COUNCIL OF THE CITY OF PHILADELPHIA JOINT COMMITTEES ON FINANCE AND EDUCATION - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, December 11, 2006 10:05 a.m. - - - PRESENT: COUNCILWOMAN JANNIE BLACKWELL, CHAIR COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN WILLIAM GREENLEE COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN JUAN RAMOS COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILMAN DANIEL SAVAGE COUNCILWOMAN MARIAN B. TASCO RESOLUTIONS 060806, 060807 and 060908 - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning. Thank you all for being here this morning. This is a joint Education and Finance Committee hearing on education. Having said that, we're going to ask the Clerk to read the title of all three resolutions, as much testimony will be intertwined. We thank you all for being here, and the Clerk may now begin.
Resolution 060806, calling for City Council hearings before the Joint Committees on Finance and Education to explore the reasons and remedies for the School District of Philadelphia's FY07 budget deficit and to explore the impact the deficit could have on school students, teachers and programs; and Resolution 060807, resolution 22 authorizing the Committee on Education to investigate and conduct hearings related to the reported crisis faced by the City of Philadelphia regarding the high drop 3 12/11/06 - EDUCATION - RES. 060806, ETC. out rate among public school students prior to high school graduation, for the purpose of examining the reported data and exploring corrective measures that can be taken to encourage high school graduation; and Finally, Resolution 060908, calling on the Joint Committees on Finance and Education to hold hearings on the high incidence of truancy among students in the School District of Philadelphia.
Thank you very much. So as all of you have heard, just for the sake to repeat what the Clerk has read, we will hold hearings this morning on the budget crisis, school budget crisis, as well as the dropout rate, as well as the truancy problem in our City. Having said that, let me note that a quorum is here. To my left is, of course, our President, President Ann Verna. To her left, Councilman Savage. 4 12/11/06 - EDUCATION - RES. 060806, ETC. To his left, Councilman Rizzo. To my right, Councilman Goode. To his right, Councilman Greenlee, or as they said on the radio his first week, Greentree, Councilman Greenlee, and to his right, Councilman DiCicco. It now gives us great pleasure to present to you the Mayor of our City. We thank him for coming here to testify on these important issues, the Honorable John F. Street, Mayor. Thank you, Mayor.
Thank you. Which one of these am I supposed to use? I don't know. One is heavier than the other. Who thinks I should use this heavy one? I'll be brief, no matter how long it takes. I want to thank Council President Verna, Councilman Blackwell and the other distinguished members of the City Council of Philadelphia for having 5 12/11/06 - EDUCATION - RES. 060806, ETC. this hearing, especially at this time given the fact that as we sort of roll into the holiday seasons, it would be real easy for this Council to decide that there are more other important things to do than to come here and talk about quality education. I also want to thank the members of the general public who are here, some of which your faces are remarkably familiar since most of us spent a fair amount of hours at the SRC hearings when the topic of the discussion was public education, as we are about to discuss here today. I want to thank Sandra Dungee Glenn, who is here, who is one of the Mayor's appointees on the SRC. I believe she's here representing the Chairman. I will tell you in the presence of these witnesses that she does a wonderful, wonderful job. She rarely ever misses a meeting, and she pays full attention to the activities of the SRC 6 12/11/06 - EDUCATION - RES. 060806, ETC. and the School District of Philadelphia. Quality education has been and continues to be a huge priority for me. Someone once said that the greatest form of economic development that we can do in this City is to develop good, quality education, not just in Central, Masterman or some of our academic or specialty schools, but in every school, every high school, every junior high school, every middle school and every elementary school in our system. All too often families have to make an awful choice when their children become school age. They have to decide whether or not they're going to continue to live in our City or whether or not to move to greener educational pastures where they can avoid the high costs of providing private education. The members of this Council, this Administration and many, many other people have spent an awful lot of time, effort and money making sure we improve 7 12/11/06 - EDUCATION - RES. 060806, ETC. the quality of life and opportunity in our neighborhoods. Literally thousands and thousands of affordable and market-rate housing is now available in our neighborhoods in places and in ways that were not available just a few years ago. As most of you know, thanks to the ten-year tax abatement, which was sponsored by Councilman DiCicco and supported by every member of this Council and this Mayor, there is a significant housing boom in this City, which has done very well for us. But having people move into our City and stay in our City doesn't always work when people have two and three and sometimes more children and face the prospects of a huge, huge bill 19 to send them to a private school. So most of us a few years ago were very, very pleased and we were optimistic with the emergence of the new form of government that we now have running our schools. My notes tell me that we didn't 8 12/11/06 - EDUCATION - RES. 060806, ETC. have a -- and Debra Kahn, I think, did this. My notes say that we didn't have a takeover; we had a moveover. The City of Philadelphia decided to move over and invite the Commonwealth of Pennsylvania to come in and be our partners in running these schools. Now, I know a lot about how that happened, because I was there for every step of the way, and I sometimes have to remind people that the Commonwealth of Pennsylvania's plan to fix funding and to fix the School District of Philadelphia didn't originally include a huge amount of additional funding. In fact, the plan was to take our system, the 220-some-odd thousand children, and pay Edison Schools about a quarter of a billion dollars a year to run the system. Some people still remember that.
And there were some of us who didn't believe that our school system should be run by a for-profit, a fictitious entity in the law, but should 9 12/11/06 - EDUCATION - RES. 060806, ETC. be run and operated by somebody that we could feel and touch and understand, someone that will be responsible to the voters and taxpayers, citizens, parents and those who are invested in public education. And we had a pretty big fight about it. As you recall, we had a pretty big fight about it, because those of us who believed that we ought to have a CEO form of government were committed to that end, and those who believed that we should have some other form of government, privatize our system, agreed to disagree, and in the end, those of us who believed that we should have a CEO form of government prevailed. But at that time, we were facing a pretty significant budget deficit. I hasten to point out that while we had a budget deficit, our system was also making progress. Sometimes it's so easy to forget. Our test scores were up at that time, and there were other 10 12/11/06 - EDUCATION - RES. 060806, ETC. good things that were happening in our system. The problem is, we had an approximately $200 million deficit. For those who are new to the public education issue in our City and in our Commonwealth, the situation then, although it was much more grave financially, occurred in a way that is very different from the way we recently learned of the School District's financial problem. And there are some people who might want to rewrite that history, but I have no interest in rewriting it. Because I was the President of City Council. Many of the members of City Council were here at the time. We complained bitterly that the Commonwealth of Pennsylvania was not adequately funding public education, and we made a conscious decision not to cut programs in the School District of Philadelphia. Ed Rendell was the Mayor, and we had a meeting and we decided that we weren't cutting vital educational 11 12/11/06 - EDUCATION - RES. 060806, ETC. programs and that we were making some progress and that to reduce School District spending in an amount necessary to balance the budget would mean that nothing would be less, nothing would be less. So we didn't have a $200 million deficit by surprise. It wasn't like we woke up one day and we had a financial problem. It happened over a period of years and it happened because the Mayor, the Council President and Councilmembers decided we are not cutting this budget. And I still believe it was the right thing to do. And some people might remember there are those who accused Mayor Rendell and the rest of us as -- they said we're going to run the train right off of the cliff. Anybody remember that? We all talked about it. But we knew at some point in time if our system were going to thrive, we needed a huge amount of additional resources. I'll never forget -- and I do 12 12/11/06 - EDUCATION - RES. 060806, ETC. promise to be brief, no matter how long it takes, but I'd like for this record to reflect some of this information, because I didn't actually realize at the time we were making this decision not to cut the budget, the School District's budget, that I would be the Mayor when it came time to fix the problem that was created, but I still believe it was the appropriate thing to do. And I remember going to Harrisburg and being in a meeting with Governor Ridge for probably three hours, and we talked about public education in Philadelphia and around the Commonwealth and we talked -- in fact, we were in a meeting for so long, that there were people who came and knocked on the door and wanted to know are you all right, is everything okay. Well, yes, everything was okay, but we had to come to grips with the issue. And I remember Governor Ridge said that we aren't going to just pour money into Philadelphia. We aren't 13 12/11/06 - EDUCATION - RES. 060806, ETC. going to just give money.
If there is going to be more money from the Commonwealth, we should be talking about education reform and not just talking about additional revenues for the City of Philadelphia. And then tragedy struck our country. Governor Ridge was summoned to Washington to serve as the Secretary of Homeland Security. Lieutenant Governor Schweiker became the Governor of the Commonwealth of Pennsylvania, and I had to have another long meeting. But we did have that meeting and we did talk to Governor Schweiker. And I'll never forget, Governor Schweiker at his inaugural swearing in as Governor said, The children of Philadelphia are children of the Commonwealth and deserve our support, and he made a commitment that he would help our children. But it didn't come until after we had a huge, huge amount of disagreement. But at the end of the day, 14 12/11/06 - EDUCATION - RES. 060806, ETC. we decided -- and it was really interesting because when we first looked at all of this, there were people who were saying, Oh, if we just ran an efficient system, if we just got rid of all the fat, if we just had a better PFT contract, because there are some people who wanted to blame all of the problems in public education on the PFT and on the contract. And I can remember telling people when I came back from Huntsville, Alabama in 1966 and I taught for a very brief time as a substitute teacher in the public school system, I made more money driving part time for Yellow Cab than some teachers were making in a public school system, and it was right around 1966 that the PFT was started. And I actually didn't agree with that, because I believe that we could have a fair contract and at the end we would still need more money to fund our system. Well, the Governor did impanel 15 12/11/06 - EDUCATION - RES. 060806, ETC. a group of people, and people did look at this system. And one of the inevitable conclusions that was reached was that the Philadelphia public school system probably did need more money. Most of you remember, the City of Philadelphia put in, I think, $45 million of annual revenue. The Commonwealth of Pennsylvania, I think, put in 75 or some amount of money, but there was about $120 million of recurring revenue that came to this system as a result of the agreement that we made with the Commonwealth of Pennsylvania. But that wasn't all. Not only was there an additional $120 million of recurring revenue, but there was about 300 and maybe -- Charlie, do you remember how much money was borrowed? 320 million? MR. McPHERSON: Somewhere around there.
It was about $320 million that was borrowed so that 16 12/11/06 - EDUCATION - RES. 060806, ETC. the School District of Philadelphia would be able to use on an annual basis some part of that $320-some-odd million to balance its budget, because its expenses, everybody understood, were still going to be beyond its revenues even with $120 million of new money on an annual basis, and so we still needed these borrowings. Now, when the dust settled, we had $120 million in new revenues. We also had the borrowings and we had a new CEO. And I think most people were very pleased that it looked to us like our system was on a much stronger financial footing and that we were going to be able to experience some progress in our schools. I hasten to remind people that even as we borrowed $320 million to supplement the School District's annual operating budgets, we knew at some point in time more money would be necessary to run that system, because I don't think anybody believed that we would be able to 17 12/11/06 - EDUCATION - RES. 060806, ETC. shrink the size of the system so that we would be able to live within our means once the $320 million was absorbed. And another thing happened along the way, and most of us agreed with it and supported it. We had a huge, huge, huge increase in the number of charter schools that occurred right here in the City of Philadelphia. I understand between maybe 50,000 and 60,000 children are in charter schools. We have 54 charter schools. There's a huge charter school movement in this City, a huge charter school movement, and I think most of us believe that charter schools have been a valuable addition to our City, an option that parents like, their children like, because it gives people a role in a public school that's not a traditional public school. But charter schools are also a little bit more expensive, so that there were things that happened that we knew would have a financial impact on our system. 18 12/11/06 - EDUCATION - RES. 060806, ETC. Debra Kahn, who was the first local Secretary of Education that I had an opportunity to appoint, was very, very aggressive in support of charter schools, but also said that we need more money from the Commonwealth for the School District to continue to support an aggressive charter school program. Now, you know, I think most people up until just recently were very, very pleased overall with the progress that we were making. In fact, when I came to this Council in January of 2006, we complimented CEO Paul Vallas, Chairman Nevels and all the members of the SRC and we said, Thank you very much for doing a good job. But in January of 2006 in my budget message, I reminded this City and I reminded City Council that in spite of the progress that we had made, in addition to all of the good things that were happening, this system needed to be improved in a dramatic way if we are going to meet the educational needs and 19 12/11/06 - EDUCATION - RES. 060806, ETC. requirements of a world-class city in the 21st century. The progress was good, but it was still too slow. We recognized that we had problems in our system. The dropout rate is too high, the graduation rates are too low, not enough children go to school on a regular basis, truancy was out of control. There are huge issues that are not singular to the Philadelphia public school system. We find them all over the country in urban and many other areas, but we couldn't be so caught up in our progress that we failed to take a look to see where we are going, what do we want our system to look like in the 21st century. Let me tell you, I owe a debt of gratitude to the leadership, to the teachers, the administrators and everyone in the public school system. Let me tell you, every one of my children has gotten an education in the public school system, every single one. And I resent it 20 12/11/06 - EDUCATION - RES. 060806, ETC. sometimes that people think -- I resent two things.
I resent that there are some people who think that because your child goes to the public school system, good things can't happen. A lot of good things are happening to children. A lot of children are coming out of our public school system and doing great things, not only in our City but around our country. And so public education is a wonderful thing, and we've had some great successes. The other thing that sometimes bothers me is this idea that a school should be near perfect in order to justify support and in order to justify parents and children and others making sure their children go to school. I recently appeared at one of the hearings that was being held by our Education Task Force, which I'll get to in a minute, and I stumbled on to maybe 50 to 100 children that were in 11th grade and 12th grade. Some of them were getting ready to 21 12/11/06 - EDUCATION - RES. 060806, ETC. graduate this year. Some of them are juniors. And I had a candid conversation with them, and I said, No school in this City is so bad that you can't go to it. None. It doesn't matter whether or not you have the latest computers, whether or not you have the fancy -- everything that you have, these schools are worthy of your attendance. And I said that to parents at a recent truancy meeting we had up at the Liacouras Center. People have to send their children to school, have to send their children to school. There are children all over this country and all over the world who would kill to get to a school as good as some of the schools we have in the City of Philadelphia, schools that we know need to be better. And so not having a perfect school environment is no 22 excuse for parents or children or anyone else, any caregiver, not sending their children to school. And so I guess it was in 22 12/11/06 - EDUCATION - RES. 060806, ETC. September of this year as part and parcel of our efforts to create an environment where people started to take a fresh look at our public education system. CEO Paul Vallas has been around for over four years. Most people are very familiar with his enthusiasm and the support that he has gotten and the progress that we've made. And we had a press conference and we said, We're going to impanel an Education Task Force. We have some very impressive people that are a part of that group. And we said, We want to just take a look at where we are. We want to take a look back and we want to take a look forward, because sometimes you have to look back in order to have an appreciation for where you've been and how you got where you are in order to have a real sense of where we ought to be going. And this group is out there. It's working. It's having public hearings all over the City. And most of 23 12/11/06 - EDUCATION - RES. 060806, ETC. our public hearings are in the evening. They're in schools. They are well publicized. They're not as attended as well as I would like them to be attended, but, you know, we can't always make people come to where we want them to be, but we can certainly make ourselves available. And so it is our goal at the end of this process to be able to issue a report that says this is where we are, this is the progress that we've made, but this is really where we ought to be going here. Thirty-two, 33 children in a classroom with one teacher and maybe an aide is too many children in a classroom. These teachers cannot survive. )
There's too many children in a classroom. And if we think somehow we're going to get the results that we want with that many children in a class, we are fooling ourselves. 24 12/11/06 - EDUCATION - RES. 060806, ETC. And so we know that there are proven things that we can do to improve the effectiveness of our classrooms and our teachers, administrators and staff and principals, but those things are going to have to be funded, and in order to fund them, we have to know how many of them we think we need, where we need them and how much it costs to buy those services. It is also our goal to look at all of the things that we are doing in the system today, that we're doing an awful lot of things. For example, there are maybe 30 beacon schools in our system, and these are after-school programs that run until 9 or 10 o'clock at night. They are uniformly loved and used when we have them. We should probably have a beacon school in every neighborhood and in most schools so that our young people will have something to do and families will be able to get the support they need as they try to educate 25 12/11/06 - EDUCATION - RES. 060806, ETC. their children. Now, we all got a little bit of a shock just a couple of months ago. We were told that -- and in all fairness, I will tell you that I, too, like everyone else was delighted at the School District's testimony at these Council hearings when the CEO and the Treasurer, I guess the Treasurer or the Finance Director of the School District, said that all of our recurring expenses are offset by recurring revenues and that only $5 million of one-time revenue was including in this budget. The testimony further went on to say that approximately $175 million worth of education reforms are fully funded in the budget. And so it was with a sense of dismay and a little bit of distress that we found out that the School District is facing a $73 million FY06 deficit. Now, the SRC has had many, many hours of hearings. I know how many hours of hearings they had because I attended 12/11/06 - EDUCATION - RES. 060806, ETC. every hour, every minute, every second of those hearings, because it gave me an opportunity to hear the people of this City and their anxiety, their frustration, their hopes and aspirations for the public schools of this City. And I will tell you, those people who didn't -- and I know some Councilmembers had an opportunity to come in and stay for some time, but for me, it was an opportunity to reacquaint myself firsthand with the people of this City on the issue of education. I've never seen a more impressive group of people testify in any venue in any forum ever, and I want to again congratulate the people, particularly those parents and advocates who took their time, who took off work, who came in the driving rain to express their concern for the School District of Philadelphia and to say, We can't afford, the system can't tolerate the kind of proposals that were under consideration 27 12/11/06 - EDUCATION - RES. 060806, ETC. at the time. Now, it is my understanding that the SRC has voted a whole series of reforms, a series of changes that will require the elimination of many, many positions at the School District of Philadelphia, but that those reductions were tailored to have the minimum impact on the educational services that are being provided by the system to our children and to their families. And I want to thank the SRC for its hard work, but, unfortunately, we are not done. And now I want to express a huge concern of mine and everyone else who has been watching public finances in the City and the School District. Some of us have been doing it for decades. We need a five-year plan for the School District of Philadelphia. We need a five-year plan. We need the kind of five-year plan that the City of Philadelphia annually produces and gives to PICA, makes available to the members 28 12/11/06 - EDUCATION - RES. 060806, ETC.
of this Council that state our revenues, that state our recurring expenses and projects them out over a five-year period. I said to Charlie McPherson when I came here today -- and I have the utmost respect for Charlie and all the members of Council's technical staff. It's real easy for me to do. I helped recruit some of them here, and they do a great job. It's one thing to fight about how money should be spent, and we reserve to fight about how money is spent, and we've been fighting about it. We're going to always fight about it a little bit, and at the end of the day, we'll do whatever we do. We're fighting about how to spend. Some people think we should spend more over there. Some people think we should spend less over here. We're fighting about how money should be spent. But the one thing we're not doing is fighting about how much money we have. I 29 12/11/06 - EDUCATION - RES. 060806, ETC. will repeat that. It's one thing to fight about how money should be spent. Some Councilmembers think we should put more in recreation facilities. Some Councilmembers think we should put more in other facilities. Some people think we should have more police officers. Some people think we should have more probation officers. We're fighting about how money should be spent. We can't have that discussion with the School District of Philadelphia today, because we don't know how much money we have. We have not clearly defined the costs of providing the educational services that we now provide, and we don't know how much it cost us last year or the year before that, and, therefore, it's impossible for us to know how much it's going to cost us to provide a similar level of services next year and the next year and the next year. And that is a huge problem. I sent a letter to Jim Nevels 30 12/11/06 - EDUCATION - RES. 060806, ETC. and I asked for a bunch of documents. I asked for a lot of information. I said, Give us this information so we can take a look at it and then we can determine for ourselves the nature of the financial problem that is being experienced by the School District. We received a reply to that letter, and we still don't know. And there are people on Council's technical staff, people in the Governor's office, people in the Finance Department of the City of Philadelphia. We are entitled to know. The general public is entitled to know the details of the finances of the School District of Philadelphia. I want to know if we continue to spend at the rate we are spending, less the cuts that were made, what kind of surplus or deficit will we have at the end of this year. And if we project those revenues over next year, the next year and the next year, what will the financial picture look like. 31 12/11/06 - EDUCATION - RES. 060806, ETC. And I'll tell you why that's important. Because if we don't do that, we will get in trouble. Because right now the City has a projected fund balance of $250 million, and if we project our current expenses and our current revenues into the future, we will have a problem, because we spent more money last year than we took in. And the School District of Philadelphia has been spending more money every year than it is taking in, because if it weren't, then they wouldn't have had to use any of the $300 million, plus borrowings. And so I'm asking, I'm asking this Council, asking the SRC, CEO, everyone who cares and who has anything to do with the School District of Philadelphia, give us an accurate, detailed financial accounting of the money that has come into this system over the course of the last four years. Project our existing expenses on an annual basis in both revenues and 32 12/11/06 - EDUCATION - RES. 060806, ETC. expenses over the course of the next five years. Show us the anticipated additional expenses that the School District is likely to incur out over that five-year period so we can know the challenge.
Now, that's the challenge that we have if our goal is to maintain the current level of education reform, the current level of programming at the School District of Philadelphia, which I think, notwithstanding the great work of an awful lot of people, is inadequate. And I don't want to be misunderstood. I'd rather have somebody disagree with me than misunderstand me. We have a system that has made progress. Scores are up in a variety of different places. There are things to celebrate in our system, but we also have a financial issue. Part of our financial issue is the state of our finances today, because if you had a $73 million problem last year, that means that our recurring 33 12/11/06 - EDUCATION - RES. 060806, ETC. revenues are inadequate to fund the level of services that we were providing last year. And so we need to know how much additional revenue is needed to fund last year's program in view of the changes that have been recently adopted so we'll know where we are. Now, in addition to that, unless we decide that the current level of programming is adequate to take us into the 21st century, we have to take that forward look, because I, for one, believe class sizes are too large. I believe that we need more technology in our system. I believe we need to implement the aggressive capital program that CEO Paul Vallas has been talking about. I believe we need more after-school programming. I believe we need more tutoring, we need more mentoring. I believe that we need the aggressive truancy program that we've been talking about over the course of the last couple of months. It is inadequate. 34 12/11/06 - EDUCATION - RES. 060806, ETC. It is unacceptable for somewhere between 15,000 and 20,000 children to absent themselves from school on a daily basis and feel no necessity on a prompt basis in accordance with state law to provide a written excuse. It is unacceptable. Now, if we have between 15,000 and 20,000 children who might absent themselves on a daily basis, I've said, and some people have agreed with me, that it cannot be only the School District's responsibility to make sure children go to school. It has to be the Mayor's responsibility, the Governor's responsibility, the Council's responsibility. It has to be the Police Department's responsibility, DHS's responsibility. It has to be our community's responsibility. All of us have to be responsible for making sure our children go to school. Because when our children don't go to school, they get in trouble. No good thing can happen to a child that's not in school when it 35 12/11/06 - EDUCATION - RES. 060806, ETC. ought to be in school. They hang out at the Franklin Mills, they hang out at the Gallery, they hang out at neighborhood corner stores. They hang out at the homes of parents who are not properly supervising their children or controlling their places of dwelling. And so we must do something about that. But when we do -- and I am telling you, we're committed, and I've talked to many members of this Council about this individually. I will be coming to this Council with a transfer ordinance and I'm going to say we should put up $3 million and we should increase the number of parent truant officers from 100 to 400 and we should put them out in the street and we should make sure children go to school. You must go to school. And when they do go to school, we cannot send them to the same environment which in many cases caused them not to go to school -- What is this? I'm getting some 36 12/11/06 - EDUCATION - RES. 060806, ETC. attention. Thank you. -- (continued) that caused them not to go to school. Do you understand?
Children that need educational support, that need tutoring, that need mentoring, that need help with their homework, that need somebody looking after them and, therefore, they didn't have it and they didn't go to school, we can't now send them back to school and they find the same environment that they found that in many cases was unacceptable to them in the first place. There's no excuse for children not to go to school. We're not trying to excuse them, but we do know that there is a practical reality that we're going to need more support for these children that we run back into these classrooms. Because we can't take a child who has a history of truancy for two years, now decides that he has to go back to school, and send him into a classroom with 32 children and a teacher that can barely 37 12/11/06 - EDUCATION - RES. 060806, ETC. keep up with the ones that come to school that want to be in a school, so we have to have special arrangements for them. And I've had this discussion with Mr. Vallas, and he has committed that we are going to have the services for these young people when we drive them back to school. But you know what? He isn't going to be able to do it under the current funding structure. As much as he might like to, it's not going to happen. It isn't going to happen. He isn't going to be able to deal with whatever changes have to be made in spending to compensate for the budget crisis from last year's budget, fix that, do whatever is necessary to make sure that we don't have a financial crisis in this year's budget, and provide whatever additional services are necessary when we start making sure children who need to go to school go back to school. And so I have tried to be 38 12/11/06 - EDUCATION - RES. 060806, ETC. clear, because I believe that in order for us to advance the cause and the interests of children in our City, to advance the interests of education in our City and in our Commonwealth and to improve the prospects of having a world-class city that takes care of all of its children, we have to do something about the schools, but we cannot do it unless we come to some agreement on the money. We have to come to some agreement on the money. We might not agree with spending proposals, but we can't argue about how much money we have and the nature of the financial deficit we have for this year and going into the future. So I appreciate the opportunity to come here today, and I guess if we can get a couple of things out of these hearings -- because having spent 19 years here, you can have hearings, but at the end of the day, the hearings have to be worth something. The hearings really do have to be worth something. And I can 39 12/11/06 - EDUCATION - RES. 060806, ETC. look at the faces of every one of these Councilmembers, and everybody here is somebody that I have some real respect for. Let's make sure -- and I will pledge the cooperation of this Administration and working with this Council and the SRC and the Governor's office to make sure -- and I guess PICA, because we're going to get PICA in this and the Controller, City Controller, Alan Butkovitz, who I think is here today, who, by the way, has been vigilant in looking at this funding, for which I am very grateful. He's actually always messing with our stuff, too, but that's okay. That's the job of a City Controller. Let me tell you something, if a Controller is making everybody happy, then a Controller is not doing the Controller's job. At some point in time, the Controller is going to make some people unhappy. But I just believe that we ought to come out of these hearings and 40 12/11/06 - EDUCATION - RES. 060806, ETC. there probably ought to be some kind of a written report. It doesn't have to be 500 pages long, but at the end of the day, we should understand, and it shouldn't take -- it can't take six months or a year. It has to probably be done in the next 30 or so days. We have to figure out where we are on the money. We just have to know.
We just have to know. And once we figure that out, then we can put our heads together, we can circle the wagons and we can say, What are we going to do about this? What are we going to do about this? We can't put this on the SRC. We can't put that on Paul Vallas. We can't blame it on the PFT. We can't blame that on anybody. Let me tell you something, there are two primary sources of revenue for the School District of Philadelphia. That is the City Council of Philadelphia, local government, and the Governor and the General Assembly. And we ought to be prepared to go to Harrisburg in the 41 12/11/06 - EDUCATION - RES. 060806, ETC. spring of the year and fight for revenues, fight for money for the School District of Philadelphia. Can I get an amen? )
Especially the people holding those signs up with my picture on them. Can't you get a better picture than that? I'm over there. Look at me. They got them over there. Over there, they're telling me to stop bickering. I looked over there and I instantly recognized myself. But, you know, we wouldn't have to bicker if we could just figure out -- if we just knew the money. Let me tell you something, I'm prepared to fight for funding. There are some people who might not have been around. It took probably nine years to get the retail liquor sales 42 12/11/06 - EDUCATION - RES. 060806, ETC. tax, and I know Council President was there every time. It took a decade to get that tax passed, but it was needed for the School District of Philadelphia. But we have to understand our challenge, and I am hopeful that in the new year, we will be able to understand our finances. The Education Task Force is going to be prepared to say if we want reduced class size and elementary school, this is what we have to do and this is how much it costs, if we want certain kind of other amenities. I was at a meeting -- this school system ought to have every good program anywhere in the country. We want our children to go to school. We want our parents to be committed to sending them to school. Then there ought to be things for them to do. I once had a conversation with a certain distinguished Councilmember in the Fifth Council District, who I won't name -- I'm not going to tell him. He's 43 12/11/06 - EDUCATION - RES. 060806, ETC. not even paying any attention. But Councilman Clarke confided in me that there was a time in his life when he went to school to play football, because the most important thing for him at that time was football. And there are a lot of times when children, they go through this period of time when it might be football, chess, hockey. It could be something that may not be the academics. But we ought to have an education program that's rich enough so that children can come -- we don't care what reason they come. If they want to come for football, God bless them. If they want to come for hockey, God bless them. Do you know I have a son that came for -- he loved chess. He loved chess. He lived for chess. He plays chess today. He was the President of the Chess Club at the University of Maryland. He loved chess. We don't care. Do we care if it's music, if it's art? We ought to 44 12/11/06 - EDUCATION - RES. 060806, ETC. make sure that there's something at these schools for everyone. No child should be -- (Applause.)
I'll take that. And these schools have to be 24-hour buildings in our City. We need a system that doesn't close the school buildings down when the holidays come. When the children get out of school for the holidays, they ought to still be able to have education, enrichment, recreation. They ought to be able to have activities that can go on in the schools and in the summertime. There ought to be a wealth of activities for our young people. And I don't think we're funded adequately for that, and I think it raises the bar on our commitment to our schools and it raises the bar to the Commonwealth's commitment to education, both in the Commonwealth of Pennsylvania and in our City. Governor Rendell has probably 45 12/11/06 - EDUCATION - RES. 060806, ETC. funded public education in the Commonwealth more aggressively than any recent Governor, and we appreciate that, but, you know, sometimes the answer is more. The unions always say the answer is more, but I think in this case, the answer is more, more funding, more resources, more programs, more things that will improve the quality of the environment in our schools and the opportunities for our children. Now, I went through an awful lot and I want to kind of take a look at my notes for just a minute to see is there anything that somebody thought I should say that I missed.
Mr. Mayor, while you do that, let me note that other Councilmembers have joined us. To my right, Councilman Ramos, who is on these Committees as well. To his right, Councilwoman Miller. To her right, Councilman Clarke, and certainly to my left, Councilwoman Blondell Reynolds 46 12/11/06 - EDUCATION - RES. 060806, ETC. Brown. The majority of them are members of either Finance or Education Committees. Thank you.
Councilwoman, I have reviewed my notes and concluded that I have covered everything. (Applause.)
I've covered everything. And I'm willing to answer some questions, as long as I'm out of here shortly.
Thank you, Mr. Mayor, and let me note for anyone who has come in in the last few minutes since the Mayor began his testimony, I will only say abbreviated remarks. We already said that these hearings are with regard to not only the budget deficit, but the dropout rate and truancy, and we hope to get into that more in detail as the day goes on. The issue that the Mayor mentioned was a deficit that we didn't realize we had, and that's part of the issue, because in 47 12/11/06 - EDUCATION - RES. 060806, ETC. April '06, I have a quote saying that this would be the third balanced budget in a row. So Council has those concerns, and we're also concerned that providing funding will not simply solve the issue and that since the state takeover in '02, the City has provided some 144 million in funding above what was previously provided. Council is equally concerned about the findings of a dropout study conducted at Johns Hopkins University that said only half of the 9th graders in Philadelphia schools would graduate within four years. And, finally -- we only give abbreviated remarks -- we say that truancy is obviously a precursor to dropping out of school, with as many as 80,000 students having more than eight unexcused absences during the last school year. So these are just some of our 48 12/11/06 - EDUCATION - RES. 060806, ETC. concerns and the reasons we are here and that we as City Council took it upon ourselves even before the break to have these emergency hearings to deal with these issues. I will now open the floor to questions for the Mayor. Councilman Goode.
Thank you, Madam Chair. Good morning, Mr. Mayor. Thank you for your testimony.
I agree that one of the things that is most necessary is a five-year financial plan, but I don't necessarily agree that it's not debatable how much money that we have. I'd like to direct my questions, which were not originally intended for you because I didn't know you would be here, around the area of District finances to focus on tax 49 12/11/06 - EDUCATION - RES. 060806, ETC. structure and tax incentives. What changes to the City's tax structure under tax incentive policies do you think would benefit the School District finances? As we look at this, should we be looking at tax policies as well?
Well, I think we should immediately go to 100 percent assessments and we should let the taxes for the School District of Philadelphia grow.
I know. I know. But you know what? At some point in time, the School District of Philadelphia needs more money.
We're having hearings on that in January. We don't agree.
The School District needs more money. The current 50 12/11/06 - EDUCATION - RES. 060806, ETC. assessment system needs work. It needs to be fairer. We don't need to drive people out of -- there are things that can be done that can make sure that residents of neighborhoods don't get hurt, but we should make sure that we allow tax revenue as a result of increases in the value of real estate to grow in a way that funds this system. And that's just one thing. I also think that there are other things that we can do to be helpful to the School District of Philadelphia. Part of the goal of this Administration has been to establish a much more direct approach and relationship between the Department of Human Services and the School District of Philadelphia in providing the social services that will be important to the School District of Philadelphia. For example, under the truancy program, we're going to fund a huge amount of the parenting programs that 51 12/11/06 - EDUCATION - RES. 060806, ETC. will end up being provided by parents that have students in our school system. So there are some things. I'm always a little bit surprised that not more attention was paid to the Tax Commission report that was done as a result of a joint effort by this Administration and this Council. We did this report, and this report said, as you know, that we should do everything we can to level the economic playing field. We have reduced taxes in this Administration by $1.1 billion exclusive of any additional reductions that happen in the upcoming year, $1.1 billion. That's a lot of tax reduction. It's not possible to reduce taxes by $1.1 billion, continue to aggressively fund the public school system of our City, cap assessments and do some of the things that we are talking about. At some point in time, you got to have a little bit more money, and I think this system is going to need money fairly quickly, but 52 12/11/06 - EDUCATION - RES. 060806, ETC. not just coming from local government. It actually has to be a partnership with the Commonwealth.
What about tax increment financing, your opinion and position on that now?
Well, I think the economic development tools that we have right now are the appropriate tools, and I'm not prepared at this time because I know that inevitably the ten-year tax abatement will come up, because it always comes up.
Oh, okay. How did I know that that -- see, I think we have to be very, very careful, because we have made a huge amount of progress in our City in developing our neighborhoods and developing Center City and a lot of areas as a result of the ten-year tax abatement, tax increment financing and the few tools that we have. I remind 53 12/11/06 - EDUCATION - RES. 060806, ETC. people that we used to spend anywhere from $30 to $50 million a year on economic development through the --
-- Commerce Department. That has reduced dramatically. What do we call the program?
Yes, the Economic Stimulus Program. I remember when we had $25 million in there, it was nothing to have $25, $30 million in the Economic Stimulus Program. So this Administration decided that we weren't going to be able to spend that kind of money. I think we have $5 million, because you always have to have some amount of money. I bet you we've cut that Economic Stimulus Fund by 80 percent. I bet you we've cut it on average -- maybe more. 54 12/11/06 - EDUCATION - RES. 060806, ETC. But I'm just not prepared to say at the moment that particularly given where we are in our City, that we should start taking away the tools that we have.
But in short, in terms of tax policy, in terms of tax structure and tax incentive policies, looking at tax increment financing, looking at the real estate abatement, looking at full valuation, all of that should be on the table and you think we definitely should look at full valuation?
I think we should look at it all. And let me just say another something. To the extent that we decide to modify the ten-year tax abatement, it shouldn't happen. It should be incremental. We shouldn't walk in one day and say it's here today, gone today. That would be tragic for this City. It ought to be done in a way that is thoughtful, that is well considered. We shouldn't do anything at all 55 12/11/06 - EDUCATION - RES. 060806, ETC. precipitously.
My only point, Mr. Mayor -- and you know I'm an advocate for economic development resources, but it is still debatable how much money we have because of our tax policy and particularly tax incentive policies.
Well, see, we could fuss about that a little bit, because I think we know how much money we have. If you're talking about how much money we could get or how much money -- or the economic return that we get on certain incentives, then obviously there are all kinds of ways to try to look at that, but when we present an operating budget and a five-year plan -- this is my point, and we know how much money we have. When we present an operating budget and a five-year plan, PICA looks at those numbers, the Controller looks at those numbers, City Council technical staff looks at those numbers, everyone 56 12/11/06 - EDUCATION - RES. 060806, ETC. looks at those numbers. There's no 3 mystery in our revenues and there's very little mystery in our expenses. People pretty much know. Now, that's what I meant. And there's not been a case in my memory -- and I go back 27 budgets here -- there's not been a case in my memory where we looked around one day and said -- I can remember one time when we were less than candid about a budget or two, but it wasn't like we didn't know. And I know there's some people who don't like that kind of candor in a public forum. There have been times in an election year that we kind of glossed over a couple of things.
No. I'm not talking about -- we never considered full valuation, but I'm just saying --
As an example, like full valuation. 57 12/11/06 - EDUCATION - RES. 060806, ETC.
Well, I don't think so. I mean, I don't think that's a good example.
I think you've been very candid about it, but the people who gloss over the issue of full valuation, that is a serious issue as to how much money we will or will not have.
Well, full valuation is -- to me full valuation is an issue of fairness in the administration of our tax assessment program. For me, it's fundamentally a question of fairness. We must have a system that's fair. Now, part of the problem is, it is never easy, and I've thought about full valuation, how do you get there, and I think that there are some things that you can do. You can go to full valuation, but there are some things that you can do to alleviate the negative impact that it will have on people in communities. We're not in the business 58 12/11/06 - EDUCATION - RES. 060806, ETC. of running people out of neighborhoods. But at some point in time, whether it's this year or next year, full valuation is going to have to be something that this government actually takes on.
Are you still committed to capping revenue from the move to full valuation at it being revenue neutral to the five-year plan of last year?
I probably want to talk to representatives of the Finance Department before I answer that question at this time. I would want to have all of the most recent revenue information and expense information. I can tell you -- let me give you an example. Right now we have under consideration reasonable union demands that could cost this government far in excess of $100 million in health and welfare benefits over the course of the next five years, far in advance of that. We have firefighters award on appeal. 59 12/11/06 - EDUCATION - RES. 060806, ETC. They actually came and visited me, as you know.
You could hear them. They were singing happy holidays to me. So it could be as much as $100, $110 million of additional expenses. Before I start talking about capping at what year, I'd really want to kind of take a look at our current finances. I will also tell you that we had an operating budget deficit last year. So these things are moving targets. You can have an operating budget deficit if you have a fund balance of a quarter of a billion dollars, especially if the operating budget deficit is no more than 20 percent of your fund balance. But these things, you have to be very, very vigilant about them, and I would -- but you see, all of 60 12/11/06 - EDUCATION - RES. 060806, ETC. that is the kind of thing that gets discussed in a very open way in this Council when we come up here with an operating budget and a five-year plan. Let me tell you something, we aren't fooling anybody up here on the finances of this City. You got people up here who know as much about this as anybody anywhere, and that's basically what I meant. And there are things that we can do that will cost us money and there are things that we can do that can increase our revenues. I guess my bottom line is that this School District very shortly is going to need more money, both from the Commonwealth of Pennsylvania and the City of Philadelphia, if we're going to maintain the current reforms and especially if we're going to do something to accelerate the kind of progress we think is necessary in our schools.
Mr. Mayor, obviously most of us don't 61 12/11/06 - EDUCATION - RES. 060806, ETC. agree about full valuation. We could do it and then in a year from now, you wouldn't have any of us sitting up here to have a discussion with, because the citizens of the City would vote us all out. Citizens don't want full valuation. (Applause.)
They are worried about tax increases, and we are right there with them. COUNCILMAN DiCICCO: Point of order, Madam Chair, if I may.
Yes, sir. COUNCILMAN DiCICCO: A year ago, October, November '05, I had conducted three days of public hearings on the issue of full value reassessment, and since that time, I've probably had a about a dozen community meetings where David Glancy and some of the folks from BRT went out to explain it. For me, obviously it would certainly be an election year issue. I 62 12/11/06 - EDUCATION - RES. 060806, ETC. think as the Mayor said, the biggest problem is that there are a number of us who believe that full value reassessment is probably the right way to go, but without the tools that will protect long-time residents, we never really could get into that, and that's one of the reasons why I was supportive of not going forward with full value reevaluation immediately, not just because of the election, but because there aren't any safeguards, and until Harrisburg gives us some of those tools, which in many cases we need that legislation in order for us to have those safeguards, I don't think we should move forward either this year or next year. But I certainly think it would be the right way to go. I think it's the fair way to go. And when you look at the value of property in the City of Philadelphia today versus what was the anticipated value, we're certainly much higher in the total value of the City of 63 12/11/06 - EDUCATION - RES. 060806, ETC. Philadelphia. So there may not be the significant increases that some of us were fearful of a year or two ago. So I just want the record to be clear. There were public hearings and it's not that -- I don't want people to think that we kind of buried this thing because we're all going to be faced for reelection. It's a fact that we're all going to have to deal with it at some point, but until we get those pieces of legislation in place in Harrisburg, I don't think any of us should even move on that, whether it's an election year or not. I just wanted that for the record.
Thank you. As my colleagues say, that is a discussion for another day, and we will exempt my colleague from my previous statement. But at any rate, my -- and then I'll call Councilman Rizzo, who has been waiting. We wondered, Mayor, when you fund or try to transfer this 3 million if 64 12/11/06 - EDUCATION - RES. 060806, ETC. you would consider some of the discussions we had when you testified before this Council on our call to action. And we talked about, for example, having those who receive -- they don't call it welfare; TANF assistance, if we could have these parents and maybe this fund could help coordinate parent activities, like those who get checks, being able to work in schools and neighborhood projects, and maybe since you're going to be working with parents, you could help coordinate some of that that. We've been working hard on having other job training activities for low, no 17 income and homeless people and coordinating with GPUAC and others, and maybe this Committee could help coordinate those in a way that deals with this call to action to reduce crime. We want to work with you in that regard.
Well, we certainly look forward to working with you like that. Mr. Vallas will be able 65 12/11/06 - EDUCATION - RES. 060806, ETC. to explain in some detail how the parent truancy officers are recruited, but they're basically recruited out of the neighborhoods through agreements with community organizations. The goal is to make sure that you have parent truancy officers that are from the neighborhood that know the neighborhood, that know parents and children, that know the schools and have a long history of activity and involvement in the schools. And they have been a fierce force in getting children and parents to recognize their responsibility. Their problem has been there are just too few of them. There have just been way too few of them. And when we quadruple their numbers -- four times, is that quadruple?
When we quadruple their number, I will tell you, there will be a difference in the community. So we believe that for 66 12/11/06 - EDUCATION - RES. 060806, ETC. children, you really have to do three things. You got to keep them in school when they are supposed to be in school. You have to keep them engaged between when school is out from the time their parents come home, which is largely 6, 7 o'clock at night after work, when there are after-school programs, and then with our curfew centers, stay off of the street at night. You should be home, not having children wandering around the street at 11 or 12 and 1 o'clock in the morning. And I think I'm looking forward to getting a new curfew bill out of City Council that is going to make it an even more stringent curfew ordinance. The Council President worked with us in South Philadelphia. We put a curfew center as a pilot in South Philadelphia, and it has been very, very successful. The incidence of violence against youth, the incidence of youth being engaged themselves as perpetrators of violence has gone significantly down 67 12/11/06 - EDUCATION - RES. 060806, ETC. since we established a curfew center. And we will have an additional four curfew centers by January of this year and a total of a dozen curfew centers by June of 2007, because children must go to school, children must be busy after school, and children must be home at night. And if you do those three things, we think you go a long way toward improving the prospects of children staying out of trouble, getting a decent education and becoming productive adults in our society.
Thank you. We appreciate that, because this Council has done a lot of work. I'm reminded back when Herb DeBeary was here -- so I'm going back a long time -- when we did hearings on the dropout rate then and we came up with issues like school uniforms. In fact, Mary Mason was a big proponent of that. And we came up with the issue of PP, parent patrols, and I thought about it when I saw some 68 12/11/06 - EDUCATION - RES. 060806, ETC. parents in here the other day with the armbands. We suggested back then in '91 or '92. So Council has been working a long time on these issues, and we're happy to see that little by little we move along, and when good minds come together, we can see some positive results in spite of all of our issues. So we look forward to working with you in that regard. Councilman Rizzo.
Mayor, one of the things we should maybe put on the list to deal with the dropout rate is the fact that I believe in Pennsylvania a child can leave school at 16. Maybe there ought to be a real good look at the possibility of raising that age where they can just voluntarily say, I'm done, I'm not going to go. And I understand there are some other municipalities, some other states that have an age that is higher than 18 years old. 69 12/11/06 - EDUCATION - RES. 060806, ETC.
Well, that is certainly something we should take a look at. I think there's a practical problem with increasing the age too much beyond 16. These children, for all practical purposes, become emancipated. It's just really hard. Unfortunately, we have children today who are years old, 13, 10 15 -- and the parents are very, very 11 candid. Parents will say, I can't do 12 anything with them. Now, the fact that 13 the parent might not be able to do 14 anything with them doesn't mean that the school and society can't do anything with them. We sometimes have to intervene on behalf of the parent. That's the basis for the whole juvenile system. That allows parents to actually come in and say to a court, I need help monitoring the behavior of a child. You should be aware of the fact that we've taken all of that into account in the truancy program, and to those parents who suggest that they are -- and 70 12/11/06 - EDUCATION - RES. 060806, ETC. many of them who are being brutally candid about this, and it is a very distressing fact for them, they admit they can't do anything with their children. Judge Dougherty and the Family Court are fully prepared to bring those children into the court, and if we end up having to give them a serious amount of supervision through any one of the Department of Human Services programs, we will do that. We have the Adolescents Violence Reduction Program. It's a program that is relatively new that is specifically geared to engage a child between the age of 10 and 15 who is on the verge of delinquency but not delinquent. On the verge, not going to school, having all kinds of issues. And the goal is -- and you can get a detailed explanation. The goal is to take that child, that family, and assign that child to a program. It will get a person that will be able to check and make sure it's going to school, because there are 71 12/11/06 - EDUCATION - RES. 060806, ETC. parents who have a very difficult time. But raising the mandatory school age is something that we can certainly take a look at. I'll ask the Education Task Force to look at it, and you can challenge the School District representatives to take a look at it, too. I think there is also a problem with the age children start school. I think children in our City can start school as late as eight years old, and most people think by that time they should be in the second or third grade.
Agreed. Just a moment on the budget. I would love to be supportive of that transfer ordinance, but it's difficult. I know the answer to this question, but the constituents, our constituents, sometimes express a concern. You mentioned earlier about the number of layoffs in the School District. You as the Mayor, we as the Council, how 72 12/11/06 - EDUCATION - RES. 060806, ETC. confident are you that the money that the School District has is being handled appropriately? Do you believe that the School District is running efficiently? Because you have constituents e-mail "how can the School District lay off 80 people and it still run efficiently"? I know the answer to that question, but it's tough to communicate, Mayor, to the constituents that the School District is running or other government agencies are running as efficiently as they can be. That's one of the issues that I hear constantly.
Well, look, this whole business about the sudden nature of the deficit and the amount of the deficit -- because it's not just the deficit. If it were $5 or $10 or $15 million, people would say that could happen in any budget, but it's the amount of the deficit and the sudden nature of the deficit that has caused people a lot of concern. 73 12/11/06 - EDUCATION - RES. 060806, ETC. I have this philosophy or this theory about all of this that I sometimes reserve for people who work for the Mayor, but I'll share it with you at your request. I think every four or five years you ought to go back through and figure out where you might be able to be more efficient. And so it doesn't trouble me one bit that Mr. Vallas can say, I can use 50 fewer people or 75 fewer people. We've reduced the number of people on the payroll of this government by probably somewhere between 800 and a thousand people. I mean, you end up having to do it. As most people know, I was born and raised on a farm, and we had hedges on that farm, and those hedges would grow and grow and grow and grow and grow, and every five years or so, my father would come -- anybody here ever lived on a farm? My father would cut the hedges all the way down, and I remember when he 74 12/11/06 - EDUCATION - RES. 060806, ETC. first did it, I would said, Oh, my God, he's killing the hedges. No, he was not killing the hedges. What he would do is, he would cut them all the way down and then they would grow back and you had an opportunity to shape them. Budgets are like that. Budgets grow. They grow. You put people over here. You get a problem. You put people over here. Now you got a budget that's growing all over the place. And it's not unreasonable -- and we're into the fifth year of the new administration. It's not unreasonable for a CEO to be able to say, You know what, I can trim this budget back, I can cut it back in some areas. Now, you and I wouldn't know, and I've never said that the School District can't do with fewer administrators, fewer support staff. Only they know that, but we will know shortly, because if they cut back too far, then what will happen is, the programs will suffer, because somebody 75 12/11/06 - EDUCATION - RES. 060806, ETC. has to monitor the programs. I mean, in our government the first thing that goes is Public Property and some of those other administrative service entities, but you know what, if you cut them back too far, then no one gets any service. So you have to be real careful. I believe that, by and large, our system is reasonably run and it is not well enough funded. I do believe that there are programs that we are operating now that we probably can let go. We don't need everything that we're doing. Some of the things that we're doing we decided to do as an experiment. But part of our interest in having the Education Task Force work with the School District, work with advocates, parents, Council, everybody, is kind of take a look and let's make some judgments about some of this stuff. We might not be able to do everything. We always did, but there are some core things we should probably do more of and there are some 76 12/11/06 - EDUCATION - RES. 060806, ETC. other supportive things that we should probably do some more of, and there may be some other things that we find have cost us money but might not be worth the trouble that we should eliminate. That's a part of the analysis that the Task Force would like to do with the School District and the SRC and be able to say, Here's where we ought to be going with public education. Look, you don't have to be really smart to know that if you have 14 children in a classroom with an aide or 15 two, you're going to be way better off 16 than if you have 32 children. So that 17 kind of thing is at the top of 18 everybody's lists of further reforms. But we should be looking at all of those things.
Thanks, Mr. Mayor. I'm glad you didn't hedge on that question.
Thank you. 77 12/11/06 - EDUCATION - RES. 060806, ETC. Mr. Mayor, we only have two more questions for you.
If Councilwoman Blondell Reynolds Brown would wait a moment, because this is a follow-up question from Councilwoman Miller with regard to your testimony.
I just want to ask a question regarding AVR -- the Youth Violence Reduction Program.
Right. It's my understanding that the AVRP services children from 10 to 15. 78 12/11/06 - EDUCATION - RES. 060806, ETC.
So what 7 happened with the 16-year-old? We were 8 at a community meeting and this issue was 9 raised, the point was raised, from a 10 couple different providers. 11 What are we doing for the 12 16-year-old and why were they left out? 13
We structured it 14 from 10 to 15 largely on the 15 recommendation of the professionals who 16 believe that those were the children who 17 could most benefit. I sat in a meeting and was told that there were about 3,000 children between those ages that were at risk. I think the thought is that children between 16 -- and I probably should distinguish between the AVRP and the YVRP. The Youth Violence Reduction Program are people who are already in the 79 12/11/06 - EDUCATION - RES. 060806, ETC. system. These are people who already have probation officers. These are people who, for the most part, are at serious risk of either committing or being a victim of serious violence. The AVRP, on the other hand -- and they have to be adults. They're not juveniles. They have to be adults. The AVRP program, on the other hand, was designed to capture people before they got into the Youth Study Center or before they got into trouble, and in point of fact, the focus is on the younger of the children. We find that many times there are families and they'll have multiple children in the families, and we want to be able to service as many of them as possible, but this was -- we did an annual report card, and if you look at those report cards -- and we saw long before anybody was talking about it in the community at large -- we started seeing the increase in violence, both 80 12/11/06 - EDUCATION - RES. 060806, ETC. perpetrated by young people and young people being the victims of violence. It was about two years ago. And we decided we needed to do something about it. We created the AVRP program. I don't think that there was any intention to exclude the 16-year-olds, but the 16-year-olds, they get to be out of the reach of a kind of program like this and they end up getting to be the kind of -- you need more adult-oriented programs for those children that are getting older. I'm more than willing to sit down or have the Managing Director and folks kind of take a look at it if you think that there is a serious gap and a serious need, but that was really the thinking.
Okay. Well, that will be good if the Managing Director or whatever committee takes a look at that, because there is a gap, as expressed by some of the providers. Now, 81 12/11/06 - EDUCATION - RES. 060806, ETC. I originally didn't think there was a gap, because I figured that the 16-year-olds could get service anyway, and I can't really remember the exact circumstances, but this particular kid couldn't get help because he didn't fit into each one of those programs, but I'm sure that there must be something for him.
See, there are a huge number of programs for those children who are in the dependent system because their families are dependent. The juvenile system provides a huge amount of programs for 16-year-olds and others. This is a special program that's designed for children that are not in the juvenile justice system. This is designed to be the ounce of prevention that keeps us from ever needing to spend the pound of cure. We don't want these people showing up down at the police station. We don't want them to be 82 12/11/06 - EDUCATION - RES. 060806, ETC. habitual truants. We don't want them to be trotting around the streets and get into the juvenile system. When I had my orientation to all, we were actually going over all of the programs that we were going to ask the Commonwealth to fund under the needs-based budgets, and I got a briefing on all of that and I asked a ton of questions like we do, and recognized that we needed a program to keep children out of the juvenile justice system as opposed to just kind of letting them hang out and then one day they're down at the Youth Study Center. And so that's all that material.
And I agree. Certainly prevention and intervention programs are basically needed, but it would be nice, and I'll get the information and forward it to the Managing Director.
For the 83 12/11/06 - EDUCATION - RES. 060806, ETC. specifics, and I'll copy you. Thank you. Thank you, Madam Chair.
First, a point of information, if I might, with regards to the state mandatory starting age is currently eight and this City Council has actually introduced a resolution urging the State Legislature to support State Representative Roebuck's bill to lower the mandatory age to six, and we're all waiting to see what the State Senate will do with that bill.
I think we should make them go to school when they're four.
I mean, early, 84 12/11/06 - EDUCATION - RES. 060806, ETC. early, early childhood education.
Secondly, know that we, especially I, look forward to your signing of the curfew bill that should be moving to your desk soon that was passed unanimously out of this legislative body. So we expect that that will strengthen the bill and in many ways hold parents and facilities more accountable who allow children to be out past those hours stipulated. My question goes to the second group of young people you've spoken about, young people who are out during the hours of 3:00 to 6:00 p.m. I should first commend you for your commitment to increasing the number to now 65,000 young people. The facts say that there are still about 35,000 children who have no 21 place to go after school. Now I get more letters and a lot of phone calls around the issue of the quality of our after-school programming. We have our beacon schools. We have the Philadelphia 85 12/11/06 - EDUCATION - RES. 060806, ETC. Free Library providing services. We have Safe and Sound, DHS, and I know that the Rec Department has done a great job in standardizing services to children. What's your perspective or view at this hour given our improvement in the provision of after-school programming to now take a good look at continuum of quality?
Well, when I became the Mayor, we used to joke that some of our after-school programs consisted of herding children into a gym, locking the door and saying, You can't leave until 6 o'clock at night. And they were different children every day and there wasn't a continuum of service, that they didn't have a curriculum and that didn't have regular --
Right. And, in fact, I got criticized -- you wouldn't 86 12/11/06 - EDUCATION - RES. 060806, ETC. know this, because only a Mayor would know this. I got criticized by a lot of people because we started imposing these standards on after-school programs. Because after-school programs and recreation programs are all --
They're not baby-sitting services, and you can't just -- I mean, there were people who were in our after-school programs, they wanted to just be able to go out and recruit a bunch of children and count them on the way in the door and not even be able to identify who the children were, whether or not they came on consecutive or multiple days. We stopped most of that, and we did adopt a whole group of standards, because these are educational programs and they're educational, they're cultural and there's a lot of enrichment that has to take place or else they are a little more than 87 12/11/06 - EDUCATION - RES. 060806, ETC. a baby-sitting program. I think it is fair for you to say to us, Let's just take a look and make sure we're doing everything we should be doing. We have this discussion all the time, and not being the Managing Director or any of these Commissioners, I'm not armed with the kind of detailed information that might already exist, but I will tell you, we don't tolerate programs that are baby-sitting services that don't have real enrichment for these young people. We increased the amount of prevention programs, including all of our after-school programs. I mean, we spend probably $90 to $100 million a year on that programming, which is up in a dramatic way. But it isn't enough. I agree with you. We didn't make sure that these programs are operating. When I became the Mayor, we did an analysis of all of this, and at that time, we were told that we probably needed 100,000 after-school slots in this 88 12/11/06 - EDUCATION - RES. 060806, ETC. City, and I don't know the most recent numbers, if it's 65,000, whatever it is --
It's a huge improvement, and we have probably put at least 50,000 new after-school slots. But I believe every child ought to have an after-school opportunity. It's one thing if parents have other resources and have other plans, can make other plans, but no 14 child in this City should have to leave school and be your traditional latchkey child because there's no place to go or nothing to do. That is a recipe for disaster. Because typically they don't go home and just close the door and stay in the house. They go home, they may get a little something to eat and then they're out in the street. We live in a society today where so many parents and caregivers are all working, and many of them are working 89 12/11/06 - EDUCATION - RES. 060806, ETC. out of a necessity to work. They work in jobs that might not pay a living wage. So, therefore, sometimes the parents have overlapping work schedules, and these children are home all by themselves. There ought to be something for them to do. There ought to be a place for them to be, and that's our goal. And, in fact, as a part of the analysis we do with the Education Task Force, we will talk about after-school programs and how effective they are, how many we need and how they should be funded, because for me, this is a critical part of a component of making a neighborhood a safe, special place for children and families.
So in short, the Education Task Force is going to look at the issue of quality?
All right then. 90 12/11/06 - EDUCATION - RES. 060806, ETC.
I think I'm getting a nod from Secretary Barnett that it's on the list.
Mr. Mayor, we note that, as you know, I started out as a school teacher as well in my first life.
And certainly as Education Chair, we have printed and continue to print newsletters. The editor is Ms. Dolores Mohammed, who is Principal and Chairman of the Board of the Essence International School in Nigeria. I serve on that 91 12/11/06 - EDUCATION - RES. 060806, ETC. Board. And we've printed newsletters for daycares who have them at home so that they have an educational component. This Committee continues to do that, for those who may not be aware. We've continued to print newsletters and make them available to daycare providers at home so they have an educational focus, and we've also taken them around the world. There's an open classroom model that is also used that's been taken around the world to deal with basic skills. So this Education Committee is involved in many aspects of education, and we wanted all of you to be aware of that. Councilman Ramos, and then I'm sure, Mr. Mayor, this is the last opportunity. And we're sorry any of you who have to wait, but we will be inviting Mr. Vallas on next. Thank you. Councilman Ramos.
Thank you, 92 12/11/06 - EDUCATION - RES. 060806, ETC. Madam Chair. Mr. Mayor, your advice to us, if I hear correctly, and correct if I'm wrong, is that, one, we should ask the State for more money to fund our schools --
That's not semantics for me, because the State will say, the first thing he did was say the State has to put up more money, and to me, that's too sensitive for me to not mention.
I understand. Two, that we have an obligation to make sure our schools run effectively so we can probably make those 93 12/11/06 - EDUCATION - RES. 060806, ETC. classrooms smaller. What happens in the event that the State of Pennsylvania does not want to increase the funding for our School District? What do you recommend? What do we do?
Because it's obvious we won't be able -- and, again, correct me if I'm wrong. I think it's obvious that we won't be able to pick up the tab to be able to pay. I mean, can we afford to give 20, 30, 40, 50 additional million dollars for our School District? It's probably the right thing to do, but where does that put us? What happens if the State says no, that this is our funding level and we're not going to give you any more?
Well, I don't like to speculate on a negative, because if you start speculating on a negative, you have to be careful. You'll create an environment where you can't get done what 94 12/11/06 - EDUCATION - RES. 060806, ETC. you need to get done. I'd rather think that there are a number of people in Harrisburg that are committed to public education. We have a Governor that's made education a huge priority in his first four years, and I said it's important to both the Commonwealth and it is important to his goals and objectives for the Commonwealth of Pennsylvania. We have a City delegation that is a very, very strong, well-experienced delegation. I believe that we have to create an environment where it will be possible for us to fund public education. I don't think we should -- I don't go to Harrisburg in the spring of the year with a negative outlook. There's new leadership in the Pennsylvania Senate. There are maybe 50 or so new House members who say that they are interested in education and interested in good government in the Commonwealth of Pennsylvania. The first and most important thing is, we have to 95 12/11/06 - EDUCATION - RES. 060806, ETC. be prepared to make our case. We have to be prepared to make our case. And if we make our case, I think we have a great prospect, a great chance of getting some additional support out of Harrisburg. Let me be more specific. I think we've got -- and I've said this and I'll continue to say it without apology. We have to understand the finances of the School District. We have to understand how much money we have, how our money is being spent. We have to project the costs of our programs over the course of the next year and then five years so that we know where we are. We have to determine where we want this District to go, the size of our classes, how many children do we want, the kind of programming that we want that we know works for the City of Philadelphia, that will work for our region and work for our Commonwealth. And then I think we have to develop the kind of alliances around the Commonwealth of Pennsylvania so that 96 12/11/06 - EDUCATION - RES. 060806, ETC. we aren't standing alone. I mean, one of the things that Paul Vallas said at the recent SRC hearings is that we can't go this alone. We cannot go this alone. And I'm sure he'll be here and he'll tell you that. He'll repeat that. We can't go this alone. We have to be in the position where the kind of programs we have and the money that we ask for is supported by Allegheny County and people all around the Commonwealth. I was just at the Pennsylvania Society on the past weekend and I talked to the Mayor of Reading, who has an alliance with Mayors all around the counties out there. They meet on a regular basis. We worked with them when we went to Harrisburg in our efforts to get the Commonwealth to be more sympathetic with the problems of guns and violence. Well, I think we have to reach out to our other areas. We have a delegation that's helping us do that, and 97 12/11/06 - EDUCATION - RES. 060806, ETC. I think you got to create a certain demand for high-quality education in the City of Philadelphia and around the Commonwealth. And then we have to have our delegation saying and the delegation from some of these other places saying, You can't get a budget unless you help solve this part of this problem. You can't get a budget. Let me tell you, this is going to be a tough budget season in Harrisburg. I heard the Governor's comments at the Pennsylvania Society, at the Pennsylvania Manufacturer Association luncheon. I went right there Saturday. I listened to his -- it's going to be a tough budget cycle, but you know what, that's just doing our job. It's going to be tough, and I hate to reduce this stuff to a cliche. But we're going to expand our Convention Center. We're going to bring gaming into the City. We're going to do a bunch of things that are important to our City. You know what, in 98 12/11/06 - EDUCATION - RES.
060806, ETC. addition to all those things, we should take care of our schools, not just in Philadelphia but our schools all over the Commonwealth of Pennsylvania. If anybody thinks the City is the only one who has a potential problem with funding, then you don't know the Commonwealth of Pennsylvania. This Commonwealth doesn't have a distinguished record of funding public education. As I've said, Governor Rendell has done probably a better job than most recent Governors. And I think we have to create an environment, first in our City and then around our Commonwealth, where people will understand the critical nature of our needs and tie them to the future of our City and the future of our Commonwealth. I think you can't do that without reaching to the business community, our philanthropic community. I mean, we have to get all parts of our community engaged, and I think we can get some help out of the Commonwealth. But 99 12/11/06 - EDUCATION - RES. 060806, ETC. it's also going to require that the City of Philadelphia also come up with money, because just as we did with our original program, we came up with money, the Commonwealth came up with money. They're never coming up with money if we don't come up with any money, and I think that's going to be our challenge.
Thank you very much. Thank you all for your patience. I hope I don't have to step out in the hallway for any reason, because everybody wants to go next. Having said that, thank you, Mr. Vallas, for your patience. Mr. Mayor, thank you very much for your testimony. We appreciate your being here and look forward to working with you on all of these issues. Thank you very much. Thank you, Mayor. 100 12/11/06 - EDUCATION - RES. 060806, ETC. Our Controller, Alan Butkovitz, will precede our CEO of the School District, Paul Vallas. Alan Butkovitz, Controller, welcome. Thank you. Good morning. Next will be Paul Vallas.
Thank you. Good morning, Madam Chairman and members of Council. In listening to the testimony on this very complex question of the current school deficit, I'm reminded of a story that I first heard when I was about eight years old, and that involved a skeptic in Europe who went around from rabbi to rabbi with the challenge, Tell me everything there is to know about Judaism while I stand on one leg, and everybody was mightily insulted. There's a lot of complexity to this. You're trivializing it. What do you mean? And he finally came upon Rabbi Akiba, who said, Do unto others as you would have them do unto you. All the 101 12/11/06 - EDUCATION - RES. 060806, ETC. rest is commentary. And pretty much that's the punch line of this. There's really four main points that I want to make and the rest is really commentary. The first point is, this deficit in the current school year isn't resolved yet. I saw that there was an announcement in the Philadelphia Inquirer on Saturday indicating that the gap is closed. Well, the heading is that's not over. Number two, I would endorse as a very sound idea the Mayor's proposal for a five-year plan and note that the School Reform Commission has already adopted policy to see that that comes through. The third is the need for transparency in school budgeting and school spending. And the fourth would be need to give Mr. McPherson and your very able staff another job and get this Council very proactively involved in the review 102 12/11/06 - EDUCATION - RES. 060806, ETC. of the school budget instead of just reviewing a one-page summary. 3 million deficit. 8 million. So right off the bat, there's another $20 million, which is obviously very, very difficult to reach. 9 million that's supposed to be achieved through debt refinancing. 7 million for Fiscal Year 2007. 9 million credit for the current school year. There is credit taken for $5 million under the heading Investigate Refinancing Options. It's a speculative 103 12/11/06 - EDUCATION - RES. 060806, ETC. comment. 3 million in savings as a result of an audit of charter school enrollment that has not yet taken place. It's premature to determine what savings, if any, are going to be available before the audit has been done. So there is a lot of work to be done and there is a lot of vigilance to be exercised on the part of parents and others who are interested in preserving school programs, because they are not out of the woods yet. The next point I would like to make is that just about every participant in government and politics in the City of Philadelphia has been on the right side of the school funding issue for as far back as you can go. This is not a matter of good guys and bad guys. I see signs here about stop the bickering. I'd like to know who the enemy is, because the enemy is not in this room. The City of Philadelphia has 104 12/11/06 - EDUCATION - RES. 060806, ETC. increased its appropriations to the School District over the last four years by $144 million, and this Council deserves a lot of credit because that means that you're taking grief from taxpayers and from other people that would like to see that money spent and, at the same time, an additional $300 million in funding from the State. Plus, the School District was given permission to issue $300 million in deficit bonds, which have now been entirely spent. 1 billion. So the idea that someone has been withholding money is a misguided idea. Money has been showered on this experiment at the same time that we've seen a drop in enrollment from 215,000 to 175,000 students. So the amount of spending per pupil has also increased. We've had a ten percent increase a year in the school budget for four years at a time when inflation has 105 12/11/06 - EDUCATION - RES. 060806, ETC. been three percent. It's a lot of money. The issue is, since there are still unmet needs, why is the 40 percent increase insufficient?
How is that money being spent, and how much money would it take to achieve those objectives? I would parenthetically note that I come into this role both as a graduate of the Philadelphia public school system myself, a 1969 graduate of Overbrook High School, and as someone whose two children are recent graduates of the Philadelphia public schools and who spent 15 years in the State Legislature heavily involved and committed on public school issues. I voted for every single state tax increase necessary to increase appropriations to the Philadelphia schools, including the 2003 appropriation that Governor Rendell earmarked specifically for smaller class size. I took intense pressure from school voucher advocates to support public schools as opposed to the voucher 106 12/11/06 - EDUCATION - RES. 060806, ETC. movement for many, many years and, in conjunction with Representatives John Taylor and Bill Keller and Marie Lederer, led a three-year investigation that detailed the extent of violence in the Philadelphia public schools, which produced a 300-page detailed report and which was heralded by Paul Vallas when he came into town as a template for action. And I think if you go back to the news articles on Mr. Vallas's appearance in Chicago, you will find many instances of love letters between Mr. Vallas and myself. We were partners in that effort to clear up and to take more proactive steps on the violence problem in Philadelphia schools. My job now is to take a cold-eye view at the numbers and to be a referee on these issues. So I want to call to this Council's attention certain trends in school budgeting over the last four years. First of all, there has been an overwhelming increase in no-bid 107 12/11/06 - EDUCATION - RES. 060806, ETC. contracts, which do not require SRC approval. They were $587,000 in 2002. 7 million. The business consultant category for no-bid contracts in 2002 was $13,000. 3 million. Okay? So when there is consideration for cuts in programs that affect children, be mindful that there are other items that have not been put on the table that have experienced extraordinary increases in that period of time. We would point out in the line item budget for the School District there are several entries which are at very large variance with the expenditures. There has -- just give me a moment. In the Risk Management area, for example, the amount that was budgeted for personal services in Risk Management was $217,700. The amount that was spent was $8,322,088. That wasn't the first year that that happened, although the same figure 108 12/11/06 - EDUCATION - RES. 060806, ETC. of $217,000 was also budgeted the previous year and the spending was approximately $3 million. This highlights the need for transparency in the budget. It is not just an internal document. It is not a memo from the School District to itself. It is not something where you're just trying to make the gross numbers at the bottom balance out to a certain figure. Anybody with a financial background has to have their interest piqued at how spending in that item can be 3,922 percent of the budgeted amount. In the same area under Professional Technical Services, the amount budgeted is $25,000. The amount spent is $3,694,000. Now, I'm stunned even at this point, because the constant battle that I've been running into as the Controller vis-a-vis the School District is this idea that would you please just go away because we can manage this as a private 109 12/11/06 - EDUCATION - RES. 060806, ETC. matter, and I think with respect to these signs about stop the bickering, that that kind of reflects the same kind of opinion. But it is not pointless bickering. Those are substantial questions. Those are questions that have an effect on what happens to our children. The Council should be asking those questions. The Legislature should be asking those questions.
The School Reform Commission has recently taken significant steps to reinforce its staffing and to bring in consultants so that it has the expertise to delve in in detail into those questions. Because when you have an area that has grown by millions of dollars that does not provide direct services to children or students at the same time that you're talking about foregoing discretionary money for principals to hire arts and music teachers or cutting out after-school programs or any of the myriad -- cutting out transportation services for children, 110 12/11/06 - EDUCATION - RES. 060806, ETC. policymakers would like to know if there are matters that are more removed from those direct services that can be dealt with first. That is not a matter that I believe should be lightly deferred. School District has undertaken a multi-billion dollar capital spending program and we have seen variously described goals of construction of 75 new schools, new schools. Almost a 12 billion dollars has already been 13 borrowed. Most of it remains unspent. 14 We are many years into the time period where the construction would be done at a time that there has been an extraordinary inflation in building costs caused by a variety of factors, including the reconstruction in Iraq and China's competition now for building supplies worldwide in a massive building program that is going on in China, 53 percent increase in building costs in the first six months in this year alone. That means that if you have an initial 111 12/11/06 - EDUCATION - RES. 060806, ETC. 8 billion to accomplish all that building and it now costs 50 percent more to get the same work done and you have delays that seem to be unending, one of several things is going to happen. 8 billion capital program. It will have to be a $7 billion or a $10 billion program to redeem all those promises. The actions of our office are not being done for purposes of harassment, but for purposes of providing a baseline so that all the people who have an interest in what happens to the schools have a detailed fund of knowledge, as you do when you deal with the City budget, as we did when I was in Harrisburg in dealing with the State budget. It's my personal view that there is going to be a significant tax issue on the floor of this Council after 112 12/11/06 - EDUCATION - RES. 060806, ETC. the beginning of 2008 and that part of that will be with respect to additional funding for the schools. So a clear understanding of what it's going to cost, what you're going to get for it and what you're going to forego is going to be in your lap. The School District needs to operate within the same frame of discipline that the rest of us have to operate within.
Thank you, Mr. Controller. That was excellent testimony. You mentioned specific areas like Risk Management, professional services, building costs, and we hope that when Mr. Vallas testifies, that his people with him will take note to this so that we may hear some response to this issue, as well as issues like no-bid contracts, et cetera. The Controller's testimony is certainly for the public record, as will his actual testimony be on the record, and so we hope that we can get responses 113 12/11/06 - EDUCATION - RES. 060806, ETC. to those important issues. Any questions? Councilman Goode.
Thank you, Madam Chair. Good afternoon, Mr. Controller.
With regard to the issue of tax structure and tax incentive policy again, I want to specifically focus now on tax financing projects. What is your position on TIFs, not just in the past but in the future?
I think it can be a useful tool in stimulating development.
Do you believe that forgiving taxes was necessary in each of the projects that have been approved over the last four or five years?
No. And, again, when I was in the Legislature, I was one of the votes that opposed the 114 12/11/06 - EDUCATION - RES. 060806, ETC. proposal to provide TIFs and other tax benefits to the Comcast project on the basis that a program that was envisioned to provide an initial stimulus to depressed areas, the entire City of Philadelphia has legally been defined as a distressed area, so that people were able to come into very vibrant, profitable areas like Center City and with a straight face argue that they needed no taxes or they needed substantial incentives to do that. I opposed that. So it really depends on the particular case.
Well, actually, most of the TIFs that have been done have been done in Center City, and the truth of the matter is that I've argued for several years that it was taking money away from the School District, it was not necessary to finance those projects. So what position will you take as Controller on future TIFs 115 12/11/06 - EDUCATION - RES. 060806, ETC. related to School District finances?
I think that my position with respect to Comcast would be reflective of our position generally. I mean, if the surrounding area will support the investment without that incentive, it should be done without that incentive.
And what's your position on the real estate tax abatement program?
My personal view right now is that at the time that it was enacted in 1997, there was no 16 building going on and it was necessary at that time, but that it has achieved its purpose of making Philadelphia, in particular Center City Philadelphia, a hot development area that should be able to sustain those types of developments without a ten-year tax write-off.
So that program should be on the table in terms of future consideration? 116 12/11/06 - EDUCATION - RES. 060806, ETC.
But I would agree with the Mayor in terms of a phased reduction, because I'm opposed to doing anything that will be a jolt or a shock that will cause a major rethinking of development projects.
What other recommendations might you have about tax structure or tax incentive policies that you think will affect the School District finances in the future?
Well, you know that I believe that there's been a -- contrary to the concept of progressive taxation, we are in the position of moving in Philadelphia towards an evermore regressive tax situation. Essentially we have a 60/40 ratio right now between wage taxes and property taxes. Wage taxes have been highlighted as a significant issue. We've gone from five percent to four percent. We're going down further. It has been earmarked for reduction as a result of 117 12/11/06 - EDUCATION - RES. 060806, ETC. casino revenues. Whereas, property taxes, both because of the unrealized -- the untapped appreciation of real estate and because of proposed changes in expediting the way that reassessments are done, as well as the proposed full valuation project, we could see a shift in that ratio where half or more of our revenues come from real estate taxes as opposed to wage taxes. That's a problem for a variety of reasons. First of all, long-time residents whose ability to pay is not reflected in the paper increase in the value of their homes, and the very real danger that in gentrifying neighborhoods and across the City people who are too poor to pay the real estate taxes will be driven out of their neighborhoods. Secondly, that the commercial and residential development in the City has in fact become one of the City's leading economic engines right now, and it has to be viewed not just as something 118 12/11/06 - EDUCATION - RES. 060806, ETC. that involves consumers, but as a major business of the City. I really think that we should have a graduated state income tax. The State should be moving in the direction of a greater role with respect to public education on many of these issues and that really the tax restructuring you should be looking at, although it's not within your purview, is an amendment to the State Constitution, because it's very difficult for Philadelphia to achieve the kind of equity and the adequate resources that it needs within the boundaries of the City of Philadelphia.
Thank you very much. Are there further questions for our Controller? (No response.)
Thank you, Mr. Butkovitz. At his request, Mr. Vallas has 119 12/11/06 - EDUCATION - RES. 060806, ETC. asked that some of the students have a chance to speak before him. They probably asked him, as they've been asking me, but at any rate, we have Powel School, Helen Gym, parent, Powel Elementary School. Andrew Broggins, I suspect, is with her as a student, and also Steve Alston, organizer, Youth United for Change. Thank you for your patience. We're trying to do the best we can in trying to move our hearing along expeditiously. Thank you. Please identify yourself for the record and begin your testimony.
Good afternoon, everyone. First of all, I would like to say there's a lot of students here who have probably taken the day off of school because of the timing of these meetings. So first and foremost, I would like to say if any student is here who took the time out of school to be here, can you please come down and join us or stand up. 120 12/11/06 - EDUCATION - RES. 060806, ETC.
My name is Steven Alston and I'm representing Youth United for Change. (Applause.)
Thank you. Welcome. We're happy to have all of you.
Once again, my name is Steve Alston. I'm a 25-year-old lifetime resident of the City of Philadelphia. I'm also an Olney High School alum and proud alumni and staff member of Youth United for Change. I'm speaking on behalf of 7,000 students in five high schools that make up our organization who would have loved to be here but because of the timing of these public hearings could not be. Students of Youth United for Change come from Olney, Edison, Kensington, Strawberry Mansion and Mastbaum High Schools. However, the 121 12/11/06 - EDUCATION - RES. 060806, ETC. alumni of Youth United for Change, while we all make up voters and communities that you all represent throughout the City of Philadelphia. The students in Youth United for Change want to tell the leaders of the City of Philadelphia that it is imperative, imperative to find a way to better support our public schools. Students deserve that the City of Philadelphia use funds in the City's surplus toward education first. We are here today to ask our City officials to work with the School Reform Commission and with the School District of Philadelphia to close this funding gap that is currently hurting students in very, very negative ways. We must find a way to effectively build a long-term strategy and working communication between City and District leadership to fully fund our public schools. And I'll just end by saying, 122 12/11/06 - EDUCATION - RES. 060806, ETC. students of Youth United for Change demand that the adults responsible for funding their public education, we're just hoping that you all can find a way just to work together to protect the future of the students in the School District of Philadelphia, because what that means is protecting the future of the City of Philadelphia. Thank you. (Applause.)
Thank you very much. Thank you very much, Mr. Alston.
Good afternoon. I want to thank the City Council staff members for allowing some of the parents who took off personal work and family time and who were at the bottom of the speaker list to be able to come forward, and also to Mr. Vallas for allowing us to have a moment to speak. My name is Helen Gym. I'm a parent at Powel Elementary School in West 123 12/11/06 - EDUCATION - RES. 060806, ETC. Philadelphia. I'm also a member of the Citywide parents group that's been coming together specifically around the budget cuts. I want to say that I think I can say that every single parent in here has probably had enough of public hearings, of task forces, of consultants paid for studies and reports, while our kids lack the basic necessities in our schools. We are not here -- (Applause.)
-- to testify, to pose for your cameras and to show this support, but we are here to fundamentally demand leadership on this issue of the public schools and the budget deficit that it is now facing. Parents and students came to this City Council last spring to raise our concerns about the School District's budget and to beg this body to ask the right questions, demand answers and provide the public authority that parents 124 12/11/06 - EDUCATION - RES. 060806, ETC. and students at the time lacked. This past summer a group of parents met with every single education committee staff member to discuss the seriousness of this budget. We pressed on even though one Council staff person had the District's budget on her radiator and said she hadn't had time to go through such a lengthy document even though it was late July. This past month the School District held four days of public hearings on the school budget issue. We are very grateful that the Mayor came to every single one of those hearings and sat through more than 12 to 14 hours of public testimony. We were there. Hundreds of parents and students turned out to hear what the District had to say. But where was Council, save Councilwoman Blackwell, who definitely came and we appreciate that. We have been fighting for our schools and our children about this issue 125 12/11/06 - EDUCATION - RES. 060806, ETC. for months on end. So you'll have to forgive me if I sound a bit tired at the idea of yet another public hearing. If you don't want to use your surplus, then we ask you to at least consider your priorities in this school budget. And by the way, what I mean by that is that the City's surplus, which is my wage tax dollars, my real estate taxes, and we have an issue with our public schools in crisis. Number one, we ask you to pay your bills, your rent, your utilities to the public schools. Number two, pick up after yourself. Please consider trash pickup. Number three, pay your own employees. Mr. Butkovitz, you would have a lot more authority if your office and the Bureau of Revision of Taxes were not taking away my children's teachers, my children's art programs and my children's enrichment programs. We have had days of talking and 126 12/11/06 - EDUCATION - RES. 060806, ETC. no promises about our schools. If we are here six months after the hearings in March arguing over the same cuts, if we have not protected our schools and our children, if we have not even restored our funds to them, if we have not made a commitment to class size, to our truancy, to our dropout rates, then what is the point of all this testimony and all the talking? The most we've heard is bickering between Mr. Vallas and the Mayor and the deafening silence from the Council body. So we need to know this is not a charade or a pass at a public process. To all of you who have power and titles and who are appointed to serve our children, we need to know that our kids are not your version of a political football field, a place to trample or to mow under with the notion of fiscal rather than moral responsibility. Parents have fought valiantly and with faith in both the District and 127 12/11/06 - EDUCATION - RES. 060806, ETC. City that you will protect our children, you will place them first. You have the funds to make the difference today. Stop talking, please, and fund our schools. (Applause.)
Good afternoon. My name is Reverend Paul Weeks, parent of a bright young lady in Central High School and two kids in the Jenks Elementary Middle School. To the Mayor, to City Council President and Councilmembers, history will judge all of us ever so severely. God help us if we don't grab this budget by the throat and make it do for us on the front side of our kids' potential. Because that same budget we will see again battling pistols, murder rates and building penitentiaries. God help us. Our kids' future cannot be DOA. This is very critical. We all in this room know how to keep guns out of kids' hands. It's not really a big mystery. We all know how to keep guns 128 12/11/06 - EDUCATION - RES. 060806, ETC. out of these kids' hands. Put a book in it, create a thirst and a hunger for learning. Mayor Street, Council President and members, put an end to this bare-bones educational mentality. Every parent knows it begins with class size and it ends with class size. (Applause.)
Philadelphia public school system deserves to be robust. Councilmembers, $20 million will be like a steel levee that won't break under pressure. We need Councilmembers to step up to the plate and feel real good and real proud about $20 million. It will be like a steel-granted levee that will not break under this pressure. That will, once and for all, seal up and secure our young people's future for generations to come. The $20 million, metaphorically speaking, is a two-point conversion, because in case you haven't noticed, we 129 12/11/06 - EDUCATION - RES. 060806, ETC. are first and goal at the one yard line. There's only time for one more play, a two-point conversion for this win for the City of Philadelphia, no timeouts. An extra point won't do it. One point meaning $10 million, if you'd make that discussion and want to argue with yourselves. Two points, $20 million will win this deal for the City of Philadelphia. Mayor Street in his absence, I wanted to let him know that I am aware that he has many adversaries, that he has endured dirt, darkness and despair, but, see, this two-point $20 million conversion will sew a $20 million love seed for our kids, for City Council and for this Mayor's legacy. Love covers a multitude. A $20 million seed will sew over 100 fold. Think about this for a minute: This is a futuristic anti-crime check. For our kids, for City Council, check mate. They say this City Council couldn't get with 130 12/11/06 - EDUCATION - RES. 060806, ETC. this Mayor and build stadiums. That's history. They say this City Council couldn't get with this Mayor and finish the Convention Center and the Kimmel Center. That's history. But for the foundation of the world, destiny is calling again for you fine ladies and gentlemen to step up to the plate and put a $20 million check, check mate. History is the ultimate judge. It begins with class size and it ends with class size. Let history judge. Thank you. (Applause.)
Let me say to this Committee we were happy to bring some forward. We have no idea how many of you are there. We will hear those at the table and then we'll bring on Mr. Vallas. Thank you very much. Mr. LaVan. MR. LaVAN: Thank you. Good afternoon, Madam President, Madam Chairwoman, distinguished members of 131 12/11/06 - EDUCATION - RES. 060806, ETC. Council. Thank you for affording the parents around us this opportunity. Along with the parents, students, community members surrounding me at this moment, we have been screaming, testifying, talking, trying to get attention, not for the last week or two but for the last year and really since the spring. What comes to mind to me -- and I have the privilege and honor of knowing some of you on a very personal level, but what comes to mind to me as I speak to this body is that Rome is burning and our Legislature is playing the fiddle as Nero did. You don't realize what is happening, and we are here to bring this to your attention. I am also here to offer you something that is easy, simple and can and must be done without delay, and that is class size reduction, the linchpin to any and all reform. (Applause.) MR. LaVAN: I don't believe 132 12/11/06 - EDUCATION - RES. 060806, ETC. that this body is aware that from 2002 through this spring we had class size reduction. The School District of Philadelphia was improving. Our test scores, our numbers show it. Were we to our goals? Of course not. But were we moving in the right direction under CEO Vallas? Yes, we were. Were we moving under the right direction under Chief Academic Officer Thornton? Yes, we were. Something has now gone terribly wrong, and the buck starts here, for what happened in the spring was the elimination of the class size reduction initiative. For the first three years of the Vallas administration, class size mandatory roll-back to to children, 19 we saw improvement. Very quietly, 20 apparently without telling Council -- and 21 you'll have to ask CEO Vallas why that 22 was the case, but without telling 23 Council, the class size reduction program 24 was eliminated systemwide. The only cap 25 on class size at this point is the 133 12/11/06 - EDUCATION - RES. 060806, ETC. contractual cap of the PFT of 33 children in a classroom. I'm the President of the Home and School Association at Shawmont. I'm a product of this system. Thirty-three children in my son's class is too many children. I challenge any one of you to tell me that I am wrong. If I am wrong, I will stand up and leave right now. Thirty-three is too many. And we as parents and community leaders, we knew in April this was just the tip of the iceberg. We went before the SRC. We went to the media. We came to this body. Nobody paid attention. Rome was starting to burn. Now there's a full-fledged fire. People have been laid off. Classes are being leveled. Split grades run rampid throughout the City. We need money. We need your help. Thirty-three is too many. You trusted Paul Vallas. You trusted Dr. Thornton six months, a year ago. I have had my clashes with Paul 134 12/11/06 - EDUCATION - RES. 060806, ETC. Vallas. Some of them are legendary at this point, but I have learned one thing in this process, Mr. Vallas, Dr. Thornton and I am sure each and every one of you share with us the goal of the best possible school system for our children. I don't doubt that any one of you want that. Well, if I am right, if we are right, take a look at one issue first, what has happened to class size. It has exploded back to the contractual limit of 33, and it's too many. Take action immediately. Get the School District the funds to reinstate beginning immediately a real class size reduction program so we can again have school reform, for if you don't, we will all be looking at school failure. Thank you. (Applause.)
Madam President Verna, Councilman Blackwell, I was asked very graciously to thank you 135 12/11/06 - EDUCATION - RES. 060806, ETC. and also just to ask you for two more minutes. There's two parents that want one minute each. If you will grant that, we'd really appreciate that. Thank you for your patience.
Please, have a seat and let us -- it's quicker to proceed. Identify yourself and then --
Good afternoon, Council President, Committee Chair Blackwell and members of City Council. Thank you very much for this opportunity for public hearings. My name is Patricia Toy. I am the parent of a 7th grade student at the Albert M. Greenfield School and I am Co-President of our Home and School Association. Greenfield was the victim of the budget cuts that the School District 136 12/11/06 - EDUCATION - RES. 060806, ETC. suffered this year. We lost one of our 4th grade teachers in mid October to leveling, forcing us to go from three classes to two large 4th grades. One of our 4th grade classes had been a small group of students who are performing 8 well below grade level. It was our 9 principal's thought that if he could give 10 these students more individual attention 11 in a small class setting, they would have 12 a better chance to improve and hopefully 13 reach grade-level performance before 14 entering 5th grade. Now these 16 15 students, along with the others, are in 16 two large classes, with no opportunity to get the additional attention and help they need and deserve. Class size does matter. Research studies prove it. And ask any classroom teacher and they will tell you that class size is one factor that can have the greatest impact on student performance. Fewer students in a class means more individual attention from the 137 12/11/06 - EDUCATION - RES. 060806, ETC. teacher. It means a calmer classroom environment, and it has been proven that in a smaller class setting, students experience continued pressure to participate in learning activities and they become better, more involved students. We cannot abandon the class size reduction initiative. We cannot renege on our plan for true reform of our public schools. We cannot settle for mediocre or inferior education for Philadelphia public school students and consider it good enough. Our students and our schools have come a long way in the last four years, and I commend Paul Vallas and the SRC for their vision and for setting the bar high. But we still have a long way to go. Let's not abandon our goals for high achievement. Let's not abandon the plan for class size reduction. I believe in public school education and that every child has a 138 12/11/06 - EDUCATION - RES. 060806, ETC. right to a good, quality public school to attend, and I know I am not alone in believing that inner city children deserve good, quality public schools just as suburban students do. (Applause.)
Or students in any other part of our country. Let's not treat Philadelphia public school children as second-class citizens. Let's give them their fair share of the pie. Let's make education in our public schools a top priority. The City, the State and the School District of Philadelphia must work together for the good of our public school students. They need to partner together to see that our schools get the funds they need to provide a quality education. Our students have proven they can achieve. They have the test scores to back this. Let's remove the obstacles and give them the tools they need to succeed further. Class size reduction is 139 12/11/06 - EDUCATION - RES. 060806, ETC. a key factor. We have a long way to go, but look how far we've come. Let's keep the bar high, and our students will prove they can reach it. Thank you. (Applause.)
Thank you very much. Please identify yourself for the record in either order and begin your testimony. Thank you.
Good afternoon. My name is Delores Shaw and I'm Vice-Chair of the Eastern Pennsylvania Organizing Project, EPOP. EPOP is a member of the Out-of-School Youth Collaborative, which has spent the last two years looking at the issue of out-of-school youth and our dropout rate around the City, but, more importantly, I am here too as a mother. I'm a mother of a sophomore student at Mastbaum Vo-Tech High School and a 17-year-old son who now sits at home because this year he will be part of the 140 12/11/06 - EDUCATION - RES. 060806, ETC. 2005 dropout data. At first, I was concerned about combining the three issues of education at this particular meeting, but it occurred to me while I was sitting back there a minute ago that all these issues are interconnected. The issue of equity and equitable funding for all our Philadelphia public schools had driven the School District into the ground. Poorly maintained and dilapidated schools serve students who have no clear educational goals, who have no 15 educational drive, and in the end, after they go to school long enough, they begin to disengage, then they become truant. And a truant student to the City of Philadelphia is a student who is invisible. They do not exist. As a second thought, I want the Council to understand that every student in the City that drops out is not a juvenile delinquent, is not a criminal, nor are they some kind of thug that runs 141 12/11/06 - EDUCATION - RES. 060806, ETC. the street looking to kill someone. Most of the young people that drop out of our school drop out because they become disengaged, disenfranchised and just lost. We need to do all we can. (Applause.)
And I implore every Councilmember sitting there that this is a problem that expands long outside our homes. I sit here as a parent, and a few weeks ago I had to admonish a parent for saying that we were all being bad parents, we weren't doing everything we can. That's a lie. The number of parents that actually aren't keeping their commitment to send their children to school and do what everything we can to endorse them getting a good education is very small. Every parent and young people sitting here today that have taken their time to come here is concerned about their education or the education of their children. (Applause.) 142 12/11/06 - EDUCATION - RES. 060806, ETC.
I ask Council and our State Reps not to become involved in a spurring match over who is going to fund our schools, while our young people and our children fall victim to a fight that no one will win. (Applause.)
And as a sidebar issue -- and this is somewhat personal -- I'm going to ask City Council to look at the role of CEP, Community Education Partners, and the role that they play on our schools. From September to February, my son attended CEP. He was a victim of violence while he was there. He was a victim of violence before he came. My concern is for the educational capacity, for the educational resource and for the education, this for-profit company provides most of the students they're supposed to teach. The population of students they teach are highly African-American and Latino, and I can assure you my son always said that 143 12/11/06 - EDUCATION - RES. 060806, ETC. the only requirement that a teacher has to teach at CEP is that for the men, that they be at least six foot tall and over 250 pounds, and for the women, some of them are just the same. I shall tell you that this is nothing more than an excuse for a jail. There is no education going on there and there's a contract where someone is making big money and they're making it on the backs of our children. (Applause.)
I thank you very much for your time and for listening to me today. (Applause.)
I'm Justine Gudenas and I'm also a parent from Greenfield School. And as Pat Toy said, Greenfield School at one time was a star school of the system, and it is 144 12/11/06 - EDUCATION - RES. 060806, ETC. suffering. The art program was cut back, music was cut out, Spanish as a second language has been cut out, and this is happening to what was supposed to be the best school in the system. I'm also urging City Council to very closely look at the School District budget. There really is no objective oversight of the budget. The two entities that are overseeing the budget are the City Controller's office and also a private company hired by the School District, and yet ten employees of the City Controller's office are actually paid by the School District budget. In fact, Vallas in his proposed budget asked that the salaries of ten employees from the City Controller's office, who are doing no work whatsoever for the School District, that their salaries be taken off the budget. That was not done by the School Reform Commission, which was supposed to be overlooking this budget, and there's no explanation given as to 145 12/11/06 - EDUCATION - RES. 060806, ETC. why that is so. And, of course, the salaries of these ten employees, who are not really doing anything for the School District, that money is being taken away from the children. So I'm just simply giving one more example of why it's so very, very important for City Council to closely examine this budget. Thank you. (Applause.)
Thank you very much. We thank you, parents alike. And certainly all who are here will certainly get a chance to testify, those who haven't, further along in our hearing, and we thank you. We will now ask Mr. Paul Vallas, CEO, School District of Philadelphia, Sandra Dungee Glenn, School Reform Commission, to come forward. Thank you all. I thank everyone here for your patience. I promise everyone who would like to 146 12/11/06 - EDUCATION - RES. 060806, ETC. testify will, and I apologize for the lateness of the hour and for delaying everyone from busy, busy schedules. Thank you, students, as well. We would like to acknowledge the presence of students from the Parkway West High School who are in the balcony. Thank you for being here. (Applause.)
We thank you very, very much. I'd like to thank members of the Committees on Education and Finance for their patience, and we certainly would like to thank Councilman Kenney for being here as well. Good afternoon. Thank you and thank you for your willingness to certainly defer to parents and students who have been here. Thank you both.
Thank you, Madam Chair, and good afternoon. I'm going to lead off with our testimony today and then be followed by our CEO, 147 12/11/06 - EDUCATION - RES. 060806, ETC. Mr. Paul Vallas. First of all, let me say good afternoon to you, Madam Chair, Madam President and to members of the City Council Finance and Education Committee. And even in his absence, I want to acknowledge the Mayor and thank him, as always, for his strong support of public education and all that he has done. I have the privilege and honor of having been appointed three times by the Mayor to our educational bodies, first to our Board of Education and then in 2002 to the School Reform Commission and then was reappointed in 2005 to our School Reform Commission for a second term. So that is very much an honor and a privilege. I am Sandra Dungee Glenn, one of the five Commissioners on the Philadelphia School Reform Commission, and you need to know that I am joined here in Council Chambers today by my colleague, Mr. Dan Whelan, and I'd just 148 12/11/06 - EDUCATION - RES. 060806, ETC. like for him to be acknowledged in terms of his presence here today.
We certainly welcome him to come forward. Mr. Whelan, you're certainly invited.
It's always good to know, Madam Chair, that he does have our back, though. So he is right back there. I want to say on behalf of Chairman Jim Nevels that he sends his apologies and is sorry he is not able to join you today and thank you for inviting SRC to speak with you. When the SRC first came before this distinguished body five years ago, we were embarking on a monumental journey to turn around a school system that no 21 one believed in and to prove to the City, the State, our children and all of our stakeholders that our children can learn and they would learn. Today, the School District of 149 12/11/06 - EDUCATION - RES. 060806, ETC. Philadelphia's system of reforms is providing a national model for urban districts across the country. We are improving academic achievement and financial responsibility. In the first year of our reform efforts, the School District standardized and implemented an entire new curriculum. We mandated summer school and extended-day programs for the first time in Philadelphia's history. We negotiated a child-friendly contract with the Philadelphia Federation of Teachers that put children ahead of politics. We openly and honestly reported incidents of student violence, in spite of the political ramifications of those numbers if those numbers were to rise, and launched a zero tolerance policy to school violence that would extend beyond the schoolhouse doors and beyond school hours. We expanded school choice by creating privately managed schools, EMOs, 150 12/11/06 - EDUCATION - RES. 060806, ETC. alternative schools and increasing the number and diversity of charter school options. And just as a note, in 2002, the EMOs were given five-year contracts and those contracts will be up for review this June 2007. The School Reform Commission will evaluate if and how EMOs will continue in Philadelphia. I also should note that currently we have 54 charter schools and that they are educating approximately 30,000 Philadelphia school children. We are due to open another six to seven in September of 2007. It should also be noted that 17 of our 54 charter schools made AYP last 18 spring 2006, and I think that's very 19 important for us to note. 20 We set quantifiable goals and 21 deadlines, advanced in The Declaration of 22 Education. The Declaration drives public 23 education reform in our School District. 24 It sets an exceedingly high standard for 25 early literacy, academic achievement, 151 12/11/06 - EDUCATION - RES. 060806, ETC. school climate and safety, community involvement and administrative operations, all to be achieved by the year 2008. In 2006, our students achieved a record fourth consecutive year of growth in math and reading scores for all District students whose scores are used to measure Adequate Yearly Progress, AYP, under No Child Left Behind. 1 percentage points since 2002. Scores in virtually every demographic category are up. Scores at our 37 small high schools, those high schools with 500 or less students, outpace scores at larger high schools with more students scoring advanced or proficient in math and reading. For this, we are extremely proud. Five years ago, one of the immediate goals set by the School Reform Commission was to make ourselves 152 12/11/06 - EDUCATION - RES. 060806, ETC. accountable for every decision, accountable to employees, to students and to the citizens of Philadelphia. Radically changing the public's view of public education is a formidable task under the best of circumstances. But slowly, we believe we are rebuilding support for public education in Philadelphia and building confidence in our public School District. Ninety-four percent of the District's teachers are now fully certified, and the District's Academy for Leadership is training a new corp of skilled and motivated school principals. Some have called our progress in turning the District around unprecedented, but we call it mandatory.
As you have heard widely reported, the District has come upon a budget deficit this fall, the origins of which CEO Paul Vallas will explain in greater detail. The SRC is working with management to adjust our FY07 budget to 153 12/11/06 - EDUCATION - RES. 060806, ETC. close this deficit and return the District to sound financial footing for Fiscal Year '08 and beyond. We have been taking deliberate steps to manage this deficit, and we have made every effort to make this process as transparent as possible so that all of our stakeholders understand how we are working to resolve this problem. We have held hours of public hearings about 12 the budget. 13 And I appreciate that, 14 Councilwoman Blackwell, you have attended 15 some of those hearings. And we want to assure you that parents' and citizens' comments and testimonies are having an impact on us. We take our fiduciary responsibility to the children of Philadelphia very seriously. The SRC has acted with urgency to avert damage related to the deficit. However, we will not undermine successful reform. We will continue to develop and implement 154 12/11/06 - EDUCATION - RES. 060806, ETC. policies that improve our fiscal and organizational oversight of the District in the Mayor's call to the SRC, and we agree with him on the urgency of our finalizing our five-year plan. In November, the School Reform Commission created the Financial Accountability Unit, FAU, to improve the process of reviewing and reporting on programs and budget. Many partnerships have formed over the last five years, and these partnerships have been at the heart of the reform process, and it is crucial to continue community involvement in our schools if we want our children to succeed. Most important are our partnerships with the City of Philadelphia and the Commonwealth of Pennsylvania. We will not reach our goals without your confidence, support and continued investments in our educational reforms. Our work is well begun, but 155 12/11/06 - EDUCATION - RES. 060806, ETC. much more remains to be done. We have seen four years of unprecedented growth in standardized test scores. 5 percent of our students scored proficient in math on the PSSA. 8 percent scored proficient. That is impressive progress, but the flip side is that just under 60 percent of our students have not reached grade-level proficiency in math. Much work remains to be done. Our reforms are helping all students across the demographic spectrum. The math and reading scores of African-American, white, Latino and Asian students have all risen. But the achievement gap for black and Latino students, their performance as measured against their white peers, remains virtually unchanged. Work well begun, but much more remains to be done. The District is aggressively tackling the dual and related problems of truancy and high school dropouts. A 156 12/11/06 - EDUCATION - RES. 060806, ETC. number of research-based initiatives have been implemented: school realignment to a K-to-8, 9-to-12 system, middle grade supports, smaller high schools, 9th grade academies, upgrades to career and technical programs, CORE Philly Scholarships, athletics and other extracurricular activities. All are solid initiatives intended to decrease truancy and dropout rates by making school more relevant, engaging and connected to students. But we must still find programs that address recovery as well as prevention. CEO Vallas will talk about both our dropout recovery and truancy programs in detail. Again, our work is well begun, but much remains to be done. The SRC wishes to thank Mayor Street and City Council for the City's valuable $3 million contribution proposal to the anti-truancy effort. With the contribution, the School District will expand the number of parent truant 157 12/11/06 - EDUCATION - RES. 060806, ETC. officers.
By working together to resolve the truancy problem and addressing why all of our children don't attend school, we can reach them before they officially drop out of the system altogether. We know we can't do it alone. We need your help. Just as we have successfully worked together to get to this stage in the reform process and as the effort to fight truancy has shown, the children of Philadelphia are the beneficiaries of our partnership. We believe the best of what public education has to offer in Philadelphia is still to come and our brightest days are still ahead. We owe it to the 184,000 children we serve to attack our work with urgency and fidelity so that they can benefit from the best and brightest we have to offer. The School Reform Commission is made up of five independent individuals, but three things unite us. Number one, no excuses; number two, children come 158 12/11/06 - EDUCATION - RES. 060806, ETC. first; and, number three, success is our only option. I thank you for the opportunity to address you today. )
Thank you very much, Ms. Dungee Glenn. We appreciate your testimony and its positive tone. We welcome Mr. Vallas. We realize we all are in this together and that it is our responsibility to try to come up with positive solutions to the problems that plague us. And thank you for your patience, for being here today, even calling this morning to talk about a press conference you had today and then waiting to allow at least the majority of the parents to try to get their testimony in today. Thank you. And thank you, Ms. Dungee Glenn and members of the SRC.
Well, thank you so much, Madam Chairman. Before I get 159 12/11/06 - EDUCATION - RES. 060806, ETC. started, I just wanted to -- I always get frustrated when there is some misinformation that goes out, and I just want to correct certain statements that were made here earlier. The School Reform Commission approves every contract over $25,000 and, every contract under $25,000 is approved by a review committee, which, incidentally, reports all those contracts to the School Reform Commission. So I didn't want anybody to think -- if the School Reform Commission wasn't approving those contracts, I don't think we'd be spending all those hours twice a month deliberating all those contracts. So the School Reform Commission does approve all those accounts. I'd love to have unilateral authority to pass those contracts, but, unfortunately -- or I should say fortunately for the public, I don't. So I just wanted to point that out. A second point I wanted to 160 12/11/06 - EDUCATION - RES. 060806, ETC. make, too, was, there was a claim made that the School District has overspent in its Risk Management administrative account. Let me point out that we bill 6 to that account all the Risk Management settlements. As you know, about four years ago we embarked upon a campaign to, in effect, get the heavy workmen's comp caseload off our books. We were paying, I don't know, upwards -- I don't know the exact number, upwards to $10 million a year. So we issued a Risk Management bond, and we've used the proceeds of those bonds to pay for the settlements. And the settlements, I don't know -- the year in question, I think the settlements were $8, $9 million. So we record that on the Risk Management line. So it may look like there's 50,000 in administration, but there's an $8, $9 million payout, but that's the settlement payout that's paid to get the workmen's comp people off our payroll. If someone had asked, we would 161 12/11/06 - EDUCATION - RES. 060806, ETC. have given them the explanation. So to assume here that, my God, we have a $50,000 line and we're spending $9 million, it's very, very, very misleading. That's our Risk Management payout line. We've always billed to that line. Let me point out that the workmen's comp reforms to date have saved us about $20 million, and it's going to save us money every year, because we have individuals -- we had some individuals who have been on workmen's comp since 1962, 1963, just to give you a sense. So the City has gone through similar reforms. You're very familiar with them. And, of course, we've gone through those same reforms. So I just wanted to make that point. A final point I wanted to make, too, is, every single major project in our school construction program, with the exception of the West Philadelphia High School and possibly Dobbins because the 162 12/11/06 - EDUCATION - RES. 060806, ETC. public meetings are still going on in Dobbins, either those projects will have been started or the contracts will have been let really before the end of the school year. So the bottom line here is, we're delivering on everything we promised. I do want to point out, though, that like every municipality, we have to follow rules. We have to acquire land. We have to have public hearings. We've had something like close to 700 public hearings. How many public hearings have we had on West Philadelphia High School? Each one of you know, though, the degree to which we've had public hearings on these projects. The Kensington High School, for example. So we've had exhaustive public hearings. And we have to go through the regulatory commissions like everybody else. And that, with some great degree of justification, can be a prolonged process. You have to go through zoning, 163 12/11/06 - EDUCATION - RES. 060806, ETC. you have to go through the regulatory departments, you have to go through the Arts Council.
So, likewise, if you plan a school and you finally break ground a year or two years later, the cost of that school is going to be a little higher than it would have been if you started it two years earlier. The bottom line, though, is, the process is what it is and we experience the cost increases, you experience the cost increases, the private sector experienced the cost increases, but that's the nature of the system. And I'm not criticizing that system. I'm just pointing out that it's a little misleading to say, oh, my God, they're spending more on their schools. I do want to point out, though, that the average change order on our school construction programs is four and a half percent. That is unprecedented. That is extraordinarily low for the public sector. That's even low for the 164 12/11/06 - EDUCATION - RES. 060806, ETC. private sector. So when we build things, whether it's the Microsoft High School or it's the Audenreid School or it's the Gratz addition or it's the Deburgos School, that work comes within cost. So I just want to point that out, because I don't want to create the impression that we haven't delivered on the capital plan. Let me point out, the capital plan addresses one-third of our need. So we should be talking about how we're going to do Phase II of the capital plan rather than questioning the quality of Phase I. And as you know, I've provided, as I do every year, summary books identifying every single project and initiative in every single district, and we make that information available, from school construction to after-school programs to summer school programs to new schools, and we'd be more than happy to make that information available again. 165 12/11/06 - EDUCATION - RES. 060806, ETC. So I just wanted to make those three points of correction. I didn't want people to think that I can just award contracts without rigorous supervision or, for that matter, somehow we overspent in line by $8 million. Again, if we're asked, we'll give the explanation. But a lot of times we're not asked. The statement is made and then that's it. First of all, I likewise would like to thank this body for their long-time support for the School District on so many levels and the members individually, because I think we've had a lot of success in our school reform issues because we have been responsive to the local leadership. Having come from Chicago, Mayor Daley always used to say, All politics is local. In Philadelphia, all politics is local, but the individuals with the ear closest to the rail, so to speak, are those individuals who can guide us more effectively. The 166 12/11/06 - EDUCATION - RES. 060806, ETC. Council men and women here know the neighborhoods. We have never been steered wrong when we ask their advice and their input in the process. I duly admit that I probably make more promises than I deliver on, but as somebody said, Vallas keeps half of his promises, but then they said in the same breath, But some of his predecessors didn't make any promises. )
You can make that decision yourself. At least we try to keep as many promises as we can. But it's our desire to do a lot. We have a District that's financially -- that has struggled. The School Reform Commission inherited a District with huge -- $100 million of the deficit financing bond the year the School Reform took office and the year that they got the deficit financing proceeds had to be spent just to pay the previous year's bills. By the 167 12/11/06 - EDUCATION - RES. 060806, ETC. second year of the School Reform Commission's existence, the deficit financing bond proceeds were about $140 million, and we all remember those days, or at least you remember those days, because I kind of parachuted in here about the seventh or eighth month of the School Reform Commission's existence. But there has been a desire to do a lot. I was criticized early on. A lot of people said, Don't pretend like you can do it all, or You got to ask for more. But our approach has been to try to work behind the scenes to secure more funding, while at the same time doing the best we could not to make excuses and to do as well as we could with the resources we had. And now we may have come to the end of our rope from a financial standpoint, but I think that effort has produced results. And I'm going to summarize those results in a few minutes after I've summarized why we kind of got into this budget fix. Because I do want 168 12/11/06 - EDUCATION - RES. 060806, ETC. to point out that in 2002, the School Reform Commission did lay out some ambitious but yet totally appropriate goals, goals that if achieved would define us as a superior district, and at the same time, the management team laid out a document called Vision 2008, which articulated the things that we were going to do to help put the School District in a position of achieving those goals. And if you look at my testimony, every single year, at least the last three years' testimonies, you've seen not only the goals discussed, but you've seen the vision articulated and you've seen me give status reports on that vision. And I'm going to talk about that shortly. I do want to say this, though: When I testified before City Council last year, I testified and I said that the current year, that the '06-'07 year, budget was balanced, and we felt that that budget would be structurally balanced. The challenge that we faced 169 12/11/06 - EDUCATION - RES. 060806, ETC. wasn't in the '06-'07 budget. It was in the '05-'06 budget. In effect, we ran a much larger deficit than we realized and we had forecasted. If you remember, last year around this time in January, the School District initiated -- we actually in December made a number of proposed cuts or we proposed a number of cuts in our mid-year budget, because we felt expenditures were exceeding revenues and we felt that we were going to be running a deficit and that deficit could be a sizable deficit. And we deliberated over those cuts, quite appropriately, for the better part of two months before initiating those cuts. We put a freeze on hiring. We eliminated some minor contracts. We encumbered some unspent discretionary spending, or at least we thought we had encumbered those dollars. So when I say that when we talk about the deficit, we were concerned as of December and January that we were 170 12/11/06 - EDUCATION - RES. 060806, ETC. actually going to be running a deficit, and we attempted to initiate certain actions to kind of head off that deficit. As late as August, we were projecting what we then thought would be a smaller deficit of about, I don't know, $22, $24 million and we thought a manageable deficit, until we were surprised as we began to close our books with the $73 million deficit.
So, again, the problem when we testified in '06-'07 on the '06-'07 budget, we felt we had a structurally balanced budget and we felt that we would finish the year with at least a very small -- the previous year at least with a very small deficit and hopefully a small draw-down on the remaining deficit financing bond proceeds. That said and done, we did finish the year with a $73 million deficit. Now, while that constitutes a little over three percent of the School District's budget, I'm not saying that 171 12/11/06 - EDUCATION - RES. 060806, ETC. that is an insignificant amount, but I've always felt that at this present time, it was a manageable amount. But obviously for a school district that is always financially challenged, even a manageable amount can have impact on programs. But let me summarize the highlights of why that deficit occurred. The first reason for the deficit was a receipt of about $13 million in revenues that we were projecting in '05-'06 that actually were to be received in '06-'07. There was the Plan Con, the State school construction bond reimbursements that came later than anticipated. We had to roll it over into this year as opposed to last year. There were proceeds from the sale of two pieces of property that we had budgeted for last year and we did not receive those proceeds. In fact, we're just settling on the sales now. One of the sales for the Durham building were challenged in court, so that delayed us closing that 172 12/11/06 - EDUCATION - RES. 060806, ETC. deal. So there's about $13 million in income that we did not receive in '05-'06 that rolled over into '06-'07. Obviously that was part of the $73 million deficit. The second thing was, we significantly underestimated payouts for individuals who retire or who are separated from the District. Our term pay was based on historic trends. We had always projected about $20 million. The previous year we had million in term 14 pay. That's kind of been the historic 15 level of term pay. The only time we've 16 had higher term pay is when we did our 17 early retirements. 18 We ended up getting hit with a 19 liability of almost $30 million, and it 20 was due to the fact that we had about a one-third higher rate of separations than we had anticipated, "separations" meaning retirements, individuals leaving the system, part-time individuals leaving the system. It was much higher than we had 173 12/11/06 - EDUCATION - RES. 060806, ETC. projected, and as a result, we had a payout. When people leave, they're entitled to a portion of their sick days and vacation days, et cetera. So the term pay was almost $10 million higher. Now, that could have been done to a number of reasons. As you know, the No Child Left Behind mandate on highly qualified, you can't work in the school unless you're highly qualified, whether you're a teacher or support staff. That impacted in June of last year. Thus, there were a lot people who separated from the District because they did not reach that high qualified status. So there are a lot of reasons for that, but, again, it was a reasonable underestimation given historical trends. And had I micromanaged the budget process myself, I would have never projected 30 million. I would have projected 20 million. The next big difference or the big surprise was in salvage. 174 12/11/06 - EDUCATION - RES. 060806, ETC. Historically this District has always salvaged. These are unspent appropriations anywhere from $25 million to $30, $35 million. And we this past year salvaged $6 million, which is a historical low, which is unusually low. And there's no way we could have calculated or estimated a salvage of this low. But hindsight being 20/20, we probably shouldn't have been surprised, because when we did the mid-year cuts, when we cut at mid year, as you know, we proposed a whole series of cuts in December that included us encumbering unspent discretionary funds at the local school level, et cetera.
We estimated we were going to target certain monies that we were going to try to secure and not spend, but we deliberated over the budget cuts for the better part of two months. So by the time schools went out and started encumbering, when we asked schools to save 30 percent of their unspent discretionary spending in 175 12/11/06 - EDUCATION - RES. 060806, ETC. February, it was a heck of a lot less than it was when we proposed it in December. So the combination both -- and the same thing with department heads. People moved money around and encumbered funds. So we had a historic low salvage, because we base cut at mid year. So those items alone that I talked about, the lower than anticipated salvage, the higher than anticipated term pay, the additional revenues or the late receipt of the revenues, we also did not attrit. We did not realize the savings from attrition that we had anticipated, central office attrition. As you know, we added 119 additional teachers in this current year's budget, and we assumed that our attrition from last year and this year would, in effect, cover those additional hires. That was probably way too optimistic an assumption. We probably should have proposed specific cuts then, central office cuts then, to 176 12/11/06 - EDUCATION - RES. 060806, ETC. finance the additional teachers. But we came up with about six and a half million dollars short on that. So we got hit with all those factors and then some others that really contributed to the $73 million deficit. So, again, on the flipside, though, we could salvage million this year 10 instead of 6 million, or we could have a 11 historic low number of separations, in 12 which case we would have a pleasant 13 surprise as opposed to an unpleasant 14 surprise. But the point here is, while 15 you can understand and perhaps 16 rationalize the miscalculations 17 individually, collectively they become a 18 little more difficult to explain and plus 19 the impact, kind like a financial perfect 20 storm, so to speak. 21 But, again, when you're 22 pressing the envelope to do a lot, you 23 will always run the risk of overspending 24 your resources. I mean, if we see something that works, we try to do it, 177 12/11/06 - EDUCATION - RES. 060806, ETC. whether it's a dropout prevention program, whether it's hiring parents to serve as truant officers, whether it's partnering with 47 community-based organizations to help us with community policing. We certainly have pushed the envelope. And when you do that, you're going to run the risk that you're going to run deficits. The question isn't are you going to run a deficit, but the question is can you manage that deficit, and in going in and cutting, can you impose the type of cuts that are going to have the minimal impact on School District programs. And the deliberations that we've had, really since late October at the direction of the School Reform Commission, the public hearings, bringing in independent entities like PFM and others to give us a second opinion, have all been driven by a desire to balance our budget but, at the same time, to do so in a way that would have a minimum impact on the schools and on our critical 178 12/11/06 - EDUCATION - RES. 060806, ETC. programs. And I think what the School Reform Commission has given me the green light to do does that. We do make $73 million in adjustments. Most of those adjustments are full-time adjustments or permanent adjustments to the base. A part of the adjustments are one-time adjustments. We did a bond refinancing that's going to generate about $13 or $14 million. There are some other one-time things that we're going to do. But the objective here has been to do the things that won't really adversely impact classroom instruction. We don't want to do what we did last year, which was go in and try to trim discretionary spending or not fill critical teacher vacancies.
Let me point out that while the leveling we've done has created some controversy, quite appropriately because we haven't leveled downward in four years, we've actually to date hired about 80 or 90 additional teachers to fill 179 12/11/06 - EDUCATION - RES. 060806, ETC. vacancies in schools that were overcrowded. So we continue to staff at the local level to obviously address our critical staffing needs. But if you look at the cuts that we've made -- and in your red book on the right-hand side, there's a list of the specific budget adjustment categories -- you'll be hard-pressed to find something that is having a direct impact in schools. If I can summarize, we've targeted contracts, we've targeted non-educational operations, we've targeted vendors, we've targeted private providers, we've targeted all our alternative school providers. There was an increase at the state level to expand our alternative school services. That increase is going to be slower than anticipated, thus saving us money. We're doing another round of healthcare re-enrollments. So I think we've done a number 180 12/11/06 - EDUCATION - RES. 060806, ETC. of things, all designed to save us money, but also designed not to adversely impact in the classroom. If you go through that list and if you have any questions along the way on that list, please let me know. Let me point out that probably the biggest cut and probably the most painful cut was the central office cut. Now, I freely admit, I've tried to avoid laying off people over the last four years. I don't think I've ever laid off a teacher. Certainly schools will lose teachers if they lose population, but we haven't been laying off teachers. And we tried to downsize the central office through attrition. And when you look at the first year, 2001, RIF and then look at the attrition since 2001, the central office prior to this cut has been reduced by about 25, percent, and we did it 22 for a lot reasons, to help us balance the 23 budget and also to help us shift money 24 into the classrooms. 25 But this was the first RIF, so 181 12/11/06 - EDUCATION - RES. 060806, ETC. to speak, or reduction in force, that I've had to do on my watch here, because attrition just wasn't getting us what we had anticipated. We did eliminate 175 positions. The criteria that we wanted to use was, we wanted to eliminate positions who the work of which could be picked up by someone else. So we didn't want to eliminate the function as much as simply reduce the number of personnel managing the function, so to speak. So there were some critical positions eliminated. But my individual department heads can come up if you have a specific question about any particular layoff, and they can talk about who now has responsibility for performing that function. In eliminating 175 positions, we'll save about 6 million this year and annually 16 million in the out years, because obviously you have payouts, term pay when you eliminate positions, and the positions are being eliminated at mid 182 12/11/06 - EDUCATION - RES. 060806, ETC. year, so you're not going to realize the savings. So we have to say -- and term/payout is somewhere, I don't know, between $3 to $4 million, so obviously that's going to cut into our costs. But because we had 47 vacancies and because 53 individuals who are teacher and counselor certified are going to be able to bounce into vacancies at the local school level, we, in effect, are only going to be laying off 81 people. Now, 81 people is still 81 people, and that is painful obviously for the person who is being laid off. So what we've done is, we've created a job bank that is up, website, et cetera, and it is staffed by representatives from the Human Resources Committee, and what we have been doing really in the last month is, we've been reaching out to all of our private school providers, our charter school providers, our private vendors, our alternative school providers, our 183 12/11/06 - EDUCATION - RES. 060806, ETC.
contractors, asking them to identify vacancies that exist and then working to match individuals' credentials with those vacancies. And if you go to the website, you will see dozens and dozens of jobs, and that website is only expanding. So what we do -- and we're going to keep the website up maybe even permanently, but we're going to continue to have the team in Human Resources working to get people placed. So we're obviously going to try to minimize the impact. Now, the cuts that we're making this year, the analyzed savings we're hoping will come to about $80 to $90 million a year. And if that is the savings we realize next year once we've analyzed the savings and the Governor provides the same level of funding increases that he's provided in past years, then we'll be close to balancing the budget next year. But that does not get us beyond next year, because while a 184 12/11/06 - EDUCATION - RES. 060806, ETC. lot of what we're doing this year with these cuts is, in effect, not only making these cuts early so we can finance last year's obligations but also cutting the base so we can, in effect, balance next year's budget, the Mayor is quite right the District needs to finalize its five-year plan, because we need to look at the five-year obligations of the School District as we debate this issue as to what the School District needs to continue to move reform forward. We're not done with our five-year plan and we won't be probably until late January, because you can't complete a five-year plan when you haven't made any final decisions on balancing the current year budget. But as you know, in January we begin our budget deliberations in-house. In January, we begin to get a sense of what Harrisburg is going to provide us. In January, we'll have a clear idea of what's going to be available at the 185 12/11/06 - EDUCATION - RES. 060806, ETC. federal level in Title I. So we will be completing our five-year financial plan shortly, and when we come before City Council with next year's budget proposal, we will not only obviously be presenting next year's budget but we'll also be presenting our five-year plan. Obviously we hope to get the Mayor's office and the interested parties our five-year plan sooner, but we've got to complete the work on this year's budget before we finalize the five-year plan. And while I'm confident with the cuts that we're doing this year that it's going to put us in a good situation to maintain the status quo; in other words, to maintain the existing reforms that we put in place, the out years are a concern and there is a concern about what we're going to need to secure in order to take school reform to the next level. So I just want to point that out. But there's certainly no 25 intent not to provide information. It's 186 12/11/06 - EDUCATION - RES. 060806, ETC. just we don't have the five-year plan completed yet. I do just want to summarize a number of things, and then I want to talk about -- and in passing, I want to make reference -- and, Madam Chairwoman, with your permission, I'll certainly make my comments on the Youth Collaborative and the truancy initiative, too, so we can cover that. I just want to give you a perspective on what the District has been able to accomplish over the last few years, and this has always been articulated in the Vision 2008. We now have 3,000 more kids in early childhood programs than we ever had before. All of the early childhood programs have been standardized under the auspices of Dr. Martinez and the United Way, early literacy, standardized curriculum, instructional models. We're not where we should be. There are still thousands of additional 187 12/11/06 - EDUCATION - RES. 060806, ETC. children we need to put into early childhood programs, but without a significant increase in funding, we've been able to serve more children in quality programs.
And let me point out that this does not include the 500 pregnant teens that are in our ELECT Program or our Cradle to the Classroom Program or the families that we're reaching through the HOME Program. As Sandra has pointed out, over the last three years, we've standardized the curriculum. We've established a managed instructional program and we have literally replaced every textbook in this system, pre-K all the way through 12th grade. There is no debate that we have one of the better managed instructional programs in the country, our data-driven instructional programs, the alignment of our curriculum and instructional models to the state standards, and I think it's reflected in the test scores. There's not a large urban 188 12/11/06 - EDUCATION - RES. 060806, ETC. district in this country that has shown the growth in test scores relative to their state scores that we've experienced. And let me point out that in 2002, we only had 28 schools making AYP. We have 166 schools making Adequate Yearly Progress, the No Child Left Behind standard. It's only half our schools, but in 2002, we had eight percent of our schools making Adequate Yearly Progress. So that reflects the fact that I think we've been taking care of business and we've been showing a lot of success. When we came in in 2002, we said the middle school system didn't work and we needed to reorganize the District. The District today is predominantly a K-to-8, 9-to-12 district. I think we've got about 14, 15 middle schools remaining. We used to have 44. And you're seeing it in the academic performance of middle-grade children and you're also seeing it in the behavioral support. 189 12/11/06 - EDUCATION - RES. 060806, ETC. Sixth graders were our most violent grade. In 2002, we had 136 teacher assaults among 6th graders. It was the most violent grade and it was the least productive grade academically. No 7 more, and I think it's because the K-to-5's have been adding 6th grade and 7th grade and 8th grade and we've significantly downsized the schools. But the School District has been reorganized into a K-to-8, 9-to-12 system. We also said as part of the reorganization our schools needed to get smaller. Well, today we have 36 small high schools. Today the average size of our high schools are a thousand kids. It used to be 1,700. And by '08, it will be 800 kids. Today half of our schools have fewer than 500 kids. And we have school choice. There are 84 high schools in this District. There used to be 42. There's a map that I put in, I believe, your left-hand packet. It shows the District's small high schools 190 12/11/06 - EDUCATION - RES. 060806, ETC. geographically distributed. Incidentally, it doesn't include some of the new high schools that we brought online this year. It shows all the high school choices, all 84, charter, select enrollment magnet, general enrollment schools. Again, 84 school choices. So if you look at those two color charts, it really drives home the point of what's available. School climate, serious incident reports are down 11 percent this year and last year they were down 14 percent. We're having success in the schools. Our school-based community policing, the cameras, the school-based police, our partnering with faith-based organizations is beginning to -- the school climates of the individual schools are changing. Olney and Kensington, which used to be nightmare schools, are now relatively peaceful schools. When that child was shot on his way to Olney, he ran to the school for protection. He 191 12/11/06 - EDUCATION - RES. 060806, ETC. didn't run away from the school, I might add. We have a 24-hour zero tolerance policy. The criticism of the alternative school providers aside, we do have seven alternative schools, and we do not expel to the street. We do expel to alternative schools, to alternative placements.
So we have made an attempt to provide alternatives to students who because of serious offenses need to be put in other learning environments, need to be taken out of the general school population and put in special population. I think all these alternative school providers need to be scrutinized and they need to be held to certain performance standards, as we do and as we will continue to do, whether it's CEP or not. 7 billion capital plan, and our capital plan is online, and you can look at projects done, you can look at projects in the planning stage, 192 12/11/06 - EDUCATION - RES. 060806, ETC. you can look at projects that we're currently negotiating contracts on. And as I mentioned, by the end of this year, with the exception of two schools, we will have either broken ground or contracted to begin construction once the permitting process has run its course on all the things promised, on all the things promised in the original capital plan. But I will tell you, the capital plan only addresses about one-third of our need. If you look at enrichment, there's another map here that identifies the accelerated learning schools. K-to-8 schools were reporting accelerated middle grade programs. In effect, we're magnetizing those neighborhood schools. We've restored AP honors and advanced placement to all of our high schools. Five of our high schools have international baccalaureate programs. We're, in effect, magnetizing the schools. 193 12/11/06 - EDUCATION - RES. 060806, ETC. So, again, this District literally had no high school AP honors or advanced placement, and other than the little gifted program, which was only reflected in a number of schools, most of the schools had no gifted and accelerated at all. We need to do more, but I just want to point out efforts that we have taken to expand accelerated and gifted and to put accelerated and gifted into as many of our schools as possible. On the enrichment side, we have a thousand more clubs than we had five years ago. We have almost 300 additional high school sports teams as we had four years ago, and you've seen the gym renovations and the super sites that we've created. Today we had a press conference. The reason I was a little late was, we had a press conference. The Archdiocese is joining the PIAA and is joining our division, Division 12. So now the Division 12 is going to be 194 12/11/06 - EDUCATION - RES. 060806, ETC. Philadelphia public and Catholic schools, and that's unprecedented to have that type of -- and why? Because we're not afraid of competition and because I think it's going to restore old rivalries and it's going to make our programs even more competitive. We've had a 200 percent increase in the number of scholarships that our high school athletes have gotten just through their exposure through the PIAA literally. So even on the enrichment side, the restoration of music and art, while slow, we certainly have done a stellar job providing music equipment and music materials. I'm not suggesting that we're anywhere near where we should be, but I'm mentioning that because you have to understand what you've gotten for that deficit. We've hit the wall, but we've accomplished a lot as we moved toward that wall. I do want to point out that had it not been for the City Council's 195 12/11/06 - EDUCATION - RES. 060806, ETC. efforts in earmarking the sports facility fund bond proceeds, we would not have renovated and replaced our materials. Councilwoman Blondell Reynolds Brown and the entire City Council has been very, very instrumental in that. So, again, these are things that have been going on since 2002. And, finally, on the parental outreach, we now have 180 Home and School Councils. One hundred twenty of our schools, I believe, have parent help desks. We have three parent leadership academies.
To help make the budget more transparent, we're in the process of creating a Parent and Community Budget Advisory Committee that's going to have complete access to all of our budget documents and who are going to shadow us in the coming months as we begin to deliberate the budget and will host a whole series of evening forums as the budget is debated and discussed. So in 196 12/11/06 - EDUCATION - RES. 060806, ETC. addition to the Budget Oversight Committee that the School Reform Commission has created, it's also our desire to create a public committee out there that can review and scrutinize our efforts. So, again, our efforts to institutionalize our parental involvement and a role for parents in the schools I think is certainly unprecedented. And someone asked about the TANF. Councilwoman Blackwell, we have close to 400 TANF volunteers in our schools, not to mention, I believe, over 250 parents working through community-based organizations as part of our school-based community policing initiative and, of course, the hundred parent truant officers, hopefully soon to be augmented by another 300 to 400 officers when the Council approves the Mayor's initiative. So, again, I think we've really attempted to institutionalize a role for 197 12/11/06 - EDUCATION - RES. 060806, ETC. our parents, and we're going to continue to institutionalize that role. But while a lot has been done, a lot needs to be done, and I want to talk about the things that we need to do that are going to require additional funding. I think there are going to be specific needs for additional monies that will emerge through our five-year plan. To sustain and expand upon our existing initiatives will require more resources, and we hope to identify what those dollars are and to reach a consensus with the City and other regulatory or oversight agencies hopefully in the coming months so there at least, as the Mayor pointed out, is a consensus on what it's going to take us to go the next five years. This Vision 2008 was a five-year vision. Now what's the next? What are we going to do in the next five years? And it's interesting because over the next five years, the next five years 198 12/11/06 - EDUCATION - RES. 060806, ETC. will end about the time that the No Child Left Behind 100 percent standard -- I believe it's 1214 -- is in effect. So clearly, we're going to need to be even more ambitious than we've currently been. But let me talk to you about the things that we absolutely need to do that we don't have funding for and that we need funding for, just not from the City but also from the State and hopefully additional Title I money from the new Congress. The first thing and probably the most important thing is, we need money for class size reduction. 3 students. That doesn't mean every class has kids. 22 Some schools have much more Title I than 23 other schools. So some schools, they 24 have class size reduction. Other schools 25 don't have class size reduction. But to 199 12/11/06 - EDUCATION - RES. 060806, ETC. get all of the classrooms below 25, at 21, 22, will require upwards to about 800 additional teachers, and we're going to preliminary cost out what it would cost for us to finance 800 additional teachers. You're probably talking something in the neighborhood of $60 to $70 million, but that would allow us to address that issue. And not something that we would need to do one year, but something we could phase in over three or over a four-year period. But we're not going to make any headway on class size reduction without additional resources. In fact, we've been struggling just to hold the gains that we've made in the past few years. And as you know, this past year, despite the addition of 119 teachers into the budget at the close of the last SRC budget deliberations, we did have to level.
Thus, we did have to take 62 teachers out of existing schools and move them to other schools that had overcrowding, and that was something that 200 12/11/06 - EDUCATION - RES. 060806, ETC. we would not want to do again, not want to repeat. But it is going to cost more money to do class size reduction. And it's just not a City issue. It's a State issue. There are many states out there, like California and others, where they've passed propositions to earmark state money and to mandate that the state fund class size reduction. The decision regarding adequate funding for the schools in New York State has ordered the Legislature to appropriate billions in additional money, not only statewide but I think $2 billion in additional money to New York alone. So it is going to take more resources. The second most important area is early childhood education. We have got to get all of our children in some sort of early childhood educational programs, and that means we have got to move towards -- in New York they're moving towards universal pre-school for 201 12/11/06 - EDUCATION - RES. 060806, ETC. four-year-olds. It's half day, but for four-year-olds. So every single four-year-old is in pre-school at least half a day. But we've got to expand our zero to three program. Someone told me there's close to 300 teen pregnancies a year in the Philadelphia area. And, again, teen pregnancies constitute -- the dropout rate among pregnant teens is 70 percent. I believe it's the second highest dropout rate. Incarcerated youth is the highest, I believe closer to 90 percent. Well, what about the children of the 70 percent who drop out, the pregnant teens? I bet their dropout rate may even be higher. So taking our early childhood programs to scale is absolutely critical. The Governor, every year he's provided incremental increases for early childhood education. But we have thousands of children that we need to reach. We have a program right now 202 12/11/06 - EDUCATION - RES. 060806, ETC. called Cradle to the Classroom. We try to identify all the pregnant teens, assign the pregnant teens a parent advocate, train the pregnant teens, get the pregnant teen back into high school, get the baby pre-school, daycare, wrap-around services, et cetera. And we know based on research that teens who have successfully gone through this program are four times more likely to graduate, and children who have gone through this program, particularly the early childhood component, are close to grade level by the time they reach third grade, no gap. But the biggest challenge we have in the program is not hiring enough parent advocates to work with the pregnant teens. It's getting enough daycare slots so that the pregnant teens can get back into school, because there aren't enough slots available for the babies of all the pregnant teens. So we're impeded by our ability to get 203 12/11/06 - EDUCATION - RES. 060806, ETC. pregnant teens back into school because there's nobody to care for the baby. So that's something that we're going to need help on, and that's something that we're costing out through the United Way and through their efforts, because they've made early childhood education a number one priority, and we hope in the next few months before we come before the budget and after we've seen what the Governor has proposed, that I've asked my staff to put a dollar amount on universal early childhood education, including zero to three. What we may be forced to do on the zero to three pregnant teens is to create a virtual school program so the pregnant teens can work to get their high school diploma at home while they're caring for their babies because of the lack of an early childhood program. So we've talked to June Brown and a number of the virtual school providers, because we're desperate to get the kids back into 204 12/11/06 - EDUCATION - RES. 060806, ETC. a high school program. The third most critical area is to fund our dropout prevention initiatives.
Now, we were asked to join the Youth Collaborative a couple years ago to do a comprehensive review of the Philadelphia dropout problems. I think we're one of only two districts to be bold enough to do that. Most school districts in most states underestimate their dropout numbers and they have a tendency to try to conceal the problem. We wanted to look at the problem. So we went back and we looked at dropouts. We looked at children who had entered the system 1996 to 2001, where were they now and where are they now. And the Youth Collaborative will detail the findings in that study. But the point of this exercise was to identify the problem and identify who the highest risk children are and to tailor programs to help those children. I think your overall reforms 205 12/11/06 - EDUCATION - RES. 060806, ETC. are reorganization, our early childhood, our expanded, our high school reforms, our standardized curriculum instructional models. I think they'll help close the gap over the long term. I think they'll help improve student achievement. But you know what? We've got kids at risk today and tomorrow and the next year and the following year. We need special interventions. We need to bring the Cradle to the Classroom programs to scale for our pregnant teens. We need to dramatically expand our transition schools. A large percentage of our kids who drop out are overage underachievers. Kids don't have to start school in Pennsylvania until they're eight years old. Prior to this, close to 3,000 kids every year would start a school a year or two late. And let me tell you, it's not like they were home schooled. That's been cut in half by about 50 percent because of our expanded early childhood programs. We get the 206 12/11/06 - EDUCATION - RES. 060806, ETC. kids early. The parents, great. The kids are on track. But we still had 1,400, 1,500 kids start school a year or two late, and where do you stick an 8th grader? In kindergarten? First grade? Second grade? Ninety percent of our disruptive incidents are academically failing kids. Sixty percent of our disruptive incidents are caused by overage kids, overage underachievers. So as part of the Youth Collaborative, we're going to push for the expansion of our transition schools. These are small schools that take 15, 16-year-old middle grade schools and 17-year-old freshmen who are academically failing and they put them in small self-contained schools. We have four of those schools, and they're having great results. New York copied our program, but with the resources they have, they just decided that they're going to have 20. If we could add five or six or seven 207 12/11/06 - EDUCATION - RES. 060806, ETC. additional schools, we could get so many kids off the street and we could get the overage underachieving kids out of the general high school, thus providing the general high school with relief. The point that I'm trying to make is, there are things in this Youth Collaborative study. There are programs to be brought to scale. This is a unique study, and not only does it comprehensively identify the problem but it does even more than that. It talks about real solutions, solutions that have piloted, solutions that have shown success. It's like you see the cure. Now the question is can you manufacture the drug that can cure the disease. You see? So those things need to be brought to scale, too. But I'm going to continue to do pilot. I'm going to continue to run my own airport with all the little pilots I have until we get enough money to bring those type of 208 12/11/06 - EDUCATION - RES. 060806, ETC. programs to scale. The fourth thing is classroom modernization. Now, I've been talking both publicly, collectively, individually all about classroom modernization. We talk about the next phase of the capital plan.
Well, $500 to $600 million, a number I have put out for the better part of a year and a half, would enable us to modernize every classroom, SMART Boards, Whiteboards, laptop computers, furniture, a furniture buildout to the classrooms. So every ugly high-rise building would at least have state-of-the-art modernized classrooms that would educate kids in an environment equal, if not superior, to the suburbs. Because when you have a great managed instructional program and you add classroom technology to it, it allows you to take curriculum and instruction to the next level. And that's achievable, because a lot of the money that would be needed to do that is money that you could, in effect, bond. 209 12/11/06 - EDUCATION - RES. 060806, ETC. You could raise the proceeds from bonding. We worked with Senator Fumo to get an earmark of $5 million in casino revenue specifically to purchase laptops and SMART Boards from the schools. And then, finally, we need a fifth phase of the capital plan. We're going to be running out of money shortly, and we at least need a second phase. And what do we need to do in the second phase? We need to fund those things that are going to help us enhance our education reforms. The first thing is, we need about $150 million a year in capital just to maintain our buildings. I mean, because of years of deferred 19 maintenance, Bache is collapsing. I have 20 to find a new location for Bache. Wanamaker is vacant. I have to find a new location for Wanamaker. Now Ada Lewis because it was never renovated, it was never maintained, that building can't be repaired. Overbrook cannot be 210 12/11/06 - EDUCATION - RES. 060806, ETC. repaired. I've got to find a replacement building for that. We need 150 million in capital just to maintain our buildings. Everybody looks at the School District's capital plan without realizing three-fourths of the money is just going into maintenance. It's just not going into new buildings and replacement buildings. But we also have K-to-5 schools and small high schools that are in need of annexes, small annexes, $5 million a piece that can provide gyms, cafeterias, multi-purpose rooms. We need to do the tuckpointing and window replacements in our schools that will keep our schools from further deteriorating, and obviously we need to do the classroom modernization. Just a small expansion of the capital plan by a billion dollars or so would allow us to have another three years of catch-up maintenance. It will 211 12/11/06 - EDUCATION - RES. 060806, ETC. allow us to do window replacements. It will allow us to do our window replacements and tuckpointing. Go look at Strawberry Mansion with the window replacements and tuckpointing on the Strawberry Mansion High School side of that campus. And it would allow us to build at least annexes in schools that 10 are K-to-8 and small high schools that 11 need the gyms and the auditoriums. 12 So we in the next couple of 13 months are going to be costing these 14 things out and we're going to be 15 presenting them not only through the 16 Mayor's task force on school reform, but 17 obviously this is going to be part of our 18 legislative agenda for Harrisburg as well 19 as Washington, and obviously it's going 20 to be part of our budget presentation for you. And many of these things I've talked about, like classroom modernization and the expanded capital plan and many of the youth collaboratives, are not new things. 212 12/11/06 - EDUCATION - RES. 060806, ETC. These are things that I've talked about in the past, sometimes individually and collectively, as we move forward. So, again, I think the District has accomplished a lot since 2002, and it's accomplished a lot because of the support that we've received from our Mayor and the support that we've received from the Legislature.
I don't know where we'd be without the leadership of John Perzel or, for that matter, without the leadership of Dwight Evans and Tony Williams and others in the Senate or Vince Fumo in the Senate and the things -- Dwight Evans is in the House, I might add, and the legislative officials who have really stepped up to the plate to support us, and likewise to City Council, because I have never lost sight of the fact that when the 2002 Reform Act was passed, the City also provided the School District with an additional $40 million in funds to help us not only close the gap but also give us the 213 12/11/06 - EDUCATION - RES. 060806, ETC. flexibility to move forward. But we're at a crossroads. The first kind of five-year school reform cycle is over, and now we need to decide what it's going to take us to not only sustain those reforms, but to go to the next level. And I'm not afraid to ask for money. I may need to ask for it more publicly than I have in the past, because as you know, my approach has always been to privately lobby and privately complain and privately try to wear people out, while publicly you maintain a certain decorum. But we've accomplished a lot. I think the District is poised to go to the next level, but going to the next level is going to require a much greater investment, not only on the part of the State but also on the part of the City. I also want to clarify one thing, too, because I lobby the Legislature all the time on school funding. I have just refused to chastise 214 12/11/06 - EDUCATION - RES. 060806, ETC. the Legislature. One of the things I learned is, you never criticize people who can give you money, because they can always say no. And even if they haven't given it to you in the past, it will make them even more entrenched. And I'll tell you, my approach has always been with Harrisburg to go to Harrisburg and to ask Harrisburg for things that we deserve. And I believe we deserve more money. No 12 one should ever misrepresent me saying we don't deserve it. I've made a case. It's hard to argue with 166 schools making AYP, some of the biggest increases in test scores, all the things we've been able to do with the limited resources we have. But my approach is also to ask for things that other school districts are asking for. Because you know as well as I do, there are individuals who do not support public schools and there are individuals who do not support public schools in Philadelphia, who will use 215 12/11/06 - EDUCATION - RES. 060806, ETC. Philadelphia as an excuse to oppose funding for a public education. So our approach is to be part of a coalition rather than taking the lead. When I've met with many of the school activists, the school reformers who have been litigating and challenging the Legislature for years on school funding issues, they always tell me that there are other districts in the State that are poor and struggling and they need to be at the forefront, and we need to be part of them. We need to be in solidarity. So when we hit this budget crunch, the absolute last thing that I was going to do was going to go to the Legislature and say, We have a budget crisis, give us more money. I mean, first of all, we wouldn't have gotten any, and, secondly, that would have just emboldened those who didn't want to give Philadelphia any money in the first place not to provide additional funding. 216 12/11/06 - EDUCATION - RES. 060806, ETC. So the bottom line is, we'll be ready to go to Harrisburg, as we always have, as part of a much broader coalition. And we have a willing Governor and hopefully a supportive Legislature. So hopefully the Legislature will help us -- if we do as well over the next four years as we've done over the previous four years, it's going to put us in better shape.
But we hope to cost out in the coming months as we finalize our five-year plan the specific things that we need to do to take this District to the next level, and then obviously once we agree on the numbers, figure out a strategy on how we're going to financially do what we need to do in order to get there. Madam Chairman, I want to thank you for your indulgence, and we will take any questions you have.
Thank you very much. After you outlined our needs, I had 20 questions. I almost 217 12/11/06 - EDUCATION - RES. 060806, ETC. don't want to ask any. We'll give everybody an opportunity to ask a few questions. I'll ask one. What about the issue that we've been concerned about of District requirements versus schools? They're afraid that when it comes down to it, schools still have to decide whether they keep music teachers and art teachers and librarians and all of that in their own allotment versus the money they get from the District.
Let me respond to that by saying -- first of all, let me make a comment about teacher recruitment and retention. Right now I think -- and Tomas will verify that number. How many vacancies do we have in the District right now?
I mean, this District always would run 160, 170 vacancies. We've been running about 50. 218 12/11/06 - EDUCATION - RES. 060806, ETC. We actually sat on some vacancies and we had them filled by full-time substitutes because we had the bouncing, but after the bouncing is done, we'll have under 6 vacancies in a district with 10,400 7 classroom teachers. 8 I also want to point out 9 that -- and this is because of the 10 efforts of Sandra Dungee Glenn and the 11 Campaign for Human Capital. I mean, we 12 literally -- our retention rate among new 13 teachers is 93 percent. It used to be 72 14 percent. Our certification rate is at a 15 highest level ever. You know, 750 16 teachers have left this system because of 17 their failure to become highly qualified 18 under the No Child Left Behind standard, 19 yet we have virtually no vacancies. 20 So clearly, we've made a lot of gains. And let me point out that as we speak, we have over 1,200 university interns working in our schools, student teachers, student counselors, students doing their internships and things like 219 12/11/06 - EDUCATION - RES. 060806, ETC. that. So what we've attempted to do is -- I think we've done a good job recruiting teachers, and we have many more applicants than we have spots for, but the problem with some of these supplemental positions is, quite frankly, we don't have the money to provide a librarian for every elementary school, to provide a freed-up music teacher for every elementary school, freed-up art teacher for every elementary school. Schools get an allocation, but sometimes it's not a full teacher allocation. They get an allocation and then they have to make a decision as to whether or not they're going to fund that position partly out of what we give them and partly out of what they have in Title I or use that money to hire another teacher. So some schools, Madam Chairman, do have to make the choice. They shouldn't have to make the choice. 220 12/11/06 - EDUCATION - RES. 060806, ETC. In an ideal world, they should not have to make the choice between a music teacher and an art teacher and a third grade teacher, but because of our desire to reduce class size at the elementary school, many schools have had to make that choice. If we fund a District-wide class size reduction initiative with a goal towards getting all of our classrooms down below 25, so you have 22, kids in the classroom, this is what's 14 going to happen. Schools with a lot of 15 Title I money are going to have 17, 18 16 kids in primary grade classrooms, and a 17 lot of schools are going to -- more 18 schools, if not most of the schools, are 19 going to be able to hire that full-time 20 art and full-time music teacher, you see, 21 but not without that additional 22 commitment will we be able to address 23 that issue.
Madam Chair, if I may, I'd like to add something to 221 12/11/06 - EDUCATION - RES. 060806, ETC. that. There is another thing that we are taking a look at, the Commission, and we've asked Mr. Vallas and his team to take a look at it as well that's a different approach, if you would, to funding and providing the dollars to schools, called weighted student funding, and what that does is, the District would be very clear about the outcomes and some of the standardized things like the curriculum that we would have in place, but it would provide more flexibility to schools to determine on a school-by-school basis what their priorities might be, whether they would choose to have a music teacher and an art teacher and a librarian versus some other kinds of programs. They could look at their school needs, and it would be not as much cookie cutter from the central office. There would be more flexibility allowed to the schools. It's been tried in some other districts, like San Francisco. I believe 222 12/11/06 - EDUCATION - RES. 060806, ETC. Cincinnati is taking a look at it. And what it does, it also helps to deal with the issue of equity, where you have schools are funded depending on the kinds of children they have to educate. So it provides some flexibility around the dollars that would come in, if you had more children who are English language learners, more children who may be low income. And so the dollars, in other words, follow the child more closely. And those issues that you raised about schools making choices, it helps to ameliorate some of that. It's an issue in the very early stages for this District to take a look at, but it's something that we think might give more flexibility to schools and supports for that very reason.
There's a lot of national interest in this, too. There's a national coalition that has formed, people from the right and the left and the center, or whatever, all looking at 223 12/11/06 - EDUCATION - RES. 060806, ETC. this issue. And at the state level, I believe there was a resolution to study the whole equity thing. So this thing has some momentum behind it, and Sandra has asked us to meet with some of the national experts on this and to perhaps consider identifying schools or clusters of schools where we can pilot this initiative. But it's the next trend, because right now, I mean, the money doesn't really follow the kids. The positions follow the kids, but the positions have no relationship to the actual dollars. And this has been tried and it's shown a lot of success in school districts like San Francisco, I think Cincinnati to a lesser extent. So we're looking at this. And obviously if we have a good funding year next year, this would be something well worth trying.