When Leaders Fail

Playing out in Philadelphia, is a sad saga of political will more akin to “jello”.  The combination of State and City Government combined with Union leadership are making the words “small ball” come alive.  Are there no adults in the room?

In general terms, Philadelphia is a city on the rebound.  The center city area is a pleasant place to visit.  The local Universities are growing and bringing new life to the city.  Philadelphia offers great food and top quality arts and museums.  And comparatively, it is a safe city.  Small by New York or Chicago standards, compact by Los Angeles measures.  Still a very pleasant city.

So why the worry about leaders?

Philadelphia also has some problems.  Its tax base has shrunk (surprise, surprise) and yearly budgets exceed the projected revenues.  Firemen and Police won small increases (in exchange for some give backs) and municipal workers are still trying to get similar or better treatment (don’t hold your breaths).  But the center stage spot is now reserved for Philadelphia public school teachers.  There is not enough funding to operate the schools.

Philadelphia, like other shrinking cities, is caught in a lose-lose tax trap.  Lower taxes and attract more businesses and economic growth.  Raise taxes and risk setting in motion an exodus for the suburbs.  Both seem destine to produce lower tax revenues.   So what’s a Mayor suppose to do?

Funding for Philadelphia schools has become a game of what new gimmick will be used this year?  Borrowing has been the game of choice.  The funding method, however, changes each year.

Casinos were the first great hope.  Then came special funding from the 2009 stimulus (Federal to State to City).  Last year the City promised to get tough on deadbeat property owners and collect back taxes, and borrowed awaiting until it collected enough of the back taxes (and is still waiting).  To close the gap this time, the Mayor and City Counsel cannot agree on a path forward.  The Mayor wants to collect a special tax and Counsel wants to sell unused school district assets.  Both plans call for borrowing until the moneys come rolling in.  Hmmm.

The State could facilitate a funding solution but has demanded concessions from the Union as its price of admission.  Everybody could help, but nobody seems ready to really lead.

This is a sad picture even before recognizing that the Philadelphia School District’s education outcomes are not red hot.  Last year the city hired a new Superintendent expressly to improve educational outputs.  The Superintendent has, however, been mired in a funding debacle since he arrived.  What a waste of a valuable resource.

School finances are important.  In previous administrations budget control was unheard of.  Generous contracts were awarded teachers with no consideration given to educational output.  Charter Schools were the preferred path forward since Charter principals had much broader hiring/firing authority.  Interestingly, Philadelphia Charter Schools have on average produced no better outcomes than public schools.

As September 9th approaches and schools open, it looks like Philadelphia will borrow again.  It looks also like the loan payback will be forgotten but debt service will increase and crowd out other needs.

Who said Detroit was an abnormally?

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