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Pennsylvania Amends Financial Recovery Plan for Chester Upland District

The administration of Pennsylvania Gov. Tom Wolf proposed a series of sweeping changes to Chester Upland school district's financial recovery plan on Tuesday, all steps the administration said were necessary to address the district's growing annual deficits that threatened the opening of schools this year.

The proposals included a financial audit for the 2015-16 school year to ensure that district money was being spent appropriately; the appointment of a financial turnaround specialist; altering the current special education spending rate; and capping tuition for regular education students who attend cyber charter schools at $5,950 and using the Special Education Funding Commission rate proposal for special education students in cyber charter schools.

Other proposed fixes include hiring a financial management firm to see the district through its financial distress and restructuring the district's loan agreement with the department of education, including partially forgiving the first payment of a $10 million transition loan due June 2016.

"All children in the commonwealth deserve a high-quality education, and all of our lives are enriched when this happens," Gov. Wolf said in the statement announcing the amended agreement.

"Unfortunately, for 25 years, the Chester Upland School District has mismanaged its finances and failed its students, and even more troubling is that the commonwealth's solution, through governors from both parties, has been to throw money at the problem in an attempt at one-time fixes and band aids, masking what is a recurring crisis."

Chester Upland was first classified as a financially distressed district in 1994, and it has received more than $74.25 million in one-time state cash assistance since 2010-11 to help keep it afloat.

The district, according to the state, has a recurring budget deficit and a history of overspending its budget. Without intervention, the deficit for the 2015-16 school year was expected to be more than $22 million.

The district's current state is due to "the failure to limit district expenditures, rising charter costs beyond the district's control, and an over-reliance on 25 years of one-time cash infusions from the state, provided in addition to its share of formula-driven state subsidies," according to the state.

About 78 percent of the district's funding comes from the state. 

Part of what's driving costs is the amount the district pays for special education students in charter schools. According to the state, the district spends more than any other in the commonwealth on special education for students in charter schools and double what it pays to educate special education students in district-run schools. Charter school spending accounted for 46 percent of Chester Upland's total 2015-16 expenditure budget.

The petition to amend the financial recovery plan was submitted in Delaware County's Court of Common Pleas on Tuesday. You can get more details on the projected savings from the state's proposals as well as the history of how Chester Upland got to this point here.

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