today -- on August 15th, there will be another position unfilled for a while, the superintendent. Yesterday, nobody knew that. There are going to be principals that will announce that they're going to be leaving tomorrow. There are -- in any large institution, there are going to be vacancies at any given moment. What we would do with, for example, the administrator and a position like this would be, instead of having the person there and instead of hiring another person into one of these vacancies, we'd take that person and put them in there and cut that position out altogether and save the money.
All right. I'll come back on that issue on my own time. I apologize.
May I follow up on that for one moment? 145 6/5/00 - FISCAL STABILITY - RES. 000232
If I may. Is this a City-owned building that we're closing, or is it leased space that the school may be -- SUPERINTENDENT HORNBECK: No. If I remember correctly, each of them are School District-owned buildings.
So even if the building were closed, wouldn't we still have to pay for some type of maintenance? SUPERINTENDENT HORNBECK: It would be --
We would have to weatherize it, I'm sure, and do all of the things that would have to be done so that the building would not be so badly deteriorating after two years that we'd have to demolish it. SUPERINTENDENT HORNBECK: Yes. Some of those kinds of things would be necessary, yes.
And with all of that being said, we're still going to be saving $475,000? SUPERINTENDENT HORNBECK: It's my understanding that that's the estimate.
Councilwoman 146 6/5/00 - FISCAL STABILITY - RES. 000232 Miller, I really apologize. I didn't mean to --
I may make you unhappier 'cause I would compute it at a higher savings. These people, the maintenance people that you would be transferring elsewhere, represent a savings, because if you didn't transfer them elsewhere, "the elsewhere" would require additional appointments, wouldn't they?
No, no. They already are in operation, Councilman. That would already be in operation.
No, but they say they have vacancies, they're going to transfer these people to vacancies that exist.
Are the vacancies in the budget as vacancies, or are they already calculated for? We don't know that. SUPERINTENDENT HORNBECK: Generally 147 6/5/00 - FISCAL STABILITY - RES. 000232 speaking, there are X-number of positions in the budget, and they have dollars behind them. And at any given moment, those positions with dollars behind them are filled or not filled, and that will change from day to day, just like in a small city with as many employees as we have. And then there is, as you know, a salary savings that is taken in the preparation of the budget, and those things together constitute how much money there is in salaries over a year.
Okay. Superintendent Hornbeck, how many School District employees are there? What's the number of School District employees? SUPERINTENDENT HORNBECK: About 28,000 full-time.
So you have an average daily vacancy rate of -- 'cause I think 148 6/5/00 - FISCAL STABILITY - RES. 000232 for myself, you know, we're trying to get people jobs all the time, and lots of places don't have a lot of vacancies. So we're not -- I'm not in the -- my mind is not in the mindset of vacancies 'cause so many people just aren't hiring at all. So you have a average daily vacancy rate of -- SUPERINTENDENT HORNBECK: I can tell you what it is for teachers; I can't tell you what it is as a whole. For teachers, we have a vacancy rate of between 1 and 1.5 percent on a daily basis.
I think you're going to have more too, because the article that was in the Inquirer a few weeks ago -- I've had two people say they were going to go to Pennsauken to apply, and another young woman, who's in college right at the moment, is going to change her major to accounting because of the low salary that Philadelphia offers. She was, you know, going to -- wanted to be a teacher, but she's changed her mind because of that article. SUPERINTENDENT HORNBECK: Well, the average starting salary in Philadelphia is $3300 149 6/5/00 - FISCAL STABILITY - RES. 000232 below what is paid on average in our marketplace in the surrounding suburbs. And within years, 4 it's $10,000 less. So we lose lots of people as a 5 consequence of that inequity. 6
Okay, I have two 7 other quick questions. 8 In the budget list that you're talking 9 about that you propose, what cuts are being made 10 in transportation? And also, what does the elimination of professional-growth funds for non-represented employees mean? What is that exactly? What is the fund, actually?
The professional-growth trust fund that's being reduced was established under a CASA contract of many years ago, and it required that it we maintain a training fund for CASA employees, which we will continue to do. This is administrative training, and as we looked at the administrative training dollars available across the budget, we feel that there was enough cushion at least going into the next year.
Okay. And what about the transportation up here, up at the top?
As President Ramos said, 150 6/5/00 - FISCAL STABILITY - RES. 000232 and we don't take this lightly, we come out to staff with recommendations based on meetings we've had with them as to cuts, but we need them to come back to us and talk about how those cuts could be effected.
Okay, okay. So this is really something that's been proposed, looked at, but it still has to be more defined?
We need to go through various cuts before we can implement the cuts, yes.
Mr. Ramos, how many people will participate in the Community Education Partners Program? And where will the students come from? SUPERINTENDENT HORNBECK: Our expectation is that there will be about 800 in the beginning and it will grow to a maximum of 1500 under this contract, and they will come from all over the City.
And that will 151 6/5/00 - FISCAL STABILITY - RES. 000232 be in one facility? SUPERINTENDENT HORNBECK: That has not been finally, finally determined.
Wherever that facility is going to be located, I strongly, strongly urge that the District Councilperson be notified. I mean, since it's such a secret, I don't think it should be a surprise to the District Councilperson. SUPERINTENDENT HORNBECK: Well taken. And I honestly cannot tell you at this moment for sure myself where it's going to be located, but as this unfolds, we will include notifying the District Councilperson.
And we've been told repeatedly, President Verna, that they're not going to be able to have a site up unless they consult with the District Councilperson, so they understand and they have been told.
Are they going to have to build a facility? Or are they looking for -- you don't know? SUPERINTENDENT HORNBECK: The practice 152 6/5/00 - FISCAL STABILITY - RES. 000232 in all the other places is to take an existing facility and redo it to their specifications.
Well, I guess the school that you would be closing wouldn't fit their requirements? SUPERINTENDENT HORNBECK: It doesn't. One of the requirements is that it all be on one floor.
Mm-hmm. SUPERINTENDENT HORNBECK: For line-of-sight security reasons. And so that was one of our first questions, too. Why don't you just take this? but it doesn't work in the same way.
Thank you. The Chair recognizes Councilman Cohen.
Does the fact that the School District covers a city and a county have any impact on the funding by the State? SUPERINTENDENT HORNBECK: It has a huge impact. About two years ago now, Greater Philadelphia First actually did a careful study of the relative position of Pittsburgh inside of Allegheny county and Philadelphia inside of 153 6/5/00 - FISCAL STABILITY - RES. 000232 Philadelphia County. And as your question implies, there are county costs that are picked up by non-Pittsburgh municipalities for Allegheny County. And they determined in the study that if we were able to enjoy the same situation proportionately, that it would permit Philadelphia to spend $22.50 more per child in education. And examples include things like the courts, other health and welfare functions, things that in Philadelphia County, Philadelphia taxpayers have to pick up entirely; whereas in Allegheny County, non-Pittsburgh but Allegheny County residents pick up a share of those county costs.
But how does that affect State's funding of the schools in Philadelphia? SUPERINTENDENT HORNBECK: Not at all. It makes the State's funding, in my judgment, of schools in Philadelphia more unequal. It's one of the reasons that Pittsburgh City is able to spend almost $10,000 per child. SECRETARY KAHN: Yeah, and I think that's the point. In the sense that because the 154 6/5/00 - FISCAL STABILITY - RES. 000232 City bears those additional county burdens, it then limits the City's ability to fund the schools and, therefore, the State can look at the effort, you know, that goes into funding schools by the municipality and really, in effect, not -- you know, sort of ignore what it is that the City needs to assume because of its county burdens as well.
All right. Second, legal expenses. Could you at the next time be prepared to discuss what the budget is for your law department? I don't know what you call it, "the legal staff" or the law department"? And what you spend on outside counsel.
And, lastly, I think the Superintendent spoke of the State's share of educational costs having gone down. I'd like to ask you about that because my understanding has been that Governor Ridge always proclaims that he is an education governor, and during the approximate six years of his term, that the State has increased its funding. If you have any information on that, I'd like to hear it. 155 6/5/00 - FISCAL STABILITY - RES. 000232 I gathered you say the State has cut its share from what used to be close to 50 percent down into the 30s. SUPERINTENDENT HORNBECK: Well, it's more than 50, down into the 30s. That has not occurred simply during Governor Ridge's tenure in office. It's occurred over the past or 9 years. 10 But it is true, and we can get you 11 these numbers too, that if you look at the past 12 five administrations two Casey, two Thornburg, and 13 one Ridge, the Ridge increases in education have 14 been by far the least. 15
Could we have that 16 information also at the next session? 17 SUPERINTENDENT HORNBECK: Be glad to. 18
Thank you very much. I'd like to go to the Act 46 and this new Education Empowerment Act. I'd like for someone to explain what they are. What do they 156 6/5/00 - FISCAL STABILITY - RES. 000232 do, how do they impact on us and --
Richie Feder was here from the City Law Department, and we will track him down. In the meantime, on behalf of Councilwoman Tasco, if we can ask the School District or any of its representatives to give us a brief overview of both Act 46 and the empowerment bill to which Councilwoman Tasco made reference, and give us your explanation of those two acts and how they affect the School District and the City.
First, at a general level, I understand that there is a handout that summarizes the Educational Empowerment Act.
And you have a memo from Bill Epstein that summarizes the Education Empowerment Act? It's a memo format. 157 6/5/00 - FISCAL STABILITY - RES. 000232
I don't have that, I don't believe. It's not in my folder.
Our Office of Government Relations has a summary of the Education Empowerment Act that's very, very tight, and we'll make sure that you get a copy of that.
Okay, all right. And Mr. Feder has returned to the room, and he will approach the witness table. (Witness comes forward.)
Good afternoon. I asked for an explanation of Act 46 and this new empowerment -- Education Empowerment Act. What is the difference between the two, what are the similarities between the two, and how do they impact on the Philadelphia School District?
Okay. Councilwoman Tasco, my name is Richie Feder, and I'm Chief Deputy City Solicitor for Appeals and Legislation, and I apologize. I stepped out for 30 seconds.
We caught you. How 158 6/5/00 - FISCAL STABILITY - RES. 000232 dare you leave here after sitting there for four hours, waiting to come to that witness table.
I can certainly tell you about Act 46. I could just give you very brief comments on the Empowerment Act, which I think the School District people really understand better than I do. But Act 46 essentially authorizes, as you know, the Governor to take over the School District by appointing a School Reform Commissioner, I believe they call it, in the event of certain triggering events. The most notable one is that if the School District passes what's called "an invalid budget," i.e., a budget which does not balance. And if, in fact, that happens, the Governor has the right to immediately step in, suspend the Superintendent, appoint a new CEO and a School Reform Commission composed of one appointee by the Mayor, three by the Governor, and Secretary of Education himself. And it would essentially allow them to run the schools free of many mandates that the School District is currently subject to. 159 6/5/00 - FISCAL STABILITY - RES. 000232 The Empowerment Act, which --
This is just, I understand, for the cities of the first class, and that would impact only on Philadelphia and Pittsburgh?
Only on Philadelphia, Councilwoman Tasco. This was passed especially for us.
And the Empowerment Act, however, is a statewide act, which essentially allows the Governor to declare certain districts academically distressed -- that's my words, I'm not sure if that's the words that the Act uses. And if certain district don't meet certain performance standards after a certain number of years, the Governor will give the local district significant funding, which the School District people talked about before. But if they don't achieve certain levels after a couple of years, the schools again can be taken over by the State.
Okay. Thank you. Now, on Act -- on the empowerment -- Education Empowerment Act. 160 6/5/00 - FISCAL STABILITY - RES. 000232
I apologize. That second one -- the academic one is the academic -- SECRETARY KAHN: Yeah, I can speak to aspects of that of if you have particular questions, however you want.
Well, let me look at what I have. I have, I guess, a summary of the bill before me, and it states that -- a lot of things. I guess the question is, could -- one of the questions would be, we wouldn't like a takeover, but would it help us or harm us? Do you get more out of it if you're taken over? SECRETARY KAHN: I don't think so, necessarily, although one of the problems with the bill is that there is -- because of the way it's written right now, on the funding aspect of the bill, you receive an annual allocation as long as you continue to be on this eligible list as an education empowerment district. The fact is, once you improve to the level at which you are no 23 longer eligible to be on the that list, then the funding ceases. The powers and flexibility that are granted to the District under the Act 161 6/5/00 - FISCAL STABILITY - RES. 000232 continue, but the funding right now ceases.
And going back to this formula, I guess, under the basic education funding, it says that the bill provides Commonwealth funding for the '99-2000 school year for basic education, which shall consist both of an amount equal to the allocations for the '98-'99 school year and a base supplement payment to qualifying school districts. The bill provides a formula for the base supplement to be calculated for the 2000-2001 school year and adds a growth in poverty supplement. What does that mean. SECRETARY KAHN: Well, there was -- I think this is right, I haven't looked at it for a while. There is a per capita or a per-student allocation based on average enrollment of $75 per student. And what they did in the course of the legislative discussions with the bill, there was added into it a sort of a floor so that each qualifying school district was promised -- I think it was $450,000 was the floor. And so that was added in addition to the formula. But that was based on, I think, the poverty supplement as well. 162 6/5/00 - FISCAL STABILITY - RES. 000232 But the way the funding is set up, there's a per-student in effect based on enrollment allocation, and that's one of the reasons, or course, or the reason, that Philadelphia receives the lion's share of the funding through this legislation.
Councilwoman Tasco, are you reading from the summary or the bill itself?
Because if I recall correctly, my copy of the bill has the amendment to the School Code, and the first several pages of it are not the Education Empowerment Act. The Education Empowerment Act starts at some point into that bill. So I just want to make sure we're all talking about the same thing.
Well, I don't know what this is, but it says "Summary," and it has an analysis.
This document that the Councilwoman is reading from, I believe, is a document provided to us by the Mayor's Office out of the legislative group. It reads, "Senate Bill 25 No. 652, Printers No. 1922." It's dated May 5, 163 6/5/00 - FISCAL STABILITY - RES. 000232 2000, and it's just entitled "Summary." It apparently came out of the Harrisburg Legislative Research Bureau. SECRETARY KAHN: Again, because the bill was put in as part of the Education Empowerment Act, which built into a larger bill, I mean, part of the School Code, that there's language in Senate Bill 62 that doesn't relate directly to the Educational Empowerment Act. The funding -- and I believe I'm right about this, but we will certainly double-check it -- is, again, a per capita amount, which would need to be -- or a per-student amount, which would need to be allocated and appropriated every year. And, again, for the coming school year, it's $75 per student.
In addition to what you already get from the -- SECRETARY KAHN: Oh, yeah. It has nothing to do with it and does not affect the basic education subsidy or any other funding that Philadelphia or any other school district receives from the State.
In here is 164 6/5/00 - FISCAL STABILITY - RES. 000232 something about serving non-independent schools. Does that relate to you? What does that mean? SECRETARY KAHN: Well, part of the legislation -- and, again, what people in the Governor's Office and the Administration actually refer as to "the toolbox" or "the tool kit" portion of the legislation, which are the kinds of powers and flexibilities that are granted to qualifying school districts. Among other things it, for example, permits a school district to convert a current public school into a charter school, for example, without having to satisfy the current requirements right now under the existing charter legislation. Another action that it permits a school district to take is to establish what is really a very new phase right now, what are called "independent schools" in that legislation, and that was the topic of a lot of discussion, because it was a new phrase and there wasn't really an existing definition of what that was. And the bill does make some attempts to sort of define by describing the characteristic of what an independent school would be. 165 6/5/00 - FISCAL STABILITY - RES. 000232 But I do think that as the legislation gets implemented, again, both here and in Philadelphia and in the other districts, that we and the other school districts will need to be working with the Department of Education to really clarify exactly what structure that would be.
The independent schools? SECRETARY KAHN: Yeah, but as it was described to us in the course of our discussion, it was kind of --
It's kind of like charter schools. SECRETARY KAHN: It's somewhere between a traditional public school right now and a charter school that we all know what that is again through the existing charter legislation. But what we don't have in Philadelphia are any conversions of existing public schools to charter schools.
In a portion of the bill, of the summary that I have, it talks about a School District Improvement Plan, and it lays out a number of things that you would have to 166 6/5/00 - FISCAL STABILITY - RES. 000232 include in that plan. How would you the, School District, presently stack up to what this plan calls for? SECRETARY KAHN: Well, there's a structure, first of all, that's outlined in the legislation, wherein the School District would have to appoint and convene the Educational Empowerment Team.
Wait a minute before you go on. SECRETARY KAHN: Okay.
I'm just talking about the improvement plan and what they ask you to do in terms of establishing academic standards, performance goals, benchmarks and timetables to improve academic performance, revision to curriculum, instructional practices. Aren't you all doing that now? SECRETARY KAHN: We think the Philadelphia School District is way ahead of this (unintelligible) and will be ready to hit the ground running when it comes to the empowerment -- implementing the empowerment legislation. We will need to, as I said, conform to this structure of 167 6/5/00 - FISCAL STABILITY - RES. 000232 appointing this Empowerment Team and doing those things.
Do you have to -- just you're on the list. Do you still have to provide all of the requirements in this Empowerment Plan legislation? Do you have to adhere to this, even though you haven't been declared a district? SECRETARY KAHN: We will be, and I believe the trigger date is July 1, when the Department of Education will publish the names of the school districts that qualify as education empowerment districts that qualify as Education Empowerment Districts, and we will be there. And so, yes, I am sure that we will need to again establish that Empowerment Team. The State will convene its Academic Advisory Team, and we will need to go through the process of developing a plan specifically in response to this legislation and holding the required public hearing on it and all of the steps that are outlined in there. Yes, we will need to that.
Thank you very 168 6/5/00 - FISCAL STABILITY - RES. 000232 much.
I have a follow-up to that question and one other, and then Councilwoman Brown. Is that the mechanism under which you get the $16 million? SECRETARY KAHN: Correct.
You get the $16 million because you have been so far put on the list and you're expecting July 1, that this certification, quote/unquote, process then happens, and then you are subject to all of requirements here? SECRETARY KAHN: Credibility.
Okay. Mr. Feder, let's go back to Act 46 for a second. In the Act, at least as I have it, if this is the correct document, which appears to be 6-696. In small letter h, it talks about the 21 Chief Executive Officer and the School Reform 22 Commission shall direct financial matters related 23 to the distressed school district of the first 24 class and -- and then there are a list of five items. 169 6/5/00 - FISCAL STABILITY - RES. 000232 This has to do with the question around the continued support to the District, should that declaration be made. And I believe the Mayor's testimony and at previous briefings around the $20 million question has been the issue of, is it a one-time grant, or is it something that is in perpetuity subsequent to distressed district status being designated for the School District? Is there any language in the Act that you can discern that if the City of Philadelphia gave an additional $20 million grant somewhere between now and the end of this year, either the fiscal year or calendar year or somewhere into the next fiscal year of the City and the School District, and subsequent to that grant of an additional $20 million, if the State did step in for some reason, by whatever the regulations are in this Act and took over, is there anything in this language that leads you to believe that that $20 million would not have to be given in subsequent fiscal years?
Councilman, the Act certainly contemplates that certain types of payments would become automatically recurring in 170 6/5/00 - FISCAL STABILITY - RES. 000232 future years should a takeover occurs. And that's only if a takeover occurs.
But depending on how the payments are structured or if it's -- depending on how it's structured, there may be ways to arrange it so that is not automatically recurring.
Can you suggest some of those ways based on this language and the way it is structured?
I -- I think that's really a financial budget kind of question rather than a legal kind of question. I mean, if, for instance, payments or charges to the School District are deferred rather than payments to the School District, those would probably not be covered by this. There are ways which can be explored.
Right, I understand that and I plan to go into the issue of what the District owes the City and what the City may possibly defer, but this language --
You are correct, Councilman, that depending on how it's structured, it could become automatically, assuming that 171 6/5/00 - FISCAL STABILITY - RES. 000232 language is enforceable and assuming that language is lawful. But there are also ways to structure it to get it -- I mean, we are going to look into ways to structure it to get around that.
Well, let me not leave that just hanging out there. Is there something about this particular act that you think, either in total or in parts, is not legal?
It is certainly an open question whether the Commonwealth has the power to tell this Council how and when and whether it must appropriate money. In the final analysis, the Commonwealth does hold the purse strings and they do have that wonderful language that they will basically take it out of somewhere else if we don't give it to them here.
So it may be a futile effort, but it is not clear to me that it is Constitutional for them to take your taxing power away from you.
Well, are you questioning whether the Commonwealth has the 172 6/5/00 - FISCAL STABILITY - RES. 000232 authority to, quote/unquote, take over the School District?
No, I'm not, Councilman, but I'm talking about the taxing and spending power of this Council.
And whether or not they can, for instance -- I think the language talks about all taxes authorized to be levied by a school district of the first class or for a school district of the first class by a city or county of the first class on that date of the declaration of distress shall continue to be authorized and levied in accordance with Act and shall be transmitted to the school district. For the first fiscal year apart thereof and every fiscal year thereafter in which the school district is declared to be distressed, the amount appropriated paid by the county or county to the school district shall be in an amount not less than the highest amount paid by the city or county to the school district during any of the three full preceding fiscal years. In addition, the city of a first class shall provide to the school district of the first class all other available local 173 6/5/00 - FISCAL STABILITY - RES. 000232 non-tax revenues, including grants, subsidies, or payments made during the prior year.
What I'm saying is, there are Pennsylvania Supreme Court cases which certainly hold that this body is the only body that has the power to make taxing decisions and that they can't be made by unelected school reform commissions. I am not prepared to tell you that it is illegal, I am not telling you that.
Well, is that decision being made by the unelected School Reform Commission, or is that decision being made by the elected legislature that passed this act?
Well, that would certainly be one response, that the elected legislature has that power.
I mean, I'm not trying to argue their case. What I'm trying to understand is, we have been told that there may be things that can be done, or you could shelter the money or protect it from this particular provision or, you know, give it to 'em in the middle of the night and they not know about it. You know, 174 6/5/00 - FISCAL STABILITY - RES. 000232 whatever various scenarios are, I would just like to understand what they are, what is subject to this, and what is not. I understand on deferral of obligations, you might be able to slip on that one, but, I mean, for that paragraph and three or four others after it, it seems to be pretty clear that anything that's in the realm of taxes, levies, grants, loans, everything pretty much short of a nod and a wink, if they can count it and they know it's there and it happened in the prior year, it's in the pot. I mean is that -- do I have a different understanding than what is here or that any of the district people understand about this?
I mean, that's certainly what the language says. We have not figured out -- the Administration has not figured out how they're going to structure these payments or charges, and working with Council, will hope to come up with a way that it will not trigger that. I'm not saying that it can be done or can't be done. I'm saying that we're not prepared to say that it's definitely going to be covered. 175 6/5/00 - FISCAL STABILITY - RES. 000232
Well, lastly in this area, and then I'll go to the Councilwoman. I mean, is it a fair assessment of our current situation that, I mean, we're pretty much in, for instance, on the million, which started out as 7 a one-time grant, I think, four years ago. I 8 think coming up on fifth year of a one-time grant. 9 I mean, isn't that pretty much now subject to Act 10 46 provisions? 11
Assuming Act 47 is lawful, 12 which is always the better assumption, yes, it is 13 subject to it, Councilman. 14
And is there any 15 reason to believe that if did the 15 million, as we always have done, and now, because of the conversation between the Mayor and the Governor, that an additional $20 million request is being made, which, based on the Mayor's testimony, sounds like a request that will come to this body, that may require action of this body, which means that it will be a public action, which is different than any forgiveness of obligations, which the Mayor may be able to make on his own, without asking anything from us. If it is an 176 6/5/00 - FISCAL STABILITY - RES. 000232 action that comes to this body, more than likely through a transfer ordinance that we will hold public hearings on and vote on, why wouldn't that be subject to the same Act 46 provisions that the current $15 million one-time-over-four-year grant, you believe, is subject to the same provisions? What is the difference?