As City officials prepare to make their case to the state that they have progressed to the point where they can shed Act 47 distressed status, just up the road at Pittsburgh Public Schools’ headquarters they are asking whether the District is in such financially bad shape that it will be "bankrupt" in three years. One board member asked "By 2015, are we broke, out of business?" to which a consultant replied, "correct".
That’s a bit strong. Districts cannot go bankrupt in Pennsylvania as they are not permitted to file by the state (only municipalities can). But there are new provisions in state law under Act 141 that prescribe how the state, through the Department of Education, is to deal with school districts facing financial distress. We wrote about the legislation before it was singed into law this past June.
Act 141 applies to all districts in the state except for Philadelphia. A district can fall into either "moderate" or "severe" distress and for a district deemed as such (the law says there cannot be more than nine at one time) the state will appoint a Chief Recovery Officer who will write a recovery plan. The plan has to be approved by the district’s board, and there are procedures for what happens if approval is delayed. There are a variety of tools for getting a district back to sound financial footing from reopening of budgets, examining contracts, exploring charter schools, and other options. Exit from financial recovery depends on the progress of the district and the determination of the Secretary.
Is Pittsburgh headed here? Who knows? There might be other options on the table, but as the Superintendent noted "We believe there’s a way forward. It may not be something we thought of before. It may not be something that comes to the mind readily. It may not be something that’s easy to arrive at."