Harrisburg schools saddled with debt and growing exodus to charter schools, says Veno

"It's time we called on corporate leaders in this community to invest in this community." - Gene Veno

HARRISBURG ? Two trends threaten Harrisburg School District's future financial success, said state-appointed chief recovery officer Gene Veno: increasing payments for past debt and a growing exodus of students to charter schools.

Veno presented an overview of the district's situation ? as he sees it ? during a public meeting Tuesday night, Jan. 29.

Only about 30 people attending the meeting, including school board members, presenters and the media, but Veno said, "It's not about the attendance; it's about the message."

That message was summarized in a brief history and two slides.

Veno explained that even though the school district closed five schools and furloughed one-third of its staff ? more than 500 people ? last year, this year's budget is still nearly 7 percent higher than before the cuts, and the the district is facing a budget deficit of $11.7 million.

Then he showed the slides.

Debt service payments this year are $15.3 million and expected to rise to $21.4 million during the next four years.

That's a structural problem that is neither the fault of the current school board nor easy to fix, said Veno.

The next slide showed a growing exodus of students ? more than 2,000 ? to charter schools during the past five years.

This year, Veno said, payments to charter schools cost $8.4 million.

And charter schools in this area, he noted, are just ramping up.

"I do not speak for or against charter schools," said Veno, but the reality in Harrisburg next year is $14.7 million "will go right off the budget" because of them.

That's a structural problem that can be fixed, he said, by improving the school district's image and performance.

Veno noted that the most recent standardized test results showed 38 percent of Harrisburg students are below basic in math, and 42 percent were below basic in reading.

Only 45 percent of students graduated last year.

To help the school district address its performance and come up with strategies to improve curriculum and teaching, Veno brought in former Secretary of Education Francis V. Barnes.

To help sort out finances and develop a funding strategy, he brought in financial experts from PFM. Among their responsibilities will be to conduct a forensic audit of the district's historic finances to find out exactly why things "aren't adding up" even after the cuts from last year.

"You can only cut so much," he said.

Veno has floated a 2.5 percent tax increase for the next school year, but even that will come nowhere near to plugging the budget hole. Nor will using the district's roughly $4 million fund balance, he said.

But simply raising taxes each year to fix that year's problem cannot continue to be the only solution.

"That has to stop," he said.

Another avenue, he said, would be going to the city's tax-exempt nonprofits and corporate leaders.

"It's time we called on corporate leaders in this community to invest in this community," Veno said. "Everyone in the community is accountable for the success" of Harrisburg School.

"I'm not here to sell a plan," Veno said. "We don't have one done yet."

But he pledged that as his team moved forward they would be thinking "outside the box, on top of the box, nowhere near the box."

Source: http://www.pennlive.com/midstate/index.ssf/2013/01/harrisburg_schools_saddled_wit.html

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