Charter Schools, Harrisburg & Mayor Peduto Created Pittsburgh Public Schools’ Budget Deficit

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Where did all the money go?

 

 

Pittsburgh Public Schools will start 2020 with a $25.1 million budget deficit.

 

 

Superintendent Dr. Anthony Hamlet has asked for a 2.3% tax increase to cover the shortfall, but school directors ended up approving his spending plan without approving the tax increase.

 

 

The school board will meet on Friday to decide whether to ultimately raise taxes or make cuts including possible staff furloughs.

 

 

But in the meantime, city residents are left wondering why the measure was necessary in the first place.

 

 

After all, student enrollment has gone down at the second biggest district in the state after Philadelphia, yet spending is up 2.4% from 2019.

 

 

It really all comes down to three things: charter schools, retirement costs and tax revenue differed to the city.

 

 

CHARTER SCHOOLS

 

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Charter schools are funded with tax dollars but often privately run. As such, any student living within district boundaries takes funding away from the district.

 

 

And the amount of money keeps rising even though enrollment has not increased at these charter schools.

 

 

Since 2014, the amount the district has sent to these privatized schools has gone up by 88%.

 

 

In 2019, the district paid $95,129,023 to charter schools. In the proposed 2020 budget, new district projections put the expenditure at $102,150,444. That’s an increase of $7,021,421 in a single year.

 

 

 

So the cost of charter schools is 15% of the entire proposed budget. If it were eliminated, the district wouldn’t have a budget deficit at all – it would be running with a dramatic surplus.

 

 

And this is money that need not be spent.

 

 

Only about 6% of public school students state-wide are enrolled in these schools, and they duplicate services students are already receiving. Yet charter schools provide little value for students.

 

 

Nearly every study has found that charter schools do not produce better academic results than authentic public schools – in fact, many drastically underperform their public school counterparts.

 

 

For instance, a recent study of charter school students in Pennsylvania conducted by the school privatization friendly Center for Research on EDucation Outcomes (CREDO), found that charter students do about the same on reading exams but score worse in math than students in authentic public schools. The study also found major disparities between charter schools – with cyber charters performing especially poorly.

 

 

In addition they have been found to increase racial segregation, cherrypick students, increase administrative overhead and discriminate against students with special needs.

 

 

But the state passed a law in 1997 allowing charter schools and there is nothing Pittsburgh Public Schools can do but continue to pay for them.

 

 

School directors, administrators, teachers, students, parents and concerned citizens can lobby their representatives in Harrisburg to fix these problems, but until they do there is little local districts can do.

 

 

However, the fact that charter schools increase local taxes is beyond doubt.

 

 

According to a recent report by the Pennsylvania Association of School Business Officials (PASBO), state charter schools are growing at a rate of 10 percent a year. The PASBO calculates at least 37 cents of every new dollar of property taxes in the fiscal year 2017-2018 went right to charters. And that percentage is only expected to grow.

 

 

RETIREMENT COSTS

 

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Another large expenditure beyond the district’s control is retirement costs.

 

 

In 2019, the district spent $73,769,809 on contributions to the Public School Employees’ Retirement System (PSERS). In 2020, that number is expected to increase to $76,770,577. That’s an increase of $3,000,768.

 

 

Why the increase?

 

 

Because our state lawmakers were fiscally irresponsible.

 

 

Basically, the legislature stopped paying the bills for nearly two decades.

 

 

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The state government, local school districts and commonwealth employees are responsible for paying into the pension system. Districts and state workers made all their payments. Employees put aside 7.5% of their salaries every year to pay for their retirement.

 

 

But the legislature didn’t make its payments. It pushed them off to the future, and now that the future’s here, a larger percentage of the cost has fallen on local school districts.

 

 

It’s a problem of Harrisburg’s making and – frankly – the legislature should be buckling down to find a solution.

 

 

But instead they’re planning on the cynical assumption that voters are too stupid to understand it all and will just blame public school employees for demanding what we promised them when they were hired. The legislature has continuously reduced benefits for future employees and tried to illegally cut benefits for current ones.

 

 

What they should do is increase taxes on the wealthy and pay their damn bills.

 

 

We had a contract with employees when they were hired. We can’t renege on it now that they’ve retired.

 

 

Once again this is something Pittsburgh Public school directors and administrators have no control over. It will take a combined effort by local communities across the Commonwealth to lobby Harrisburg to get off its ass and fix the problem it made.

 

 

MAYOR PEDUTO

 

 

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The final factor behind the proposed tax increase is Pittsburgh Mayor Bill Peduto.

 

 

When the city was on the verge of financial collapse 15 years ago, the school district agreed to help by diverting a portion of its tax revenue to the city.

 

 

Now that the city is out of financial distress (and has been since 2018), Dr. Hamlet has suggested the city should return that money – not back payments, just stop taking the additional tax revenue. Administrators estimate that would bring in another $20 million for the city school district.

 

 

It wouldn’t heal the budget shortfall all by itself, but it would certainly help.

 

 

However, Peduto has furiously raged that he would not support such a measure and would fight it in Harrisburg.

 

 

Frankly, it’s a real dick move.

 

 

When asked about it he deflects to criticisms of the Hamlet administration that really have nothing to do with anything.

 

 

It’s really a simple matter. The schools lent the city money when it was in distress. The city is no longer in distress, so it should stop taking that additional money.

 

 

SOLUTIONS

 

 

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The first thing that has to be done is for Pittsburgh Public School directors to put on their grown up pants and raise taxes.

 

 

Look, I get it. No one wants to raise millage. But sometimes being an adult means doing things you don’t want to do.

 

 

And frankly, it’s not really that hard a call.

 

 

Pittsburgh Public Schools has the lowest tax rate in Allegheny County at only 9.84 mills. Most suburban districts range from 12 to 31 mils.

 

 

The proposed tax increase would mean paying an additional $23 for a property valued at $100,000.

 

 

This is not an unbearable burden.
Some complain that it would push city residents to move – but really anywhere else you move will have higher taxes! Anyone who packs up and moves away will not be doing it for financial reasons.

 

 

According to the district’s own Website, 67% of its students are non-white. Only 33% are white, with 53% African American and 14% other races.

 

 

Anyone complaining about money being spent on district students is upset about money being spent on THOSE KIDS. Just as so many of the criticisms of Dr. Hamlet, who is black, come down to an inability to accept a person of color in a position of power – especially if he isn’t going to simply give in to corporate interests looking to pick the district dry.

 

 

The fact is the majority of district students live in poverty. Though enrollment has gone down, that has allowed per pupil expenditures to increase and help heal the trauma of penury.

 

 

These kids need smaller class sizes, more tutoring, librarians, counselors, wider curriculum, etc. The money being spent on them is not wasted. In fact, in a perfect world it would be increased. We need to spend MORE on our poorest students than our most privileged ones to help them catch up.

 

 

I am thankful that board members Veronica Edwards, Pam Harbin, Devon Taliaferro, and Sylvia Wilson understood that by voting for both the proposed budget and the tax increase.

 

 

Kevin Carter, at least approved the spending plan, but he abstained from voting on whether the district should raise taxes, explaining later that he promised his constituents that was something he wouldn’t do.

 

 

Board members Cindy Falls, Bill Gallagher, Terry Kennedy, and Sala Udin voted against both measures.

 

 

Here’s hoping they find the courage to do what’s right after the holidays.

 

 

But even if they do, there is much more we must accomplish – and it requires everyone.

 

 

City residents need to rise up and demand their representatives put out the raging dumpster fires they keep lighting.

 

 

We need a state legislature willing to take on the charter school industry and at very least stop making it compete with authentic public schools for funding.

 

 

We need lawmakers willing to make the wealthy pay their fair share so the rest of us get the civil society we deserve – and that includes paying for the pension obligations we’ve already incurred.

 

 

And Pittsburgh needs a mayor who isn’t going to rage and foam at the prospect of FairPlay and will return the money Pittsburgh Public lent to the city.

 


 

Like this post? I’ve written a book, “Gadfly on the Wall: A Public School Teacher Speaks Out on Racism and Reform,” now available from Garn Press. Ten percent of the proceeds go to the Badass Teachers Association. Check it out!

 

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Pittsburgh Mayor’s Tantrum About School Finances Proves He Doesn’t Understand Education or Equity

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Pittsburgh Mayor Bill Peduto is steaming mad and he doesn’t care who knows it.

 

On Tuesday he raved that Pittsburgh Public Schools’ finances should be taken over by the state – the same fate the city had suffered during its own economic troubles from 2004-18.

 

The reason Peduto thinks the school should submit to a financial recovery plan overseen by a state appointed board? School Superintendent Dr. Anthony Hamlet is proposing a 2.3% tax increase in 2020 for a reserve fund while Peduto’s municipal government allegedly is managing with a surplus.

 

If the city can manage its finances without a tax increase, wonders Peduto, why can’t the school district?

 

However, the Mayor’s narrative conveniently leaves out a few pertinent facts.

 

Most importantly – during the city’s economic trouble 14 years ago, Pittsburgh Public Schools gave a portion of their tax revenue to the municipal government to help it pay the bills.

 

Now that the city is doing better, school officials are suggesting Peduto should give that tax revenue back to the schools. And that suggestion infuriates the mayor.

 

In addition, it’s not true that Pittsburgh’s 2020 budget includes no tax increase.

 

The city is raising taxes by about 6% to pay for upkeep at its parks. However, since this tax is the result of a referendum approved by the voters, it is being spun as a “no new taxes” budget.

 

The city has a surplus due to construction of new high-end apartments. City Council could have budgeted some of this money to pay for the parks. Instead, leaders like Peduto were too cowardly to take the blame, themselves, and put it out as a question to voters.

 

It is entirely unfair to criticize Pittsburgh Public Schools for raising taxes a smaller degree (2.3%) than the city is (6%).

 

Both entities spend about the same amount annually. In 2020, the city has a proposed $608 million budget, and the schools have a proposed $665.6 million budget.

 

Moreover, there is nothing unfair about school officials asking for the tax revenue back from the city that they generously offered it when the municipality was in need.

 

Now that the city is out of peril (and has been since 2018), it should pay back that money. To be honest, it should do so with 14 years worth of interest – but no one is suggesting that.

 

At least it is time for Pittsburgh to stop leeching off its schools and give this revenue back.

 

The fact that Peduto is whining about something so obviously fair and equitable makes him look like a spoiled child.

 

The same goes for his suggestion of state takeover of district finances.

 

Pittsburgh Public Schools already is audited by the state every year. It is not on the state watchlist for districts in financial distress.

 

District spokeswoman Ebony Pugh said, “There have been no significant issues raised related to how the district conducts its finances.”

 

Peduto just wants the schools to have to endure the same indignity the city did thereby putting municipal leaders in a better light.

 

After all, it was the school district which helped the city – not the other way round. And it was the city that needed the state to take over its finances, not the schools.

 

It was Pittsburgh Public School’s Chief Financial Officer Ronald Joseph who explicitly proposed a take-back of wage tax revenue that was diverted to the city in 2005.

 

City residents pay a 3% wage tax. Of this money, originally 2% went to the schools and 1% to the city.

 

When the city was placed under Act 47 state oversight, the formula was changed to give a quarter percent more to the city from the school’s allotment – thus 1.75% went to the schools and 1.25% went to the city.

 

Pittsburgh left Act 47 in 2018 but the wage tax distribution has remained the same.

 

“Why in the heck can’t the school board balance their budget?” Peduto said. “Where is all this money going?”

 

Answer: Some of it is still going unnecessarily to fill your municipal coffers.

 

Peduto added:

 

“If they are looking to have part of the city’s wage tax, then they should be willing to open the books and let the state come in and do exactly what we had to do through Act 47, which was difficult restructuring for the future. If we didn’t have that, the city would be bankrupt.”

 

So let me get this straight. In order to give back the revenue the schools generously loaned the city, you need a look at their finances? I sure wouldn’t lend you a dollar or else I’d have to show you my tax returns and checking account just to get the loan repaid.

 

Peduto went on:

 

“If they simply say, ‘We’re going to take your revenue to fix our hole,’ and not be the leaders that they were elected to be in making tough decisions like raising taxes, then I have no time for that, absolutely none, and I will fight them in Harrisburg.”

 

How generous! That’s like threatening to go to Mom and Dad to settle your dispute. A real leader would know he was in the wrong and just pay up.

 

This isn’t the first time Peduto has clashed with city schools.

 

He seems to think his role as mayor supersedes that of the school district which operates independently through an elected nine-member board.

 
He said as much in 2018 when district negotiations with the Pittsburgh Federation of Teachers (PFT) threatened to spill over into the first teachers strike in more than 40 years.

 

Peduto wanted to mediate between the teachers and school administrators – a measure Dr. Hamlet patently refused.

 

Peduto said:

 

“They have to remember they’re a board. They’re not a government. They’re no different than the water board or the Port Authority board or the airport board. They’re a board of education. Their job should be solely making sure that kids are getting a good education. When there becomes labor strife in the city, labor strife that could affect the economic development of the city for years to come, they need to move out of the way and let [elected] leaders lead.”

 

Dr, Hamlet said this was a “bargaining process, not a political” one, and that Peduto needed to let administration continue the process of bargaining with the teachers – a process that resulted in a new contract without a strike.

 

The relationship has been chilly even before Hamlet was hired in 2016.

 

In a community where district funding is constantly at risk from unregulated and unaccountable charter schools, Peduto actually presided over a 2014 ribbon cutting ceremony at the Hill House Passport Academy Charter School.

 

 

Charter school costs are one of the largest expenses the district pays annually.

 

 

According to PennLive.com, the district paid $79 million (or about 12% of its budget) in 2017-18 to these institutions which are funded with public tax dollars but privately run.

 
Like many charter schools, the Hill District institution is incredibly segregated. According to ProPublica, 96% of students are children of color. It has no gifted program, offers no AP courses, has no students taking the SAT or ACT test, no calculus classes, no advanced math, no physics, geometry, chemistry or 8th grade algebra courses.

 

In short, this is not the type of school the mayor of a major metropolitan center should be promoting.

 

And Peduto would know that if he had any knowledge of how school systems actually work. Before entering city politics, the Democrat ran a consulting business and served as Chief of Staff to City Councilman Dan Cohen.

 

Since his first successful campaign for mayor in 2013, Peduto has had a history of making bold promises to the Pittsburgh Public Schools that have not always come to fruition.

 

Peduto said he would lobby for additional funding for city schools in Harrisburg but district solicitor Ira Weiss said the mayor never followed through.

 

 

Peduto proposed increasing school revenue by helping to rent out unused school space. That hasn’t happened, either, said Weiss.

 

Peduto suggested increasing student after school programs by working together with the district and others like the YMCA and the Student Conservation Association. While a few such programs do exist, there is no broad collaboration, said Errika Fearby Jones, the executive director of Dr. Hamlet’s office.

 

Peduto’s summer reading program with the city and the Carnegie Library of Pittsburgh likewise never materialized – though the library runs its own program.

 

Moreover, Peduto’s plan to restart the Generations Together program with the University of Pittsburgh to promote cross-generational learning never happened either. Pitt shut down the program in 2002.

 

Curtiss Porter, who served as Peduto’s chief education and neighborhood reinvestment officer during the first year of his administration, blames the problem on a disagreement about who should be in charge.

 

The city and school district had a good working relationship when he was there, he said, but there was “a clear demarcation” between the two bodies, which made it difficult to implement some of Peduto’s ideas.

 
“At critical junctures…the school district made it clear that they were willing partners but that they did not have to bow to the city,” he said. “[They] made it clear the city had no jurisdiction over education.”

 

And that disconnect appears to continue today.

 

Peduto is engaged in an ignorant and arrogant power struggle with city schools that helps no one.

 


 

 

Like this post? I’ve written a book, “Gadfly on the Wall: A Public School Teacher Speaks Out on Racism and Reform,” now available from Garn Press. Ten percent of the proceeds go to the Badass Teachers Association. Check it out!

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