Philly's Tough Lessons

Roy McKinney, principal of Philadelphia's Barratt Middle School, pushes his teachers to look past their crumbling inner-city building, ripped textbooks and nearly empty art rooms. He tells them to work whatever magic they can--class by class, student by student. But this spring, when Edison Schools signed on to run Barratt and 19 other low-performing schools, McKinney thought he might finally have resources to make a difference in the lives of his 800 students. Over the summer, Edison, the nation's largest for-profit school manager, filled Barratt with hope in the form of new books, computers, tennis racquets, lab goggles, art supplies and even tambourines and drums to replace the single broken keyboard in the music room.

And then, suddenly, it all fell apart. Edison's stock plummeted as Boston and Dallas schools ended their contracts with the financially troubled company. A few days --before school opened in September, while Edison and school officials fought over how much money per pupil Edison would get, the company sent two tractor-trailers to haul away all the new equipment--except some books and a handful of computers. "It was very painful," says McKinney, a dignified man who has become a hero in the school's run-down neighborhood. "There is so much we need for the students. Now we'll just have to think of another way to help them."

McKinney is not the only Philadelphia educator feeling battered these days. What was supposed to be the nation's most extensive test of school privatization has devolved into a battle of philosophies pitting Edison's ebullient founder, Christopher Whittle, against Philadelphia's equally assertive schools chief, Paul Vallas, who earned a national reputation as the head of Chicago's schools in the 1990s and came to Philadelphia in July. For nearly a decade, Whittle has been the nation's most vocal evangelist for running schools like corporations and measuring their success by the bottom line. He's also known for his high-flying lifestyle, which includes a mansion in the Hamptons that he recently put on the market for $46 million. Vallas, on the other hand, made his mark as a tough administrator who imposed fiscal controls on Chicago schools. Both say their only goal is to help the city's 200,000 mostly poor and black public-school students, whose test scores are well below the state's average. And no one wants the students to succeed more than parents like Gladys McDaniel, who walks her second grader to school past drug dealers and boarded-up warehouses. She worries about disrupting already troubled schools. "I have one question that's never been answered," she says. "What will happen if this experiment fails?"

It seemed a lot simpler a year ago, when supporters of privatization envisioned Philadelphia as a role model for other urban districts. Most big-city schools lag far behind their suburban counterparts in test scores, resources and class size. "They still have less money compared to the suburbs," says Arthur Levine, president of Columbia University's Teachers College. "We're talking about reform without the resources to make it occur. It's a Herculean task."

Some districts have made headway--largely because of innovative leadership. "I've been doing this for 25 years, and I don't recall a time when people were working harder, smarter and with more determination to improve these schools," says Michael Casserly, executive director of the Council of the Great City Schools, a national group. In Chicago, Vallas pushed accountability and cut social promotion. When Education Secretary Rod Paige ran Houston's schools, he standardized the curriculum so that kids who move a lot--a big problem in city schools--could progress no matter where they were. In San Diego, Anthony Alvarado, the chancellor of instruction, trains teachers to get the best work out of kids from poor families.

But the idea behind the reforms in Philadelphia is more radical than any of these. Outside managers would have a free-market incentive to succeed: if test scores didn't go up, they would lose their contracts. Last winter, Gov. Mark Schweiker pushed through a state takeover of the city's 45 worst-performing schools and replaced the city's school board with a five-member School Reform Commission appointed by the city and the state. Under the original plan, Edison would manage all 45, and also receive a multimillion-dollar fee to serve as a consultant.

Almost immediately, angry parents, teachers and students organized noisy protests against Edison. They cited the company's spotty academic record (often no better than that of similar public schools) and uncertain finances (the 10-year-old company has lost more than $300 million and has never shown a profit). In the spring, under intense political pressure, the School Reform Commission cut Edison's share to only 20 schools. New outside managers were hastily recruited, including two much smaller for-profit companies, Victory Schools and Chancellor Beacon Academies, and nonprofit organizations like Temple University, the University of Pennsylvania and Foundations, Inc., a provider of after-school programs.

Losing such a big chunk of the Philadelphia contract hurt Edison. By the time Vallas got the schools-chief job in Philadelphia, the stock had plunged from more than $21 a share earlier this year to well below $1. The company now faces delisting by NASDAQ if the price doesn't rise. That would be another serious blow, according to analysts who follow Edison. "It would be off most institutional investors' radar screens even more than it is now," says Jeff Silber, an education-industry analyst at Gerard Klauer Mattison. But despite all the bad news, Whittle remains determinedly optimistic. "This is a company that has weathered gyrations," he says. "Virtually all the critical indicators are working in the right direction. We would not have been able to ride out various storms if that was not the case." He predicts that Edison will finally show a profit in the current fiscal year because the company is streamlining administration. Even Silber says it's too soon to write off Edison. "The death of Edison and the death of Chris Whittle has been predicted many times," he says. "I never count him out."

But schools chief Vallas isn't banking on Edison and has taken precautionary measures to protect the schools. "We're well prepared if they don't survive," he says. He has withheld $4 million in payments to Edison and says he won't hand over the money without an updated financial statement and other assurances that his schools' supplies won't be used as collateral if Edison needs further loans. In the meantime, he's working on reforms that reflect his own educational philosophy, like shutting down middle schools and creating K-8 schools and renovating decrepit buildings--one of his major legacies in Chicago. He also says he'll nurture strong principals. "In large urban school districts," he says, "the model is only as good as the leadership in the school."

While Edison garners the headlines, the schools run by the other outside managers are just trying to settle into some kind of routine. Jan Nicholas, a second-grade teacher at Fulton Elementary School in Philadelphia's Germantown section, knows her school needed a boost. "We have kids that come from shelters, who have no homes, kids who have chaotic home lives," she says. When Foundations took over, she liked some of its ideas, such as mentoring. And so far there have been a few positive signs. Her class size was cut from 30 to 18, and she received new teaching materials for math and phonics. But she lost her teaching assistant, and her kids still have difficulty just sitting still long enough to learn. "They seem as challenging as my 30 did last year," she says.

But parent Gladys McDaniel is growing increasingly hopeful. Her son Christopher's North Philadelphia elementary school is one of five taken over by Victory Schools. The turnaround, she says, has been "amazing." There's a new writing program and a reading curriculum that emphasizes phonics. The school day seems much more orderly, and the kids are excited. "When a child is given a way to succeed," she says, "they are suddenly happy to go to school and learn. All they need is the right support." That's a lesson for any city.