Toxic finance: underinvestment in Philadelphia’s school buildings, 1993–2021

Public school districts in the United States borrow over a trillion dollars for their facilities each year from the municipal bond market, yet more than half of these school buildings need significant repair. In this paper, we examine the relationship between a single school district infamous for its infrastructure needs, the School District of Philadelphia (SDP), and municipal bond market lending practices. Using a critical school finance framework, we ask what role municipal market lending has played in the SDP's toxic schools. After a review of relevant literatures, we calculate the efficiency of SDP's bond revenues and expenditures between 1993-2021. We find that for every dollar the municipal bond market lent the district for capital expenditure, the SDP could only spend 43 cents. Discussing the historical and policy context of this finding, we argue that Philadelphia's schools are toxic because their financing has been toxic.