Abandoning Pennsylvanians

Governor Tom Corbett unveiled a 2012-13 state budget Tuesday that abandons middle-class Pennsylvanians and our most vulnerable citizens.

The Pennsylvania Budget and Policy Center has a full analysis of the Governor's proposal. Here's the quick version.

With this budget, the Governor continues to turn his back on middle-class families who rely on good schools and affordable college tuition.

Help for the most vulnerable Pennsylvanians is reduced or eliminated. Tens of thousands of families and children have already seen health and other services terminated. This approach is not about finding efficiencies or cutting waste but rather cutting off help to people who have been hit hardest by the recession.

And while there is a call for greater accountability for every dollar in spending, businesses are let off the hook based on claims that they will create jobs in exchange for tax cuts that now total more than $1 billion.

This is not the path to a stronger economy or a better Pennsylvania.

We'll have more to say in the weeks ahead. For now, you can learn more by reading our analysis.

Governor's Budget Moves PA in Wrong Direction

Governor Tom Corbett delivered his 2012-13 budget address to a joint session of the state Legislature today. We are still working on our budget analysis at the Pennsylvania Budget and Policy Center. Check our web site later Tuesday evening.

In the meantime, check out Sharon Ward's op-ed below on the Governor's budget originally published in the Allentown Morning Call.

Imagine Greatness

In the latest article I have read concerning the School District of Philadelphia, Michael Masch and Leroy Nunnery stand at a podium labeled Imagine Greatness.
We are still wondering when the imagination stops and the reality begins.
In the 1970s Robert Edmonds ( a mentor of Dr. Ackerman) stated that we knew all we needed to in order to teach all those we choose to teach. His statement was half correct. We have learned much since then, such as how poverty affects academic preparation.
But still his truth remains. There are many whom we choose not to teach.
David Hornbeck accused Harrisburg of racism. He was scorned for this by many in Philadelphia. He created an antagonistic attitude between Philly and the state. Ultimately this antangonism led to a state takeover of our schools. This takeover has been unsuccessful in managing our schools. The plan now is to drive our schools into financial failure, claim the schools don't work becaus of bad teachers, replace the teachers, and eliminate unions. The children of poverty have become pawns in the Republican Platform to accomplish this. We've already seen this in Wisconson, Ohio, and now Indiana. How can any party put its agenda ahead of our nation's welfare?
It remains truly sad that the Obama Administration is helpless to fight this, and even in Philly, our local leaders have been reticent to speak the truth, lest like Hornbeck, they are publicly scathed and become politically obsolete.
The grass roots movement is now the only thing that replace imagination with greatness.

One Year and Still Going Strong

Third and State celebrated its one-year anniversary this week. We launched on February 1, 2011, and 350 posts later we're still going strong.

We couldn't do it without our readers, so we thought it would be fun to take a look back at what posts you liked the most. And so we bring you a countdown of the top 10 most viewed blog posts at Third and State.

10. Governor Corbett Unveils 2011-12 Budget Proposal, March 9, 2011:

By taking direct aim at schools and higher education, the Governor’s plan disregards a fundamental principle of economic growth — businesses locate and expand in states with an educated workforce and academic centers of innovation.

There is a better choice. Lawmakers can choose to take a more balanced approach that makes targeted cuts, improves accountability and raises revenue.

9. 2011-12 State Budget Highlights, June 28, 2011:

State legislative leaders and Governor Tom Corbett agreed on a 2011-12 state budget deal this week, and on Tuesday, the state Senate approved it on a 30-20 party-line vote. The bill heads to the House of Representatives next. ...

The biggest cuts, in both dollars and percentages, are in education programs, including PreK-12 and higher education.

8. Marcellus Shale, Unemployment and Industrial Diversity, August 3, 2011:

Must Reads: State of The Union, Stimulus and Austerity Economics PA Style

A blog post by Mark Price, originally published at Third and State.

Tonight President Obama will deliver his State of the Union Address to Congress. We are expecting the President to recommend an extension through the end of 2012 of extended unemployment insurance benefits and the payroll tax credit. It looks as though a major theme in the address — besides the catch phrase “built to last” — will be conventional policies aimed at reducing inequality, such as increased spending/tax credits for education and training.

Education and training are important and fruitful means of reducing inequality, but they fall well short of what's needed to reduce the degree of inequality we now face.  A more forceful step in the direction of reducing inequality would include raising the minimum wage and making it easier for workers to form and join unions. We don't expect to hear the President call for either of those changes.

The President will propose paying for his new initiatives with higher taxes on wealthy households. As with education and training, restoring some sense of fairness to the tax code is a laudable goal but longer-lasting reductions in inequality will only come from policies that allow the pre-tax wages of more Americans to rise as the size and wealth of our economy grows.

Manufacturing, energy, job training and middle-class growth will be the cornerstones of President Barack Obama's speech tonight as he takes to the nation's grandest political stage for the annual address on the state of the union, according to senior advisers.

Bank Swap Deals Cost Philadelphia City, School District

Large financial institutions, including many that received financial bailouts in the wake of the financial crisis, are making hundreds of millions of dollars off interest rate swaps negotiated with the City and School District of Philadelphia.

That's the key finding in a new report from the Pennsylvania Budget and Policy Center. We found that swap deals negotiated with banks such as Wells Fargo, Morgan Stanley and Goldman Sachs have cost the city and school district $331 million in net interest payments and cancellation fees. If interest rates continue to remain low, still-active swaps could cost the city another $240 million in future net interest payments.

WHYY's NewsWorks was there and posted this brief video clip.

Our report recommends that banks refund a portion of the cancellation fees they received for terminating bad deals and renegotiate those deals which are currently active.

Financial institutions have returned to profitability after the financial crisis, yet some Philadelphia schools cannot afford to keep nurses on staff. Now the banks have an opportunity to step up and help prevent more damaging cuts to schools and public safety, just as taxpayers helped the banks avoid total collapse just a few years ago.

Some other news outlets covered our release of the report yesterday. Check out the coverage.

New Year, Same Old Economic Austerity

A blog post by Mark Price, originally published at Third and State.

From November 2009 to November 2010, Pennsylvania added 63,300 jobs. From November 2010 to November 2011, the state added just 51,000.

Wait, isn't that backwards? Nope. A weak economy, the end of federal Recovery Act funds and state budget cuts slowed the pace of Pennsylvania job growth in the most recent year.

The big question mark going forward is whether the pace of job growth in the Commonwealth will continue to lag the rest of the country. Key will be whether school districts continue to face large budget deficits.

The news out of Stroudsburg this morning suggests this is going to be another challenging year for the Pennsylvania job market.

Larger class sizes, staff reductions, eliminating elective courses for students or a wage concession are possible remedies to close a projected $9.8 million deficit in the Stroudsburg Area School District budget, said Business Manager Don Jennings.

As school districts continue to add people to the unemployment lines, the Corbett administration is looking to make the situation that much worse by adding costly new regulations to address a problem that doesn't exist. 

Déjà vu All Over Again: Mid-year Cuts and a Budget Shortfall on Tap for 2012

A blog post by Sharon Ward, originally published at Third and State.

Governor Tom Corbett will announce a new budgetary freeze before the end of the year to help resolve what the administration expects to be a $500 million revenue shortfall, according to Budget Secretary Charles Zogby, who gave the annual mid-year budget briefing on Tuesday.

Secretary Zogby painted a grim picture, as expected. The current revenue shortfall of $345 million could grow even beyond the $500 million current estimate, according to Zogby, and growth in mandatory spending for pensions, debt service and the Department of Public Welfare (DPW) will contribute to a budget for 2012-13 that is short about $750 million.

The Commonwealth plans to resolve the revenue gap with additional cuts. The secretary did not anticipate having "any revenue options" on the table and said he would look for further cuts in "waste, fraud and abuse" in DPW, controlling growth in corrections spending, and scaling back capital spending to make up the difference.

He did acknowledge that the Governor would rather reduce prisons than schools or higher ed and that making cuts was not something the administration relishes — suggesting that the work advocates have done this year may be penetrating.

In a nutshell, the persistently anemic economy is hurting tax collections, and growth in 2012 will be lower than previously estimated, making the 2012-13 budget more difficult than one would expect coming out of a recession.

Secretary Zogby rightly identified areas of built-in growth that will contribute to a structural budget deficit moving forward.

Welcome Michelle Rhee Philly Style

We know now that rating teachers on standardized testing and rewarding principals for high test scores leads to cheating. In Washington D.C. where Michelle Rhee was superintendent, cheating was suspected in 103 of Washington D.C.’s 168 schools (Goldstein, 2011). According to Goldstein (2011), Rhee, when alerted to the possible cheating scandal chose to ignore it. Rhee eventually absolved every school suspected of cheating (Goldstein, 2011). In Atlanta 140 teachers and 38 principals affecting at minimum 44 schools were caught cheating on standardized tests (Severson, 2011). In Philadelphia 89 schools were suspected of cheating and officials are alleged to have covered up this scandal ("Philadelphia Schools Caught Cheating ion Tests," 2011, Did State Officials Bury Cheating Report, 2011?). In Pennsylvania overall 200 schools were suspected of cheating on the 2009 state standardized exams (Did State Officials Bury Cheating Report, 2011?).
It is truly repugnant how Rhee flouted the truth in pursuit of her own individual glory. Urban superstars have become the new rock stars and we have seen the superintendent replace the student as being the centerpiece of education. As long as this remains the case education will suffer.
I hope the good citizens of Philadelphia turn out to protest this false messiah. If you are interested in doing so please email me at and I will put you in touch with those who are trying to organize a the type of welcome Michelle Rhee truly deserves.

Goldstein, D. (Ed.) (2011, March 28). Michelle Rhee’s cheating scandal. The Daily Beast. Retrieved from

Herold, B. (July 11, 2011) Did state officials bury 2009 cheating report. Public School Notebook

Jobs Down, College Tuition Up, School District Taxes Up and Policy Makers Are Focused On What?

A blog post by Mark Price, originally published at Third and State.

Other recent Morning Must Reads from Third and State:

Monday: No Revenue for Public Transportation & Corporations Need Another Tax Loophole for their Jets

Tuesday: Mo Gas, Mo Problems

On Tuesday, the Keystone Research Center published a summary of the employment situation in Pennsylvania. With the release of September's jobs data, which included a loss of just over 15,000 jobs, a picture is emerging of a job market in Pennsylvania that is shrinking. The continued loss of public-sector jobs and relatively slow growth in private-sector jobs is the main source of weakness in the labor market. The bottom line is that although Pennsylvania ranked in the top 10 of states in terms of job growth early in this recovery, the Commonwealth has moved to the bottom 10 in the last five months.

Much of the public-sector job loss is driven by the fact that tax revenue has yet to fully recover from the recession, the end of federal Recovery Act funding, and state lawmakers' unwillingness to raise state revenues which has deepened state budget cuts.

Tonight: Meet Occupy Philadelphia's Steve Ross, Green Sheriff Candidate Cheri Honkola (and watch the Phils) @ PFC Meetup

On the eve of tomorrow's protest, meet Occupy Philadelphia's Steve Ross, who is coordinating communications for the event, and also meet internationally famous activist for the poor/Green Party sheriff candidate Cheri Honkola, along with some other great local activists, at Philly For Change Meetup tonight.

Occupy Philadelphia takes City Hall at 9:00 am Thursday as part of the international movement protesting corporate greed and the financial exploitation of 99% of the population. Steve will answer questions about the occupation and about future sites for marches and protest as the movement in Philly evolves. This is all happening right now, so it's very very exciting. You won't want to miss a chance to come out and meet Steve and be part of this moment in history.

Cheri Honkala is running for sheriff in an effort to end sheriff sales and keep families in their homes. Can she do it? Come out tonight and decide for yourself. Democratic candidate (and North Philly State Representative) Jewell Williams also has been invited.

If that's not enough, Education Voters' Ian Moran gives us an important update on the effort to replace the School Reform Commission and the onslaught of vouchers bills in Harrisburg, and local star organizer Pedro Rodriguez updates us on the movement to save Social Security.

And there's a new campaign in town: Food and Water Watch's Emily Heffling explains their Fair Farm Bill campaign.

Finally, if you're afraid of missing Roy Oswalt's attempt to pitch the Phils into the League Championship Series, there will be a television behind the bar, and across the street at Bob and Barbara's. Get to Meetup early and you can order dinner from Tritone's kitchen, as well.

Philly For Change Meetup is tonight, October 5, starting at 7:00, at Tritone, 1508 South Street. It is wheelchair accessible.


High Unemployment Leads to More Student Loan Defaults

A blog post by Sean Brandon, originally published at Third and State.

The U.S. Department of Education recently released 2009 fiscal year data on the number of students defaulting on college loans. In a press release, the Department noted that the national default rate rose from 7% in 2008 to 8.8% in 2009, affecting loans for all types of colleges and universities. The default rate rose from 6% to 7.2% on loans for students at public institutions, 4% to 4.6% at private institutions, and 11.6% to 15% at for-profit institutions.

Among the states, Pennsylvania has the third highest number of higher learning institutions (behind California and New York) and a student default rate of only 6.6%, which is considerably better than the national rate. However, Pennsylvania is no exception when you compare the relationship between the unemployment rate and the borrower default rate.

Earlier this month, Rortybomb blogger Mike Konczal compared the default numbers of subprime mortgages with for-profit college loans. In his analysis, he drew attention to the relationship between unemployment and default rates.

The Keystone Research Center recreated one of Mike's graphs below. It is quite clear that as unemployment rises, the number of students defaulting on their loan payments also goes up. Pennsylvania is the label highlighted in red. 

School’s Open but There’s Less Funding for Kids

A blog post from Chris Lilienthal, originally published at Third and State.

Kids are back in school across Pennsylvania and the nation, but many of them are likely seeing the fallout from education funding cuts.

Pennsylvania ranked among the top 10 states to cut school funding this year, according to a recent analysis by the Center on Budget and Policy Priorities. The Center found that 21 of 24 states for which data are available (including Pennsylvania) are providing less funding per student to elementary and high schools than last year (after adjusting for inflation). These states account for about two-thirds of the nation’s school-age population.

Pennsylvania ranked sixth among the 24 states, with an 8.8% cut in per-student, inflation adjusted spending. Only Illinois, Texas, Wisconsin, California and Ohio cut school funding more.

Overall, Pennsylvania is doing better than many of the other states, where funding cuts this year come on top of other cuts in state K-12 funding since the recession hit. As the Center’s Phil Oliff wrote:

As a result, 17 of the 24 states studied are providing less funding per student than they did in 2008. (See second graph.) In ten of these states, funding is down more than 10 percent since 2008, and in South Carolina, Arizona, and California, it is down more than 20 percent.

These cuts have serious consequences for students and the broader economy. They slow the economic recovery, hurt education reform efforts, damage the nation’s long-term competitiveness and leave school districts with few choices for restoring the lost state aid.

It all comes down to a question of priorities, as Oliff wrote:

While the state funding cuts partly reflect the economic downturn, which has depressed state revenues and raised the demand for public services, they also reflect choices by state and federal policymakers.  Most states took a cuts-only approach to closing their budget shortfalls for the current fiscal year, rather than using a more balanced mix of cuts and additional revenues.  And the federal government has failed to extend the emergency education aid it gave states earlier in the downturn, which played a crucial role in limiting the funding cuts to schools across the country.

Ending the Celebrity CEO Role of Schools Chief

Good riddance to Arlene Ackerman. If there was one thing that was totally bizarre about Ackerman's last stand, it was that she kept making bizarre statements that she refused to "play politics," with bizarro quotes like:

Is it a crime to stand for children rather than stooping down into the political sandbox for a politician's campaign victory?


I've been criticized for not being a politician," Ackerman said. "I am unapologetic about [not] making deals that hurt our children.

Uh... Up down, black white, dogs cats. You get the picture.

On her way out, Ackerman lobbed a few bombs in the direction of Dwight Evans and Michael Nutter. As a result, both Nutter and Evans have serious questions to answer about Ackerman’s allegations. But, the idea that Ackerman would not “play politics” is one of those 21st century, cognitive dissonance moments, up there with death panels and the like.

Remember Heidi Ramirez? She was the former member of the School Reform Commission who actually asked real questions of Ackerman at SRC meetings, and actually listened to parents and community members as they testified. She was forced out, and it was an open secret that Ackerman had elected officials helping to do the deed, insinuating that Ramirez didn’t care or understand the problems of African-American kids, and that her oversight (you know, her job) was part of a personal attack against Ackerman. So, out went Ramirez, and any semblance of oversight.

David Simon could not have written a story line about Arlene Ackerman. It would have been seen as a little too cynical and unrealistic. How could someone actually make up this departure? It was like watching a car crash. In slow motion. For two months straight.

Again, it was an open secret that Ackerman was leaving- the only question was how much money that they would pay her to go away. And, so, what did the “unpolitical” Ackerman do? In what appeared to be a clear attempt to leverage a higher buyout, she watched as the city was again set aflame among our old racial lines. (And, OK, she might have done a lot more than just watch.) You cannot get more craven than a politician who knows that she is leaving, pretending otherwise and turning Philadelphians on each other, all for an extra plate of gold or two on her garish, over-sized parachute.

So, good riddance, Arlene Ackerman. Don’t spend all of our money in one place.

As we go forward, I strongly hope that we realize that we desperately need to step away from the celebrity CEO model of school governance. The celebrity CEO culture, an infection that spread from Wall Street to the classrooms of our city, has done nothing but enrich a couple of people, while we are left to pick up the pieces.

So, no thank you, Joel Klein. Rubert Murdoch needs you more than we do. And, Michelle Rhee, if you hear the phone ring, its not us. Actually, we would probably go straight to voicemail, given that USA Today keeps calling to ask those pesky questions that you refuse to answer about systemic cheating in DC.

One person is not going to fix our school system. We need a committed oversight board, elected or not, to do its job. And we need someone- anyone- to identify what is Philadelphia’s philosophy and vision with respect to our public schools. When we have oversight, and a vision of what we want, then we should hire a skilled educator and community leader to fill the role of Superintendent.

Helen said the following, in her post a few weeks ago (The fittingly titled "Ackerman’s Last Days"):

If there’s one lesson we should remember about education reform, it’s that it relies less on numbers, data and yes even money, than it does on the delicate fabric of community and social trust. These relationships determine the sustainability and engagement of a whole society’s efforts to educate our children.

The goes for more than firing Ackerman, of course. It should be front and center as we choose another leader of our schools.

State Cuts to Education, Health Care Will Slow Recovery

A blog post from Christopher Lilienthal, originally published on Third and State.

We have written about the negative impact that deep cuts to state funding will have for Pennsylvania children, seniors and our economy. Now a new report from the Center on Budget and Policy Priorities shows that we aren't alone.

At least 38 of the 47 states with new 2011-12 budgets are cutting K-12 education, higher education, health care, or other key public services, according to the report. As Policy Analyst Erica Williams writes at the Center's Off the Charts Blog:

While states continue to face rising numbers of children enrolled in public schools, students enrolled in universities, and seniors eligible for health and long-term care services, most states (37 of 44 states for which data are available) plan to spend less on services in 2012 than they spent in 2008, adjusted for inflation — in some cases, much less.

State lawmakers no doubt faced tough decisions this year, with revenues still far below pre-recession levels and emergency federal aid all but expired. Still, our review shows that the cuts are unnecessarily harmful, unbalanced, and counterproductive.

Pennsylvania is among that group spending less in 2012 than in 2008 (adjusted for inflation):

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