And there was the financial problem: District chief financial officer Michael Masch and Ackerman did not like each other, and reportedly stopped discussing budgetary matters in spring 2010. That October, Masch reported that the district faced a shortfall of more than $250 million as stimulus money ran out. Yet by January 2011, he still insisted to the SRC: "We don't have a budget crisis."
At the same time, money was flying out the door. That month, the district paid out $63 million to Morgan Stanley Capital Services, Goldman Sachs Capital Markets and Wells Fargo Bank to cancel a budgetary gamble gone horribly wrong. In 2004, at the height of the pre-recession financial deregulation adventure, the district took out something called "interest-rate swaps" on a number of bonds. The swaps were supposed to protect the district from high interest rates. But interest rates crashed, and the district lost an astonishing $71.87 million, according to the liberal Pennsylvania Budget and Policy Center.
Then came Corbett's announcement of $1 billion in education cuts. The district's shortfall grew to $629 million. Critics pilloried Ackerman for poor planning and for spending money on pet projects. Ackerman, on her way out with a $900,000 severance package, blamed Masch.
The public memory of Ackerman is defined by her authoritarianism and grandstanding. Low points include accusations launched against Asian student victims at South Philly High, retaliation against whistleblowers speaking out on improper contracting, tumult following the removal of a popular principal at West Philly High, the persecution of Audenried teacher Hope Moffett, who spoke out against charter conversions, and, of course, the propaganda machine. Ackerman's legacy is still being hashed out: the Renaissance Schools turnaround program for low-performing schools, which turned some schools over to charters, is still in effect.
But, as that drama played out, most people forgot one important thing: The state, not the city, was in charge the entire time — and it still is.
On the morning of Nov. 29, 2001, hundreds of students walked out of class and into Philadelphia streets to protest the state takeover — enacted via the General Assembly in purported response to budget woes and poor performance — and a plan to put for-profit Edison Schools Inc. in charge of the central office and 60 low-performing schools.
The takeover, originally scheduled for Nov. 30, was pushed back to Dec. 21. But the walkouts, coordinated by PSU and Youth United for Change, continued on Dec. 18, and U.S Rep. Chaka Fattah sought, and failed to get, an injunction blocking Edison contract. He alleged a conflict of interest: Former Gov. Tom Ridge had contracted Edison to study privatization, they had recommended privatization and they were now poised to take the business.
Street, too, criticized the takeover, but he soon reached a new deal with Ridge's replacement, Gov. Mark Schweiker: The city would get $75 million in aid and two appointments, instead of one, to the five-member SRC; Edison would not take over district headquarters; and the number of schools turned over to them would be reduced.
Even scaled back, it would be American public education's greatest foray into privatization, and the largest state takeover, too.
The protests against the new SRC continued into 2002, and City Council, Philadelphia Federation of Teachers, PSU and NAACP filed more lawsuits. But on April 18, a student blockade couldn't stop privatization: Edison got 20 schools, and 22 schools were handed over to other private companies.
"I'm a corporate guy, and the bottom line is that you have a firm that has systemwide experience," said then-SRC chairman James Nevels at the time. "What we wanted to do was capture that experience." That experience included Chester Upland, where Nevels had served on the state-appointed Board of Control that gave Edison control of eight of nine district schools. Four years later, Edison left Chester. After a lackluster performance, the for-profit "educational management organizations" left Philly, too.
Former Mayor Ed Rendell, then running for governor, endorsed the takeover, but told the Inquirer, "We must not lose sight of what was the real issue . . . adequate funding for all of Pennsylvania's schools."
Of course, it's been a long time since Philly schools had close to adequate funding — and for the past decade, city leaders have not fought much to rectify that. Amid the tumult of protests, Street terminated Philly's last vocal demand for more money when he withdrew a federal lawsuit contending that state underfunding to Philadelphia schools constituted race discrimination.
The lawsuit, filed under feisty Superintendent David Hornbeck, tried to accomplish in federal court what had already failed at the state level. Pennsylvania Supreme Court had in 1999 ruled against two lawsuits — one filed by the Philadelphia School District, the city, the NAACP and parents; the second filed by the Association of Rural and Small Schools — contending that Harrisburg's inequitable funding violated the state constitution's requirement that the "General Assembly ... provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth."
The district faced an $80 million budget shortfall at the time, exacerbated by policy changes under Ridge and Gov. Robert Casey that reduced the share of education funding accorded to poor districts. The funding gap between Philly and suburban school districts had doubled in just six years, and Philly had needs that wealthy schools did not — involving day care, security, immigrant students who do not speak English and, most importantly, students who come to school with more problems and less preparation.
"It's not like prior to that Philadelphia got its fair share," Hornbeck tells CP from Baltimore, where he now lives. "It's just that they got even more gouged."
Hornbeck was a civil rights leader for Philadelphia's children: With Rendell's backing, he refused to make further cuts and threatened to let the schools shutdown. In fact, the initial move toward state takeover, 1998's Act 46, was the response of an angry legislature to block Hornbeck from carrying out this threat. In the process, teachers lost the right to strike. After Hornbeck's June 2000 resignation, there would be no serious demand for fair funding from a city or school district leader.
In 2001, Hornbeck took his fight statewide, founding Good Schools Pennsylvania to mobilize behind Gov. Rendell's plan for increased funding. Today, school and city leadership implement Corbett's plans instead of fighting them.
"The real culprit," says Hornbeck, "has less to do with any kind of mismanagement at the school district and much more to do with the continued shortchanging of the district in financial terms by the state. The biggest indictment that can be brought against folks in the city is the lack of advocacy, aggressiveness, on behalf of the kids."
In 2002, poor students of color became the talk of Washington. President George W. Bush signed No Child Left Behind (NCLB), requiring aggressive interventions at schools where students failed to make Adequate Yearly Progress on tests.
Testifying in favor of the law was Superintendent Paul Vallas, who took over Philly schools in 2002. Vallas broke with teachers' unions and superintendents across the state, who correctly predicted that the law would become a hated one. They foresaw that teachers would give up an ever-larger part of the school day to teach to the test (or as we now see, cheat to the test), while science, arts, social studies, physical education and recess were winnowed out.
Vallas eagerly embraced the new law. He turned over three schools — Shoemaker, Pickett and Thomas — to Mastery Charter Schools, a private nonprofit, and paid millions of dollars to Kaplan for a test-prep curriculum.
In recent years, President Barack Obama has doubled down on NCLB, despite criticizing the law during his 2008 campaign. His "Race to the Top" grants condition federal funding on increasing the importance of high-stakes tests, and on the removal of constraints on charter growth.
So the state took over Philly schools, and the federal government took on a growing role in classroom management. Neither, however, would take responsibility for funding the schools. Gov. Rendell, at least, did try. In June 2006, the legislature voted to ask an important question: Just how much money did Pennsylvania schools need, and how much were they receiving? Pennsylvania, according to the "costing out" study, needed to spend $4.6 billion more on schools per year, a 26.8 percent increase. Philly, with a poor tax base and dire needs, required nearly $1 billion more each year. Armed with data, Rendell in 2008 cajoled the legislature into directing resources to under-funded districts.