Does D.C. School System Really Have A Surplus?

Washington D.C. schools chancellor Michelle Rhee and the teachers union have reached agreement on a new contract after more than two years of wrangling. Rhee has acknowledged that she's known for more than a month that a $46 million budget deficit — the reason she laid off more than 200 teachers last fall — was an error. In fact, she says the school system has a $34 million budget surplus.

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And in Washington, D.C., after a long battle to work out a new way of hiring and rewarding teachers, a tentative agreement is now in doubt. That contract had been hailed as a possible model for the rest of the country.

NPR's Claudio Sanchez explains what happened.

CLAUDIO SANCHEZ: After nearly three years of bitter contract negotiations, it appeared the Washington Teachers Union and schools chancellor Michelle Rhee had finally come to a groundbreaking agreement, announced with great fanfare on April 7th. A few days later, Rhee dropped not one, but two bombshells.

Under questioning from city council members, she said her decision to lay off 266 teachers last fall was based on a multi-million-dollar budget deficit. That deficit, Rhee said, turned out to be inaccurate. In fact, she later learned there was a $34 million surplus. She blamed the confusion on the city's chief financial office, which immediately fired back, saying Rhee was wrong on both counts.

George Parker, the president of the Teachers Union, called for a news conference to say he was stunned and confused.

Mr. GEORGE PARKER (President, Teachers Union, D.C.): I think everyone is confused in terms of whether the money is there or the money is not there. That causes some doubt in terms of the credibility of the chancellor. And I think thats very, very disturbing.

SANCHEZ: After repeated requests, Rhee declined to speak to NPR. But in a written statement she insisted that she had been reassured there was a surplus in the school budget. Union leaders say their pending contract with Rhee is on hold and that they cannot trust what she says anymore.

Ms. RANDI WEINGARTEN (President, American Federation of Teachers): It is an appalling lack of judgment and leadership.

Randi Weingarten, president of the American Federation of Teachers, helped negotiate the D.C. teachers' contract with Rhee.

Ms. WEINGARTEN: You can't run a school system that way, and ultimately everybody has to be accountable in terms of making sure that this system works.

SANCHEZ: To that end, the Teachers Union wants resolution on three fronts. One, it wants a D.C. Superior Court judge to reopen a lawsuit demanding that Rhee reinstate the 266 teachers she laid off in light of Rhee's admission that they were fired based on inaccurate budget information. Secondly, the union also wants the city's chief financial officer to clarify, once and for all, if the school district is running a deficit or a surplus. And third, union leaders want teachers to ratify the contract.

Ms. WEINGARTEN: But we can't vote to ratify that contract until we are certain that the District of Columbia public school budget can fully fund it.

SANCHEZ: Veteran teachers whove been trying to follow all this dont know if they should be surprised, angry, sad.

Mr. FRAZIER O'LEARY (High School Teacher): Well, it's embarrassing.

SANCHEZ: Frazier O'Leary has been a high school social studies teacher in D.C. for 40 years.

Mr. O'LEARY: We want to have a first class school system. We want to be recognized as - Im sure what the chancellor wants us to be and what the union wants us to be. And reform is needed, but reform without trust doesnt work.

SANCHEZ: And that, says O'Leary, is the sad lesson here. A historic contract, a breakthrough in the way teachers are compensated that puts performance ahead of seniority and compensates teachers based on students' achievement is hanging by a thread because somebody got their math wrong.

Claudio Sanchez, NPR News.

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