Trying to figure out why Philadelphia's public schools have been teetering on insolvency the past few years is no easy task.
But let's start with some basic facts. The district, the eighth largest in the nation, is entirely dependent on three sources of money: Almost half of its $2.8 billion budget comes from the city. A little over a third comes from the state. Most of the rest comes from the federal government.
Matthew Stanski, the district's chief financial officer, likes to compare this money to an "allowance." He says, "We're given an allowance and we have to determine what to do with that allowance."
The problem, says Stanski, is that it's not nearly enough. Only 36 cents out of every dollar goes to kids and classrooms. A huge chunk of money — $727 million — goes to charter schools, which compete with traditional public schools for resources in Philadelphia. Health care costs take up another $117 million every year.
Finally, says Stanski, there's the teachers' pension fund. It takes another big bite out of the budget.
"Lets say you're an employee making $70,000 a year." says Stanski. "That's about a $14,000 payment to your pension fund. It's just not sustainable and yeah, it worries me tremendously."
Philadelphia's school superintendent, William Hite, says the math just doesn't add up. The district, he says, has seen "years of reductions of revenue, years of spending beyond what the district was taking in — not just over the last two years but for the past decade."
Marjorie Neff agrees. She's a former principal and one of five members of the School Reform Commission that took over the district in 2001 to stabilize its finances. Instead, the commission has lurched from one budget shortfall to the next.
It has had to shut down 31 schools and lay off thousands of teachers, reading coaches, librarians, nurses and counselors in the last two years.
The Latest Crisis
This school year, the district has been so short of cash, Neff says the commission had no choice but to cancel the contract with teachers to save money. As part of that action, the district will ask teachers to contribute to their own health insurance premiums.
"It was either take this action ... or face another year like last year," says Neff.
And, just like last year, teachers have taken to the streets. Jerry Jordan, the president of the Philadelphia Federation of Teachers, told thousands of teachers protesting in front of the school district offices that union members are simply not going to take it anymore.
"We will not allow them to accuse us of being greedy," he shouted into a bullhorn. "We sacrifice every day, buying paper. Buying books. Buying food for children."
Meanwhile, explaining all this to parents and kids has fallen on the city's school principals.
At Central High, one of Philadelphia's top performing schools, Principal Tim McKenna says his kids have been hit hard. In the last two years, the school has lost 12 teachers and five counselors. This fall, his parents have had to pay for paper the school could not afford.
"Parents come to me. Students come to me. They're upset with the level of service they've been getting," says McKenna.
Helen Gym has a son at Central High, and she has tried to organize parents across Philadelphia. She says parents are tired of all this.
Schools aren't just being starved, says Gym. The entire district has been turned into a costly experiment, especially with publically funded, privately run charter schools gobbling up a big part of the budget
"We're tired of charters, takeover schools, all this kind of stuff," she says. "It's reckless. Our young people don't need that. They need stability, security and they need financial investment."
Of course they do, says James Lytle, an expert on urban school reform at the University of Pennsylvania. But Lytle says it's unrealistic to think that the city, the state or the federal government are going to pour more money into Philadelphia's public schools any time soon.
"If you want high quality schooling, how do you go about providing it without spending a lot more cash? That's where charter schools have a real competitive advantage because they can target a lot more of their funding directly into classrooms," Lytle says.
Charters may or may not perform any better than traditional public schools, he says. But charter operators have successfully marketed themselves as more "cost effective" at a time when local and state lawmakers are loath to spend more on education, especially on traditional public schools that many view as wasteful and ineffective.
That's not something that kids, parents or teachers at Central High are used to hearing about their school. But it hasn't been spared from budget cuts.
At the beginning of the school year, math, English and Spanish classes had 50-70 kids. Principal McKenna has since been able to hire a couple more teachers and one more counselor.
But with a $71 million budget deficit looming over the district, he says everybody should brace themselves for another round of cuts next school year.
AUDIE CORNISH, HOST:
Philadelphia's public schools have lurched from one budget crisis to the next for years, and the district has run out of things to cut, add to this a decades-old fight with state lawmakers, who've balked at sending more money. NPR's Claudio Sanchez tells the story of how the nation's eighth-largest school district ended up teetering on the brink of insolvency.
CLAUDIO SANCHEZ, BYLINE: Let's start with the fact that Philadelphia's public schools rely entirely on three basic sources of money, money the district does not control - $2.8 billion from the city, the state and the federal government.
MATT STANSKI: I equate that as to an allowance, like, you know, we're given an allowance and then we have to determine what to do with that allowance.
SANCHEZ: That's Matt Stanski, the district's chief financial officer. Stanski says the numbers today just don't add up - the district's contribution to teachers' pension fund, for example. Four years ago, it was only 5 percent of salary. Today, it's a whopping 21 percent.
STANSKI: It's just not sustainable and, yeah, it worries me tremendously.
SANCHEZ: Then there's the $727 million the district is required to give to charter schools, which operate a lot like a parallel school system in Philadelphia - another huge bite - health insurance. The district has been paying for all of it, to the tune of $117 million a year - more on that in a minute. So here's what all this boils down to, says Superintendent William Hite.
WILLIAM HITE: Years of reductions of revenue, years of spending beyond what the district was taking in - not just over the last two years, but for the past decade.
MARJORIE NEFF: Yes, welcome to the School District of Philadelphia.
SANCHEZ: Marjorie Neff is a former principal and one of five members of the School Reform Commission that took over the district in 2001 to stabilize its finances, which by all accounts, has not happened. Desperate to save money, the commission canceled its contract with the teachers union, demanding that teachers contribute to their health insurance premiums. Neff says the commission had no choice.
NEFF: It was either take this action or face another year of conditions like last year.
SANCHEZ: And just like last year, teachers have taken to the streets to protest.
(SOUNDBITE OF PROTEST)
JERRY JORDAN: We're here to tell them that we're not taking it.
SANCHEZ: At a union rally in front of the school district offices recently, the message from Philadelphia Federation of Teachers President Jerry Jordan was clear.
(SOUNDBITE OF PROTEST)
JORDAN: We will not allow them to accuse us of being greedy.
SANCHEZ: Meanwhile, the task of explaining all this to parents, without sounding hopeless, has fallen on school principals at meetings like this one at Central High School.
TIM MCKENNA: Parents come to me, students come to me. They're upset with the level of service they've been getting.
SANCHEZ: Tim McKenna is the principal of Central High. He's lost 12 teachers and five guidance counselors since 2012. He's had no money for new textbooks, and parents are having to buy paper for the school.
MCKENNA: Our Home and School Association just bought the school a pallet of paper - 40 cases of paper - that's going to keep us going into January and February.
SANCHEZ: Helen Gym has a son at Central High and has worked to organize parents across Philadelphia. She says publicly funded, privately run charter schools have reaped the greatest havoc on the budget.
HELEN GYM: You know, we're tired of charters. We're tired of takeover schools, all this kind of stuff. It's reckless. Our young people don't need that. They need stability. They need security. They need financial investments.
SANCHEZ: Of course they do, says James Lytle, an expert on urban school reform at the University of Pennsylvania. But he says it's unrealistic to think that the city, the state or the federal government are going to give schools more money anytime soon.
JAMES LYTLE: So if you want high quality schooling, how do you go about providing it without spending a lot more cash on it? And that's where charter schools have a real competitive advantage because they can target a lot more of their funding directly into classrooms.
SANCHEZ: Charters may or may not be performing better than traditional public schools, says Lytle, but they've successfully marketed themselves as more cost-effective at a time when local and state lawmakers are loathed to spend more money on education, especially on traditional public schools that many view as wasteful and ineffective. That's not something kids, parents or teachers at Central High are used to hearing. It's one of the top performing schools in Pennsylvania.
UNIDENTIFIED WOMAN: Tomorrow, come prepared with pencils and your calculators.
SANCHEZ: Today, kids are prepping for tests.
UNIDENTIFIED PEP SQUAD: (Chanting) And you know we've got soul.
SANCHEZ: The pep squad is doing its thing, and in room 245, clubs are meeting with their advisor, history teacher Karen Schromsky, to talk about - what else? - money.
KAREN SCHROMSKY: Guys, I know you want to make money for your clubs to run and so on and so forth, but you're selling things that you're not allowed to sell. I do not want to see Dunkin' Donuts.
SANCHEZ: Student clubs don't get a dime from the district, but Kamal Carter, 16, a member of the robotics team, says losing a dozen teachers because the district has no money is crazy. Classes have never been bigger.
KAMAL CARTER: Seventy kids in math class. So, like, most of the students were standing up during the lectures. I think it's algebra one.
SANCHEZ: English and Spanish classes at the beginning of the year also had 50 to 60 kids. Last week, Central High was able to replace a couple of teachers and hire another counselor. But with a projected 71-million-dollar deficit, the district and Philadelphians across the city are already bracing themselves for yet another round of cuts next school year. Claudio Sanchez, NPR News. Transcript provided by NPR, Copyright NPR.