Philadelphia’s school board approves $1.5B loan, ratifies teachers union contract

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The School District of Philadelphia’s budget is tied to the state’s coffers, but despite a budget impasse at the legislature, the board voted to borrow up to $1.55 billion.

Thursday’s special Philadelphia Board of Education meeting tackled three main topics: the contract ratification of the Philadelphia Federation of Teachers union, the Tax and Revenue Anticipation Notes presentation (TRAN) and the review of Goals and Guardrails data.

The board approved the ratified contract unanimously. Joan Stern, a school board member, called for recognition of the team that negotiated the PFT contract; each member, upon introduction, received applause.

The TRAN resolution passed 8-0 with board member Joyce Wilkerson abstaining. Her status as a board member was recently called into question by a lawsuit from People for People Charter, a school threatened with nonrenewal.

What is a TRAN?

A TRAN is a plan to borrow money and then pay it back later through tax revenue. These loans help offset funding, where revenue is inaccessible. For example, much of the property tax revenue the School District of Philadelphia receives comes in during March and April, but spending needs to occur year-round.

This is not a new undertaking for the school district. The district has had a TRAN plan 38 of the last 40 years, according to Michael Herbstman, chief financial officer for the School District of Philadelphia.

“Over 53% of our funding comes from the state budget,” Herbstman said. “As the state budget impasse continues, the state administration is not able to issue payments for either state revenue sources or federal revenue sources that pass through the state.”

Herbstman’s team estimated that the district would have to borrow $1.55 billion to cover the gap in state and federal funding because of the budget impasse. This amount of borrowing would cost the district $29.3 million in interest and issuance.

The loan would fund operations until December, Herbstman said. But “there will be a point if it continues where it will be more difficult to borrow.”

This could lead to cost cutting efforts within the district, he said.

Had the state’s budget passed, the district would still need to borrow $550 million, costing the district $14.5 million, according to Herbstman’s presentation. That means the school board is borrowing an extra billion dollars compared to years where the budget would be resolved.

“This is not just a Philadelphia problem,” said Reginald Streater, president of the school board.

Board member Wanda Novalés isn’t thrilled about borrowing money. “Every week of the delay puts more pressure on our budget, and every dollar spent on interest is a dollar not spent on our kids,” Novalés said.

Several members of the board lambasted the state legislators for not passing a budget. Whitney Jones called for the people at the meeting and those part of the district to “first, visit paschoolswork.org/budget … Second, call your state senator.”

Board member Crystal Cubbage highlighted the significant dollar amount that the district needs to borrow.

“We all need to lobby the state to get these funds in our coffer,” she said.

“The only people who haven’t been able to stir their stumps are the state legislators,” said Joan Stern, pointing out the governor, mayor and school board had all approved their budgets on time.

Lisa Haver, a retired city teacher and one of the co-founders of the Alliance for Philadelphia Public Schools, questioned the board about budget choices during the open discussion period.

She mentioned the payments to charter schools and their CEOs. Some of those executives’ salaries can go up to “$500,000,” she said.

Despite the voting yes on the resolution, Streater mentioned his disdain for having to take TRAN loans at all.

“The fact we have to do a TRAN every year is annoying to me in some ways,” he said. In 20 years, “I hope the board doesn’t have to TRAN borrowing, ever again.”

Goals and Guardrails

The board ended their meeting by reviewing data around the goal of “Guardrail One.”

This guardrail wants every school to be a “safe, welcoming and healthy place where our students, staff and community want to be and learn each day,” said Tanya Wolford, chief of the school district’s Office of Evaluation, Research, and Accountability.

The presentation and data centered on work order completion and teacher certifications.

“The data we will see tonight are two topics linked to the guardrail,” Wolford said.

The analysis on work orders focused on restrooms and water fountains because students cited restroom conditions as a factor for feeling safe in school.

These identifiers of progress on work orders were set by the school board around two years ago, according to Oz Hill, deputy superintendent of operations for the district.

The time to complete work orders in those areas has dropped, according to Wolford. For restrooms, work orders were completed after 50 days on average in 2022-2023, which is down to 34 in 2024-2025 — this, in spite of an increase of work orders over the same time frame.

Teacher certifications are important for student success too, said Wolford.

“The No. 1 factor in accelerating academic achievement is a highly qualified, well-supported, stable teacher over time,” Wolford said.

The percentage of teachers with an emergency certification has risen in the past year, increasing by 5.7 points district-wide and 7.1-point in schools ranked among the bottom 50 in the district.

Emergency certifications are given to teachers who have a bachelor’s degree but do not have a standard teaching license.

Roughly a third of teachers in the bottom 50 schools have emergency certifications, which is 12 points more than district average.

Hill outlined plans to improve the goal of a safe and welcoming environment. The district plans to replace the analog security system in 53 schools, continue improving pathway programs for aspiring teachers and make public the dashboard containing data on building conditions and utilization.

The data was made public earlier this week, and Superintendent Tony Watlington said the data in the dashboard will be used to help determine which school should close. Two members of the Alliance for Philadelphia Public Schools questioned that decision.

Of the nine school board members, eight had questions or comments about the presentation on the Goals and Guardrails.

Wilkerson had concerns with the rate of emergency teaching certifications, asking, “Are we ever going to evolve beyond the crisis?”

“The number of people going into a public or private university to become a teacher is down 50% nationally,” Watlington said. He said the crisis is going to be hard to resolve fully despite deliberate effort by the district.

Streater echoed Wilkerson’s concern.

The concentration of teachers with emergency certifications in the bottom 50 schools is concerning, Streater said.

“I think that it’s an important factor for us to chew on,” he said.

Other board members, like Navalés, called out things not included in the work order portion of the presentation.

“As important as bathrooms are, as important as water is, there are so many other things that matter,” she said.

ChauWing Lam, the school board member who helped lead the discussion, ended the presentation by acknowledging new identifiers of the goals might be better for identifying school safety.

Editor’s Note: Nate Harrington’s WHYY News internship has been made possible thanks to the generous support from the Dow Jones News Fund O’Toole Family Foundation Internship.