Without $216 million in additional funding, Moody's analyst Dan Seymour wrote in a report to clients, the district threatens to increase the average class size to 41 students and lay off more than 1,000 staff. " This is credit negative because a further deterioration in education services will likely result in additional student flight to charter schools and other alternatives," further reducing district revenues, Seymour added. 3 in 10 Philadelphia students already go to charter schools.
"Rising charter school enrollments have been a drag on the district’s finances, as state law mandates that public school districts pay the costs of sending students to charter schools. Driven largely by charter school tuition costs, the district’s costs per pupil have increased 70% since 2004. Further enrollment declines would exacerbate the district’s financial pressure as charter schools capture a larger share of the district’s expenditures," Moody's adds.
The state took over the school district and the city has little power over it, except deciding how much additional money give it.