>> i'm monica malpass. on "inside story," the philadelphia schools' budget is balanced for the first time in years, but now let's talk about next year. we'll get the inside story. hi, everybody. i'm monica malpass. welcome to "inside story." we want to talk about philadelphia's schools and with us is dr. bill hite superintendent of the schools. thank you for being here. >> thank you for having me. >> we have a big headline -- this is good news for philadelphia -- that at the end of this school year, you have now balanced the budget, no bond issues required, and so that's terrific. >> that is terrific, and that's a result of some hard things that we've had to do over the past three years. everyone knows and understands and remembers the school closures... >> right. >> ...the large numbers of individuals that we had to reduce, the concessionary labor contracts, the reducing admin spending to under 3% and so all of those things now have yielded a balanced budget and so who would have thought

that success, getting to zero, but we are at zero. now, july 1 starts a different fiscal year, and with that fiscal year is a new deficit and we have to focus on that deficit as we move forward. >> sometimes i think people just hear the ongoing money issues and challenges and the deficits, and they never hear the good news, so i'm glad we got that part in. >> absolutely. >> but it is a large number still. you're at $80 million starting july 1 -- a deficit as you said, but you just asked the city for $103 million to sort of get a jump-start on covering the deficit and what you might need for growth. so tell me more about where the money might come from and what your needs are. >> yeah, so we've asked the city for $103 million, and we asked the state for $200 million and the whole ask was $300 million, and that is what we need are those recurring revenues in order to remain balanced, and those recurring revenues will allow us to reinvest in things that are important to children and important to their success -- things that we've had to cut unfortunately -- things like health services, making sure

that we have courses that are responsive to what children are interested in or the next level of a course that they may need, and so all of those things are part of our work moving forward. we've identified that in our plans, and now the big work, in my opinion, is rallying for the first time around something that all of us seem to agree on, and that is those critically important investments in order to support public education for children here in philadelphia, and i think whether you're a parent, a taxpayer, a business owner a legislator, the mayor, or the governor, everyone has stressed the importance of ensuring that we rally around the opportunity to get some of these revenues into the school district. >> and you started three years ago here in philadelphia. you'll start your fourth year by the summer. >> yeah. >> pretty lofty goals, and many philadelphians who've watched, you know, some disappointments over the years with the school

district have been impressed by the loftiness of the goals, but a little bit, some of them perhaps, chagrined at "what's the likelihood that's ever gonna happen"-type attitude. so tell me where are we on getting all the kids up to grade level by age 8, getting kids prepped for work or college after high school? and we had one of the biggest dropout rates in the country for a major city. that seemed like a big you know, gap of trying to reach that goal. how are we doing on those two? >> so we're doing well in both cases, and so we're doing better. now, we still have a long ways to go, and we've made improvements there, and so now our graduation rate is just under 70%, and that's a pretty significant lift from where it was just 4 or 5 years ago. >> right. >> and -- and the second part around early literacy, now we're looking at expanding pre-k. i think the governor's talking this morning about an expansion of pre-k, but, in addition we have almost 100 different partners who are assisting us with the read! by 4th campaign which is a citywide literacy approach to ensure that children

are reading on grade level by the time they're 8 years old and we think that work will yield different results with respect to graduation, school attendance, college entry -- >> right. >> ...all of those types of things in the long run, and so we see those both as pretty significant factors, and that's why it is a part of our new strategic plan, action plan version 3.0, which then continues to build on that work as we move forward. >> let's talk quickly about the src -- some changes. it looks like leadership may change or the src, some people want it to go away altogether. what's your take on that? >> well, my take on the src is this -- number one, they're five individuals who work well together, and all five work well with me and my team, and so i think that it is -- we keep talking about governance and the governance structure when that's not the thing that people are most concerned about. what people are concerned about is whether or not the child has a very good teacher, whether

their school is safe, clean, and has the resources and materials it needs in order to sufficiently educate their children, and so, for me the whole conversation about governance has become a distraction because no one pulls their child out of a philadelphia school because of who's sitting on the src. >> it's the vehicle, it's not the main -- >> absolutely. and so i think we spend a lot of time and attention around that when that is -- it's inconsequential, in my opinion. >> it is the top issue for local voters -- education and improving it, so you're right. >> education and improving it, and you do that by improving the quality of instruction what children are exposed to and ensuring that, regardless of where they are and who they are, they have access and opportunity. >> and quickly, the books at bok. this was a little sort of tempest-in-a-teapot-type thing it sounded to me -- a bunch of books stored at one of our schools, bok, that's really being warehoused until you have time to get through them, but you have gone through them once already and used many of the ones that were usable to the tune of $2 million worth

of books. is that right? >> absolutely, and i'm glad you brought that up because the books at bok are the result of 31 schools that are closed, and we went through those materials. we were able to redistribute those materials before they actually went into bok, and then once in bok, we had a series of weeks where we invited individuals to come in and go through those materials. >> teachers, principals. >> teachers, principals. >> right. >> anyone who could use those materials. in fact, that's still going on. >> right. >> now, it is no secret that all of those materials are there. they have been there. when you close 31 schools, there's a lot of material. some are useful, some are not, and where they're useful materials, it is our responsibility to ensure that we get those to teachers and students who need those materials. >> it's a long process, and you've got some other priorities here. >> no question about it. and we don't have as many people as we once had. >> you should get you some volunteers to go through those books. >> and many individuals from our communities have already volunteered, and we're gonna set up a system so those individuals

can help us understand what we have over there and how we can organize it so that it makes it easier for people to come in and get those things. >> all right, dr. hite. thank you so much. >> thank you. >> appreciate your time. we'll be right back. "inside story" continues with our panelists after this. >> "inside story" is presented by temple university. temple fuels students with academics and opportunities to take charge. plugged into the city, powered by the world. temple.edu/takecharge.

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>> welcome back to "inside story." let's meet our panelists today. and they are ajay raju attorney. welcome back. thank you so much. brian tierney, marketing executive. good morning, brian. jan ting, law professor. good morning, sir. and christine flowers, attorney and journalist. good morning to you, as well. let's flesh out a little more about the schools. that good news was that the budget balanced for a few months, anyway. let's take that glimmer of hope. however, mayor nutter is asking for a possible 9.3% property-tax increase to help out schools for the next school year. that's a big chunk of change. will that happen? is that going to send people fleeing for the suburbs again? because taxes already are fairly high. what do you think, brian? >> i think it's the wrong way to go. i really admire bill hite. when you see him, he is a thoughtful person. he's trying to balance all these political intrigues. there's a lot of big dogs in this thing, not only from the state, local as well. he's trying to find the middle ground while improving the educational system. the issue is that we have to have some fundamental reforms. there's a reason that a third of the kids or more are going into charter schools -- 'cause they don't like the public schools. and parents are saying, "i'm not gonna let my child be an experiment here.

i want to go." not all the charter schools are great. some of them are terrific, though, too. and that's the real issue that he's facing with. they must reform it. and it starts with the teachers union, as well. >> that was the rub for bill green when the governor removed him from the src leadership role. he had gotten five charters approved, or at least that was happening at the src. now it appears that might not be happening. so, are we going with more money for charters, or do we need to put those resources, jan, in our regular schools? so there's sort of -- some people think it's an either/or situation. >> yeah. >> i think dr. hite's job is like, mission impossible. he's got to, like, thread the needle and deal with all these constituents with conflicting demands. and, you know, brian's right. charters show a lot of promise. on the other hand, they do drain resources from the remaining public schools, and it's hard to find the balance. governor wolf is a player now, and he has his views on how it ought to operate. i mean, in the end, there isn't enough money, and that's related -- we were talking

earlier about poverty and the lack of jobs, the disappearance of jobs. sometimes i think we have too many people in america given the technological revolution that's eliminated a lot of jobs, given outsourcing and the growth of the international labor market. >> but as for schools, now teachers want a little piece of the pie because they've had enough cuts that they would feel like it's their turn. that's the pft's take on, when balanced budgets happen, where's their share? right, ajay? and that's a tricky part, as well. >> well, i think there's a disadvantage if you're running a district school. and i understand what the pft wants, but if you're running a company and your employees can't work more than seven hours and four minutes, and if you have an incompetent senior person, you can't remove them with a more competent junior person because seniority rules. work rules and seniority rules that cripple or handicap the district schools are not rules that the charter schools have to play with. so there's an inherent disadvantage that the district schools have in what they can accomplish versus what charter

schools can accomplish. imagine running a 100-meter sprint. one guy has no parachute, the other guy's running with a parachute. that's the district schools' challenge. second, on the funding formula it's inherently unfair for the district schools. when they do the funding allocation for a charter school, for example, they have a menu of items that go into the allocation. let's just use transportation as one example, transporting kids. they use that on the funding form when they give money to charter, and then they reimburse the charter schools for the same thing. that means there's a double dip by the charter schools. so, the district schools are -- both the funding formula is unfair and, quite frankly, the pft has to make some concessions, you know, to have expanded schools and other things that make it more attractive. that's the reason why 30,000 people are standing on waiting lists... >> sure. >> ...to get into charter, because it's more attractive. it's easier to run that. >> and no matter how much everybody, in a perfect world, would like to have less politics, there is that layer, or multiple layers of politics that do impact what dr. hite's trying to do. so, are we getting rid of the src? is that helpful, or is it not helpful? how can we make it streamlined

here? >> it appears that the majority of philadelphians want to get rid of the src. they want an elected board. they want more control over what's happening. and in a sense, that does make sense. but, you know, to go to what ajay was saying, the district schools are at a disadvantage with respect to private schools and charter schools because they have much less autonomy. but i think -- there was an article recently that a woman wrote, and said that, you know if you put your child into a private school or a charter school, you're a bad parent, because you care more about your children than you do about the future of the rest of the -- you know, the future schoolchildren out there. and i think that -- >> what a wacked-out idea. >> it is a wacked-out idea. and what jan and brian were also saying is we need to be looking, here, at the -- you know, the good faith here is what is best for the children. not what's best for the pft. not what's best for the src leaders. you know, not what's best for dr. hite. what's best for the children. and i think we all need to work

together and look at what that is and not worry about a monopoly of the public school system if it's not working. if it's not working, kill it. >> yeah. does anybody really think, credib-- does anybody other than a member of the teachers union think the answer to this -- and i understand what governor wolf is, he got elected with labor support. but does anybody think what'll solve the problem, if we give the teachers union more power and more money. that's what's holding us back. i don't think anybody thinks that. >> although, it's a double-edged sword, because with any industry, i think, you can't keep good people unless you pay them. and the more pay cuts they have to put up with over time -- i'm not trying to play sides, i'm just saying, how do you lure good teachers? >> i don't think it's all about money, and i think there's a lot of people who go into teaching -- a lot of people in public schools who go into teaching because of all the right reasons, and they feel calcified, they feel like they're repressed by all these rules and all the union regulations, et cetera et cetera. they want to teach. they didn't want to join the union. >> and brian and i can tell you about nuns. nuns who had, you know, no union rules whatsoever. they were in it because they wanted to teach, because they loved the kids. i agree with that. >> and today in parochial

schools, and today in a lot of other just chart-- there's a lot of people who do it just 'cause they love to do it. they're making a decent living. but they also don't -- >> it's a higher calling for them. >> it is, yeah. >> giving back. >> they're certainly underpaid. teachers are certainly underpaid. but what i'm talking about are work rules that limit you. if you have certain rules that you begin with, if you're a company and you have certain rules that you have to deal with, if you have a company that doesn't have those rules, the company without those limitations, that can have expanded hours -- i mean, the trend now is to have expanded school days, have more involvement, more, you know, using meritocracy, not a tenure-based system, not seniority rules, not work rules that have seven hours and four minutes as the limitation of the work day. when you have those things you have a disadvantage if you're running that district school. >> and there are plenty of unions that are important and do a great job in their industries. but the philadelphia federation of teachers, i don't believe, is one of them. >> and, jan, right across the river, camden has similar issues with its school challenges.

many of the people there are worried that expanding charters, giving them more resources, is taking away from regular public schools. again, they have a new superintendent over there, dr. rouhanifard, and it's just a really difficult issue for this area. >> the problems in camden are almost a mirror image of the problems that we have in philadelphia, the struggle between charters and district schools, the lack of funding. but remarkably, in camden, as in philadelphia, there's always money for other projects. we can't fund the schools, but we can fund -- in new jersey they're funding all kinds of development projects. and, amazingly, the people who are benefiting tend to be politically well-connected. here in philadelphia, there's always money for tax abatements, there's always money for big projects like bringing the dnc to philadelphia. we can always raise money for that. we can always raise money for the pope's visit. you know, whatever it takes, we're gonna raise that money. but for the schools, somehow we just can't get it together. >> well, and the pope's visit -- let me just jump in on that. that's $45 million coming from

private sector completely, not from any government, and the economic benefit will be about $300 or $400 million. so i'm gonna separate that one. and i am senior advisor to the world meeting, but -- >> back to the camden issue with schools. half of their buildings, by the way, were built before 1928, and one of them, currently, if it's even dropped to 55 degrees, much less 25, they have to close the school because it's too cold. another school, three stories, only has one bathroom for a three-story building. >> maybe they can use the sixers training facility. [ laughter ] i mean, that's right there. >> it's like a one-armed paper hanger. if you're trying to hang wallpaper, how do you do it with your hand behind your back? >> well, camden has a host of both infrastructure and society issues that make it even worse than philadelphia. remember, they spend $22,000 per student. we spend $11,000 per student district schools, and our district outperforms camden every day. so it's not just about money. it's really, again, to the earlier point, what you do with the money, how you lead, and how you manage that money is the important thing. camden has a host of issues that

are even worse than what philadelphia is facing -- deep poverty and, quite frankly, a lack of a good system and cohesive political structure that is supportive of a lot of those things. and as you mentioned, money being allocated to political forces that, quite frankly don't go directly into the constituents. >> which is true. and what about the situation where you have -- and it's almost arbitrary -- where you have actually one business in camden that actually owed money to the state, which got a tax abatement. they got money from the state even though they were defaulting on a loan, or even though they owed money. so it's just -- you have to wonder, where is this coming from? where are the priorities? >> and the answer to that was an ap story in the philadelphia inquirer. it was interesting. at the end of it, that particular business got another loan. and the answer from the state was that it wasn't personally guaranteed, so they -- well, that's another issue. i mean, it might not be personally guaranteed, but if somebody didn't pay you a loan would you give them a new loan? >> hand them more money, right. you got to wonder. >> you know, you would kind of say, "gee, it didn't work out so well the first time." >> well, would you give a tax incentive for a company -- the

tax incentive and subsidy itself is larger than the value of the company itself? that was another example. >> exactly. >> and i think these raise real questions. >> well, of course, whoever's the next mayor of the city of philadelphia has a big say in education, as well as many, many other issues. but let's talk about the mayor's race and how that seems to be going. we'll weigh in first of all, christine, with you. there was an endorsement by the pft, so let's hear about whether you think jim kenney is the right one to have gotten that endorsement and how the whole race seem to be shaping up. >> well, i can't make the definitive answer as to whether or not he was the right one. i can say i was shocked. i was actually shocked, because jim kenney tends to be on the rather far leftward edges of you know, philosophy. and the f.o.p., it surprised me that, especially with his comments about oversight decriminalization of marijuana, his criticism of the police force over the years -- it surprised me that they would throw their lot behind him as opposed to lynne abraham, who has a very strong law and order background -- was a judge, was

d.a. so it is surprising, although it is a major feather in his cap for him to have gotten that. >> right. >> i-i-i go back to my other thought. i mean, i think "congratulations to jim kenney." but if you think that -- this continues the party. the public-sector union's picking who the new mayor is is not the solution to our problem. if it was the building trade you'd say, "these people really do want the city to boom because their jobs are dependent upon construction." but here we're talking about public-sector union saying they want jim kenney, and for me, if i lived in the city of philadelphia, i'd be wondering if that's the kind -- if that's the direction i should go. >> even more that the endorsements themselves, i was impressed by the kenney campaign's ability to lay them out in a planned way, one after another, to kind of build momentum for their campaign. that was pretty impressive, that they have this well thought-out. it's still really early in this short campaign. the outside interests haven't weighed in yet. how much money are they willing to spend to support their

candidates or to oppose candidates that they oppose? there's a lot of kind of questions marks still on the scene, but the kenney campaign's initiative in lining up these endorsements is pretty impressive. >> how does that play out for senator williams, for nelson diaz, for lynne abraham as they said -- some of the other candidates? >> i think senator williams is the front runner. if you just look at the demographics, it's his race to lose. and i think they're also running a pretty effective campaign. kenney is an impressive guy. really likable. and on almost -- many of the issues, very progressive. but i think the major concern would be if you have all of the overwhelming heavy thumb of the unions influencing that mayoralty, whether or not there will be consolidation of just all of that influence in just one -- one special-interest group or one segment of our population. >> we are the most impoverished city in america. so if you want to keep the party going -- >> wouldn't you go backwards? >> or if you say, "you know what? this isn't working. we need something different." when you look at -- i mean

remarkable, frankly, what ed rendell did in the '90s. we're still benefiting from it. i remember having my offices downtown. you'd walk out in 1989 at 6:00 it was a ghost town. and you're seeing the development, and it ripples out from it. and i think we don't need somebody who all the public-sector unions are supporting, i don't think is the way to go. >> let's hit two quick topics before we wrap it up. pension reform -- are we really gonna get any pension reform when the people who are doing the pension reform are benefiting from pensions? does that even make sense? >> no. it's not gonna happen until we get to a detroit-type situation. >> it's very discouraging to hear mayoral candidates say what their gonna do about pensions, which is form a study commission and study it really hard and come up with magic solutions that solve the problem. i will say that lynne abraham has bitten the bullet on it in saying, as to new hires, she's gonna switch them onto a different kind of pension system more like a defined contribution plan instead of a defined benefit plan. she would try and protect the pensions of the existing employees and retirees by switching new employees onto a different plan.

>> doesn't that make sense, too? like, let's not continue the problem. >> that's a bit of change that's concrete, and lynne abraham is out there arguing for that. >> because it is one of the biggest budget items that is eating away, obviously, at the city budget every year. all right, and quickly, how does everybody feel? it seems like a no-brainer. but when septa cops are now handing out little business card-type things to parents around the city, saying, "wait when you say to your child 'there's a policeman -- if you don't straighten up, he might arrest you,' as sort of a discipline approach for your child, you might very well be frightening that child so much they wouldn't ask a police officer, septa or otherwise, for help if they're lost or if they're a victim." so they're now handing out cards to parents saying, "don't make us your scapegoat." make sense or not? >> it's a -- i mean, i think people's view about police are gonna be shaped a lot more from their day-to-day interactions and things like that. so i understand the controversy, but it seems -- >> but i think -- i think it's actually a good idea because i have seen parents say, "watch out! i'm gonna have --" and you see the fear in the eye of the child. so i definitely think -- and i feel much safer when there is a septa police officer on my car.

>> oh, no doubt about it. >> and i think a child should. >> all right, we'll have inside stories coming up next. we'll be right back. trading-in or selling your car truck or suv? webuyanycar.com takes the hassle out of selling in just 3 easy steps. one, get your free online valuation. two, book an appointment. and three, pick up a check at your nearest buying center. ♪ find out how much your car is worth ♪ ♪ at webuyanycar.com ♪

>> "inside story" is presented by temple university. temple fuels students with academics and opportunities to take charge. plugged into the city, powered by the world. temple.edu/takecharge. >> time for inside stories of the week, and let's start with ajay. >> monica, there's many important topics to talk about education being one of them. but poverty's another one. i hope people focus on poverty -- deep poverty. 25% live under poverty line, 17% in deep poverty line. i hope that becomes a topic in the mayor's race. >> in philadelphia. all right, christine. >> monica, a bipartisan human trafficking act was derailed this week when democrats objected to the inclusion of hyde-amendment restrictions on federal funding of abortion. there is no human trafficking protection act. >> mm. jan. >> the general accounting office of the federal government reports the government is spending each year $125 billion,

with a "b" -- tax dollars -- on improper payments to things like social security to dead people earned income tax credit medicare fraud, medicaid fraud. $125 billion. >> mm. all right. and brian? >> hertz rental car admitted this week that, in many of their new cars, there are both video cameras as well as audio recorders. they say they install them, but they don't tend to use them. hmm. >> ah, guess you're not renting hertz anytime soon. >> avis. i'll go avis. budget. >> that's it for "inside story" this week. we'll see you next sunday. have a good one. [ laughs ] >> i'm nydia han along with eva pilgrim. coming up next on "action news," it's the end of the road for villanova. the wildcats are returning home. police say a young girl tried to poison her mother for taking her i've phone away. a brooklyn community saying goodbye to seven children killed in a house fire. those stories and more next on "action news."

his >> good afternoon, it is sunday, march # 2 i'm nydia han along with eva pilgrim. >> here's some of the stories we're following on "action news." it was a heartbreaker for villanova. the team