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Privatizing Schools: The Philadelphia Experiment


PHILADELPHIA — Kenny Gamble spent the 1960s and '70s spinning out silky rhythm-and-blues hits as a chart-topping songwriter and producer. Lately he's been trying to chart a new direction for his boyhood neighborhood in South Philadelphia. On streets pockmarked with decay, his Universal Cos. has built homes, developed new shops and sponsored job training. Progress has often been grudging, but the group has gained enough of a foothold to dramatically raise its sights: It is hoping to construct 2,000 homes in the next half decade.

The crime rate, the local job market and willingness of banks to invest in a troubled neighborhood will help determine whether the group can even approach that goal. But ask Gamble to isolate the key factor in success and his answer is unequivocal: Fix the local public schools. "You have to straighten out the education in order to get people to purchase homes in this area," he says.

Gamble has his finger on a central challenge to the fledging renaissance of urban America. With crime down and unemployment still modest, poorly performing public schools now may be the biggest factor driving out upwardly mobile working families from big cities. It probably won't ever be possible to stabilize struggling urban neighborhoods if parents flee for better suburban schools as soon as they can set aside enough money for the U-Haul.

Recognizing that is easy. The hard part is improving urban schools enough so parents with an option want to stay. Nowhere is the need for improvement greater than in Philadelphia. And now, under a sweeping plan approved this month by a state panel, nowhere are school officials pursuing a bolder, or riskier, reform strategy. Amid a firestorm of local controversy, the city is becoming the test case of whether it's possible to significantly improve public schools by placing them under the control of new managers--including neighborhood groups like Gamble's and private, for-profit companies.

To put it mildly, city officials didn't volunteer for this test. But, after the Philadelphia schools suffered persistent budget shortfalls, the state seized them last year and invested control in a new School Reform Commission. Republican Gov. Mark Schweiker appointed three of the commission's five members; Philadelphia's Democratic Mayor John Street named the other two.

This month, the new commission voted, precisely along those 3-2 lines, to undertake the nation's largest experiment in the privatization of public schools. The commission placed 42 of the city's most poorly performing 264 public schools under the control of six outside managers, starting next September. Gamble's Universal Cos. will take control of two neighborhood schools. Edison Schools, the largest private company operating public schools, was given 20, more than double the number it operates in other cities.

Even then, the commission wasn't through. It restructured the management of an additional 28 schools. Some will become independent and charter schools largely free from district control, while the rest will turn over their entire staffs in a process known as "reconstitution." No city this big has ever revamped so many of its schools at once.

James Nevels, an African American businessman who Schweiker appointed to chair the commission, calls these "serious measures" for a system in "serious trouble." Like other urban school districts, Philadelphia has its islands of excellence. Thousands of teachers, principals and counselors provide caring support for students every day. But as a system, the Philadelphia schools are failing. The dropout rate is high and achievement is low--more than half of the students are scoring below basic levels of competence on state reading and math tests.

The school commission's response is built on the same logic as the education reform legislation President Bush steered through Congress last year: It trades greater flexibility for tougher accountability. While the new managers of Philadelphia schools will operate with increased freedom from the central school district, they will also face demanding performance standards; under the plan, they can lose their contract for any school where a majority of students fails to reach the average score on state tests after three years. Charles Zogby, the state education secretary, says the goal is "to introduce a more market-based reform into public education . . . where you have a diverse set of providers . . . but everybody is under the same accountability measures."

Such logic hasn't diminished resistance to the changes from the local teacher union and some civil rights groups. Edison, which operates 136 public schools in 53 cities, has been the flash point, with critics denouncing the idea of a private firm profiting from public education. Yet, as Gamble notes, people have always made money by working for public schools or providing them services. "The right question is whether those people are doing a good job."

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