A City's Schools Test a New Way ; School Privatization Gets a Boost from Good Results in Philadelphia

When the Philadelphia School District was struggling several years ago, one of the lifelines tossed to it was thrown by Edison Schools, Inc., a New York-based for-profit offering a can-do approach to public education.

Since then, the nation's largest educational management company has had troubles of its own, ranging from failure to perform successfully in a number of the public schools it was serving to a virtual collapse in the value of its stock.

But if privatizing school management has not proven to be the panacea many in Philadelphia had hoped, neither has Edison been the district's undoing, as activists and others warned when the firm was brought in during the rancorous and bitter state takeover of the district in 2002. On the contrary, test scores are up district- wide, and some of the most impressive gains have come in 20 of the toughest schools, those turned over to Edison in a last-ditch effort to jump-start them into performing.

"They've done a superb job with the most difficult schools," said James Nevels, chairman of the state-appointed School Reform Commission, which took over after the school board was disbanded.

Many thought the company itself wouldn't last. Stock prices had plummeted by 2003, some districts canceled their contracts, and the company went private that spring. But Edison spokesman Adam Tucker says the company's slide has been reversed and it enjoyed its first operating profit in its 12-year history at the end of last year.

The district, says chairman Nevels, has seen no evidence of financial troubles, but is free to terminate the contract "at will."

Not everyone has been converted. Barbara Goodman, spokeswoman for the Philadelphia Federation of Teachers, which fought the partnership, and whose members now staff the Edison schools, credits the district workforce with the gains in performance, and says the PFT favors uniform administration. Lois Yampolsky, a community activist who also fought privatization, still believes profitmaking Edison shouldn't be there, rejecting the company's argument that in public schools everything from transportation to textbooks comes from the private sector - and that there's no reason management shouldn't as well.

In the Philadelphia district, the company is the largest player in a network of independent management partners that includes universities and colleges as well as other private companies. Such outsourcing exists to various degrees in Chicago, New York, and other large cities, and is a development applauded by some experts.

"Centralized control is not working in American urban education," says Paul Peterson, professor of government at Harvard University. One way to find out what does work, he insists, is to explore a range of options in a Philadelphia-like mix.

Before the state takeover, the school district, with 200,000 students and 276 schools, seemed badly in need of new solutions. The Reform Commission, which hired CEO Paul Vallas, formerly head of Chicago schools and credited with positive reforms in that district, selected Philadelphia's 45 worst-performing schools and divvied them up for intensive care. …