The Philadelphia experiment: the story behind the Philadelphia school district's unprecedented move to turn 20 schools over to for-profit operator Edison Schools - Feature

Education Next, Wntr, 2003 by Jay Mathews

GWENCAROL HOLMES, A TALL, SLENDER KANSAN, suppressed a smile whenever angry Philadelphians attacked the track record of her company, Edison Schools. Edison, the New York--based for-profit school management firm, was seen by many in the nation's seventh-largest city as a greedy, slick huckster. Edison's opponents cited the company's failures, such as the two schools Edison had to give up in Holmes's hometown of Wichita.

If Edison failed in Wichita, the critics said, it had no chance in a metropolis like Philly. And so Holmes would have to explain again that she was the principal whose school, Colvin Elementary, had outperformed those two Edison schools in Wichita. But she had succeeded because she was using Edison's methods and because the competition from Edison enabled her to squeeze more resources out of the central office. She was so transformed by the experience that she joined the enemy.

The Wichita school board had resented the idea that it needed an outside company--from NuYawk, no less--to save its worst schools. To assuage its pride, it assigned one of its best principals-- Holmes--to run a school that would use Edison methods and show everybody that the locals were just as good as any bunch of out-of-towners (contradictory as that may sound). The fact that Holmes, the symbol of local resistance, switched to preaching for a tested national approach gives hope to many educators who think private enterprises with track records have a place in the solution of the nation's worst education problems.

The stakes and the risks for Edison are, of course, far greater in Philadelphia than they were in Wichita. The company's $11.8 million contract to run 20 of the city's worst-performing schools is the largest challenge Edison has ever had in one metropolis. As such, it has the potential to become a referendum not just on Edison but also on privatization as a reform strategy. Moreover, Edison has been hobbled by both the terms of the Philadelphia contract and a run of financial and legal problems. The firm was not assigned the 20 schools it was to manage until April 2002, four months before the new school year, giving it little time to install its program and train school personnel. By then the company's stock price had plummeted (see Figure 1) and it was unclear how much longer Edison could survive without turning a profit. It secured a new round of financing, but on terms highly unfavorable to the company.

The arrival of a new superintendent, former Chicago schools CEO Paul G. Vallas, has made the situation even cloudier, Vallas's insistence on strict accountability and regular testing of all schools fits the Edison model well, but one never knows what will happen when new leadership tries to make its imprint on a school district. Consider this then, whatever Edison's fate, to be a case study of an effort to bring a relatively new and data-based education product to a very old and tired city, an experiment that is taking place in one form or another in nearly every large school district in the country.

At Ridge's Invitation

More than 200,000 students attend the Philadelphia city schools, fewer than 20 percent of them non-Hispanic whites, 78 percent of them from families poor enough to qualify for federally subsidized school lunches. Just before Edison arrived in Philadelphia, the city government had tried to sue the state for more school funding. Mayor John F. Street eventually agreed to put aside the suit in return for negotiations between the city and the state, the state demanding reforms and the city in turn asking for more money to pay for them.

Street, an African-American lawyer who once taught at a city elementary school, is a veteran of Philadelphia's racially tinged politics. Mayor Frank Rizzo was a lightning rod for racial tension in the 1980s. To the present day, politics in Philadelphia still tends to focus on issues of black and white more than in other cities--cities like New York and Los Angeles, where the massive inflow of Latino and Asian immigrants has created a more diverse political scene, But Street was a practical man, willing to overlook old battles if he could persuade the state to help and to defuse the feeling among many African-Americans in Philadelphia that the white power structure in Harrisburg was underfunding and discriminating against their schools.

His negotiations on the funding issue were with Pennsylvania governor Tom Ridge, a popular Republican who had beaten his Democratic opponent almost two to one in 1998. Ridge grew up in Erie and had been an infantryman in Vietnam, As governor, he proposed a voucher program for public school parents whose children were stuck in bad schools. His proposal won the support of some black Philadelphia legislators, but he could not overcome the resistance of the mainly Republican suburbs. Ridge did manage to persuade Street to sign a memorandum of understanding in July 2001 that gave him permission to order an analysis of the financial and educational condition of the school district. The state resisted giving the schools more funds when many observers thought the district was grossly mismanaging its finances and operations. It wanted some kind of assurance, backed by independent research, that any new money would be spent more effectively. Enter Edison Schools.