After five years of financial recovery, Penn Hills School District has a stable picture ahead

Pennsylvania Secretary of Education Khalid Mu'min visited Allegheny County to announce the Penn Hills School District has come out of financial restructuring.

Nearly five years after adopting a plan to address huge deficits and rapidly declining student enrollment, Penn Hills School District officials said the district's finances are finally stable.

Pennsylvania Secretary of Education Khalid Mu'min visited the district on Thursday to announce that Penn Hills has met the state's financial restructuring requirements.Financial Restructuring Status.

"This is a process where leadership is changing and school board members are changing. We must stay focused to make it sustainable.

The state Department of Education will continue to monitor Penn Hills' financial and academic progress over the next five years. Superintendent John Mozzosio said the district's education officials will continue to work aggressively to secure the district's future.

"The end of financial restructuring is not the end of our journey. It's a new beginning. It's an opportunity to build on our successes, taking what we've learned through this process.

Dan Matzok, the district's chief restructuring officer, said Penn Hills' five-year financial projections show it has achieved enough stability to weather unexpected setbacks after teacher furloughs, bond financing and strategic investments to address enrollment declines.

"The cycle of relying on temporary funding to pay our bills has finally been broken," Matzok said.

In the 2018-2019 school year, the district faced a negative fund balance of $18 million and total debt of $288 million. Officials repeatedly took out millions in bank loans and requested state cash advances to stay solvent.

As a retired superintendent, most recently at Central Valley Schools in Beaver County, Matzuk, in his state-appointed role, worked with administrators and the school board to stop using prepayments and create sustainable cash flow. That required cutting staff and bolstering revenues with property tax hikes, he said.

As of the 2022-2023 school year, the district had a fund balance of $19. 6 million in the black.

"The phoenix has risen," Matsuoka told school board members last month.Last month. "From self-inflicted financial difficulties to a self-renewal and new hope. That's what happened here."

Resolving more than a decade of financial tumult

According to Matsuoka, the first step to secure the future of the district was the "rights" of the district facilities and salaries. Penhills in 2008 had nearly 5, 000 students, but according to the district's reconstruction plan, the number of students in 2008 was 5, 000.Regeneration planBy 2018, the number of students decreased to 3, 360. "I reduced the school building from eight to three, and made one elementary school from six elementary schools, but it wasn't adjusted on the budget. But" it wasn't adjusted by the budget. " 。 In the 2019-2020 grade, 31 faculty and staff were reduced by temporarily returning and reduced personnel. Matsuk says that the second stage was a response to lon g-term debt. The district has refinanced bonds twice in the first two years of the recovery process, eliminating about $ 25 million debts. Refinancing could avoid the $ 3 million debt repayment a year. The high school completed in 2012 and the Chuo Elementary School completed in 2014. Strict from PennsylvaniaStrict report from Pennsylvania AuditIn a strict report by the 2016 Pencil Vannia Governor, the lon g-term debt balance rose $ 11 million in the previous eight years to $ 167 million. SubsequentAgeeny County Large Jury ReportHas called this construction plan a "terrible case of public trust abuse." "The miserable financial situation is an unprecedented leadership for many years, an inactive decision made to promote personal interests, and a no n-effective surveillance by those entrusted to protect the interests of Penhills taxpayers. The result is the 2019 county report. According to Matsuoka, members of the Board of Education during the construction period chose to not increase the tax for the fifth consecutive year during the construction, worsening the problem. In order to correct the damage, the Board of Education has approved the financial reconstruction plan:Tax increaseIt was to increase the tax increase by the state without the approval of voters. The board members are membersInitially resisted the tax increaseeventuallyApproved the amendment. According to Matsuoka, the first step to ensure the future of the district was the "rights" of district facilities and salaries. Penhills in 2008 had nearly 5, 000 students, but according to the district's reconstruction plan, the number of students in 2008 was 5, 000.Regeneration planBy 2018, the number of students decreased to 3, 360. "I reduced the school building from eight to three, and made one elementary school from six elementary schools, but it wasn't adjusted on the budget. But" it wasn't adjusted by the budget. " 。 In the 2019-2020 grade, 31 faculty and staff were reduced by temporarily returning and reduced personnel. Matsuk says that the second stage was a response to lon g-term debt. The district has refinanced bonds twice in the first two years of the recovery process, eliminating about $ 25 million debts. Refinancing could avoid the $ 3 million debt repayment a year. The high school completed in 2012 and the Chuo Elementary School completed in 2014. Strict from PennsylvaniaStrict report from Pennsylvania Audit

In a strict report by the 2016 Pencil Vannia Governor, the lon g-term debt balance rose $ 11 million in the previous eight years to $ 167 million. Subsequent Ageeny County Large Jury Report

Has called this construction plan a "terrible case of public trust abuse." "The miserable financial situation is an unprecedented leadership for many years, an inactive decision made to promote personal interests, and a no n-effective surveillance by those entrusted to protect the interests of Penhills taxpayers. The result is the 2019 county report. According to Matsuoka, members of the Board of Education during the construction period chose to not increase the tax for the fifth consecutive year during the construction, worsening the problem. In order to correct the damage, the Board of Education has approved the financial reconstruction plan:

Pandemic aid significantly accelerated Penn Hills’ recovery progress

Tax increaseIt was to increase the tax increase by the state without the approval of voters. The board members are membersInitially resisted the tax increaseeventuallyApproved the amendment. According to Matsuoka, the first step to secure the future of the district was the "rights" of the district facilities and salaries. Penhills in 2008 had nearly 5, 000 students, but according to the district's reconstruction plan, the number of students in 2008 was 5, 000.Regeneration planBy 2018, the number of students decreased to 3, 360. "I reduced the school building from eight to three, and made one elementary school from six elementary schools, but it wasn't adjusted on the budget. But" it wasn't adjusted by the budget. " 。 In the 2019-2020 grade, 31 faculty and staff were reduced by temporarily returning and reduced personnel. Matsuk says that the second stage was a response to lon g-term debt. The district has refinanced bonds twice in the first two years of the recovery process, eliminating about $ 25 million debts. Refinancing could avoid the $ 3 million debt repayment a year. The high school completed in 2012 and the Chuo Elementary School completed in 2014. Strict from PennsylvaniaStrict report from Pennsylvania AuditIn a strict report by the 2016 Pencil Vannia Governor, the lon g-term debt balance rose $ 11 million in the previous eight years to $ 167 million. SubsequentAgeeny County Large Jury ReportHas called this construction plan a "terrible case of public trust abuse." "The miserable financial situation is an unprecedented leadership for many years, an inactive decision made to promote personal interests, and a no n-effective surveillance by those entrusted to protect the interests of Penhills taxpayers. The result is the 2019 county report. According to Matsuoka, members of the Board of Education during the construction period chose to not increase the tax for the fifth consecutive year during the construction, worsening the problem. In order to correct the damage, the Board of Education has approved the financial reconstruction plan:

Maintaining stability, and improving student outcomes, requires “fidelity”

Tax increaseIt was to increase the tax increase by the state without the approval of voters. The board members are membersInitially resisted the tax increase

eventually

1. Approved the amendment.
2. Was added to the financial reconstruction plan, instructed the tax increase, and established a financial balance policy that contributed to future tax examinations. In May 2023, the Board of Directors also approved a ta x-ligh t-losing program for the elderly who account for about 20 % of district taxpayers, as a means to reduce the burden on local taxes. According to the state data of 2023-2024, Penhills's local tax burden is the third highest in Aregeny County. "It's hard to raise taxes. I think everyone involved in this system acknowledges it from top to bottom," says Penhills' former Nancy Hines. "It's a bitter measure for budget balance." but
3. Mr. Heades

Heades, who retired from the superintendent of education last October, said that the tax increase was a necessary strategy to maintain the district.

Gillian forstat

90. 5 WESA

From left to right: Erin Vecchio, Chairman of the Board of Education, and Kalid Mumin, Secretary of Education, Pennsylvania. Secretary of Education Kalid Mumin, Daniel Masochoc, the highest reconstruction, John Moszosio, and Joe McCurus

Penhills is the third district that has escaped from the state of fiscal consolidation in the past year and a half. The school in York was excluded from the Financial List in December 2022 after recovery for 10 years.

Scranton School DistrictThree and a half years later, he graduated from the designated school in January 2023. According to Matsuk, the great savings realized during the pandemic school closure, and without the inflow of $ 18. 1 million, Penhills would not meet the state's reconstruction standards.$ 18. 1 million

Without the $ 1 million federal pandemic rescue, it would not have met the state's reconstruction standards. "Because we had no such funds at hand." We must manage it correctly and continue it. The area is learning by capital projects, COVID-19 related expenditures, and pandemic. In addition to the increase in the number of leading specialists to restore students, these lands are expired in September. While preparing

There is no funding paid by the federal governmentWith the significant increase in state education funding in recent years, Pen Hills has become easier to deal with this reality. According to Governor Josh Shapiro's budget, Pennsylvania will receive the following support:State education funding over millions of dollars

Enrollment loss to local charter schools remains a threat to stability

It targets districts with the greatest financial need. But Matsuoka said after last year's budget impasse, the district can't count on additional state funding "until we get it." Current budget projections depend on a general increase in the state's basic education budget, but "if it increases, it's like gravy for us, it will make us more stable," he said.

Matsuoka said the district has had to make tough cost-cutting decisions over the past few years, but school leaders have worked hard to ensure that doesn't hurt the district's academics. Part of the recovery plan included reducing kindergarten class sizes, extending school hours by implementing block schedules, and expanding professional development programs for teachers. Despite cuts early in the recovery process, the district has since added 21 staff and, with pandemic assistance, added reading specialists to elementary schools as a way to get all students to grade level by third grade. Through third grade. The district has spent nearly $2. 5 million on its "Bee Ready" reading program over the past two school years. Matzok said it has helped catch up on learning lost during the pandemic, but added there is still a lot of progress to be made. Test scores show progress among the district's elementary students, but Keystone's high school performance is still mostly below the state average. "Fidelity is our challenge. There are great things happening in every classroom, so we need to have consistency across the board. It doesn't make sense to have 200 teachers and 20 of them are great and the rest are struggling.

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In response to high staff absenteeism, districts have implemented incentive programs to reward attendance, but educators say absenteeism remains a challenge.

"Because no one wants to take responsibility. No one wants to take responsibility, but that is important. Heades said. "To change the system, you have to change the organizational culture. That is the most difficult."This issue also affects the restoration of the district, which was implemented as part of the recovery process. According to a drop in school, the high schoo l-level youth participating school expert (YESS) team is rarely arranged in the absence, employee retirement, or vacancy.Nevertheless, the preliminary data on disciplinary cases and its cancellation indicates that the Yess program is changing. Between September 2023 and 2024, elementary schoo l-level cases decreased by nearly 16 %, and Linton Junior High School cases decreased by nearly 36 %.

For the past two years, Penhills has invested more than $ 1. 7 million in the Yess program and was first implemented in Linton in FY2020-2021. The staff are trained in diescalation and mediation skills.

Officials in the district said on Thursday that this restorered justice program would be introduced.

Alliance with Presley Ridge

The partnership with will be held i n-house next year.

According to Pen Hills's Assistant Dawn Golden Education, "I emphasize that the appropriate human resources are involved with the children when considering that the school district is to carry out programs in the school. I want that. "

The district has also changed the school suspension model to a New Directions program, and has been a therapeutic counseling for disciplinary actions to deal with the root cause of inappropriate behavior. This year, $ 9006, 000 in this area

State Unemployment by Race and Ethnicity

The second quarter of 2024 saw slight softening in a strong labor market as unemployment rates increased across groups and disparities remained unchanged

Private security team

The security team is mainly for security at the entrance of the school building and assisting student chec k-in in the morning.

Methodological note

Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school. < Span> "Because no one wants to take responsibility. No one wants to take responsibility, but that is important. Heades said. "To change the system, you have to change the organizational culture. That is the most difficult."

This issue also affects the restoration of the district, which was implemented as part of the recovery process. According to a drop in school, the high schoo l-level youth participating school expert (YESS) team is rarely arranged in the absence, employee retirement, or vacancy.

Second -quarter 2024 state unemployment rates, trends, and ratios

The combination of a softening labor market and cooling inflation means there’s room for the economy to grow further and narrow unemployment gaps

Nevertheless, the preliminary data on disciplinary cases and its cancellation indicates that the Yess program is changing. Between September 2023 and 2024, elementary schoo l-level cases decreased by nearly 16 %, and Linton Junior High School cases decreased by nearly 36 %.

For the past two years, Penhills has invested more than $ 1. 7 million in the Yess program and was first implemented in Linton in FY2020-2021. The staff are trained in diescalation and mediation skills.

Overall unemployment rates 2024 Q2

Officials in the district said on Thursday that this restorered justice program would be introduced.

Alliance with Presley Ridge

The partnership with will be held i n-house next year.

According to Pen Hills's Assistant Dawn Golden Education, "I emphasize that the appropriate human resources are involved with the children when considering that the school district is to carry out programs in the school. I want that. "

The district has also changed the school suspension model to a New Directions program, and has been a therapeutic counseling for disciplinary actions to deal with the root cause of inappropriate behavior. This year, $ 9006, 000 in this area

State unemployment rates, by race/ethnicity and overall, 2024 Q2

Private security team	The security team is mainly for security at the entrance of the school building and assisting student chec k-in in the morning.	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school. "Because no one wants to take responsibility. No one wants to take responsibility, but that is important. Heades said. "To change the system, you have to change the organizational culture. That is the most difficult."	This issue also affects the restoration of the district, which was implemented as part of the recovery process. According to a drop in school, the high schoo l-level youth participating school expert (YESS) team is rarely arranged in the absence, employee retirement, or vacancy.	Nevertheless, the preliminary data on disciplinary cases and its cancellation indicates that the Yess program is changing. Between September 2023 and 2024, elementary schoo l-level cases decreased by nearly 16 %, and Linton Junior High School cases decreased by nearly 36 %.	For the past two years, Penhills has invested more than $ 1. 7 million in the Yess program and was first implemented in Linton in FY2020-2021. The staff are trained in diescalation and mediation skills.
Officials in the district said on Thursday that this restorered justice program would be introduced.	Alliance with Presley Ridge	The partnership with will be held i n-house next year.	According to Pen Hills's Assistant Dawn Golden Education, "I emphasize that the appropriate human resources are involved with the children when considering that the school district is to carry out programs in the school. I want that. "	The district has also changed the school suspension model to a New Directions program, and has been a therapeutic counseling for disciplinary actions to deal with the root cause of inappropriate behavior. This year, $ 9006, 000 in this area	Private security team
The security team is mainly for security at the entrance of the school building and assisting student chec k-in in the morning.	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	Charter tuition will account for 22% of expenses in the 2023-2024 school year, second only to salaries.	"From a purely financial standpoint, the biggest threat to Penn Hills is getting control over the cost of charter schools," he said. "Until they can get control of that, we have to keep our breaths down."	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.
"It's not about knocking on doors once," he said. "It's about doing it repeatedly, following up, following up again, and building relationships."	Charter tuition will account for 22% of expenses in the 2023-2024 school year, second only to salaries.	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	Matsuoka said offering salary incentives has enticed about 25 teachers to participate for the summer break. With more teachers participating, the district hopes it can attract more students back.	Even if progress is made, school leaders say that without an effective strategy to control charter school enrollment, further property tax hikes and program cuts will be inevitable.	EPI analyzes national and state racial and ethnic unemployment rates and racial and ethnic unemployment disparities every quarter to create a consistent sample and produce reliable and accurate estimates of racial and ethnic unemployment at the state level.
We report estimates for all states and subgroups, but mark with an asterisk (*) states whose unemployment rates are heavily weighted by national-level data (see methodology). The analysis below includes data for the second quarter of 2024.	Private security team	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	The U. S. economy is in good shape in Q2 2024, despite a softening labor market compared to the previous quarter. The national unemployment rate rose from 3. 8% in the first quarter to 4. 0% in the second quarter of 2024. Washington, DC, and California had the highest overall unemployment rates at 5. 3% and 5. 2%, respectively, while North Dakota and South Dakota both maintained the lowest unemployment rates at 2. 0%.	In the second quarter, the unemployment rate rose slightly month over month, even as the labor market continues to add jobs. This movement indicates an increase in the labor force: more people are working and looking for work than before. Moreover, the unemployment rate of 4% itself is historically low, if not as low as the record lows of last year. We continue to experience the strongest labor market in recent memory.	Highest: California (5. 3%), Neb (5. 2)
Lowest: North Dakota, South Dakota (2. 0)	Private security team	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	Interactive Map	State	Highest: California (5. 3%), Neb (5. 2)
White	Interactive Map	Hispanic	AAPI	United States	4. 0%
3. 2%	4. 0%	5. 0%	3. 4%	Interactive Map	3. 0%
2. 5%	4. 5%	Alliance with Presley Ridge	2. 5%*	Alaska	4. 5%
2. 7%	In the second quarter, the unemployment rate rose slightly month over month, even as the labor market continues to add jobs. This movement indicates an increase in the labor force: more people are working and looking for work than before. Moreover, the unemployment rate of 4% itself is historically low, if not as low as the record lows of last year. We continue to experience the strongest labor market in recent memory.	5. 2%*	3. 5%	Arizona	3. 4%
3. 0%	5. 2%*	3. 9%	2. 8%*	5. 2%*	3. 4%
2. 9%	The partnership with will be held i n-house next year.	4. 3%*	Interactive Map	California	3. 4%
4. 8%	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	5. 2%*	3. 8%	"From a purely financial standpoint, the biggest threat to Penn Hills is getting control over the cost of charter schools," he said. "Until they can get control of that, we have to keep our breaths down."	3. 8%
3. 1%	5. 2%*	5. 0%	Even if progress is made, school leaders say that without an effective strategy to control charter school enrollment, further property tax hikes and program cuts will be inevitable.	4. 5%	Highest: California (5. 3%), Neb (5. 2)
4. 0%	3. 5%	In the second quarter, the unemployment rate rose slightly month over month, even as the labor market continues to add jobs. This movement indicates an increase in the labor force: more people are working and looking for work than before. Moreover, the unemployment rate of 4% itself is historically low, if not as low as the record lows of last year. We continue to experience the strongest labor market in recent memory.	3. 5%*	2. 8%*	4. 5%
3. 3%	4. 9%	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	3. 3%*	Even if progress is made, school leaders say that without an effective strategy to control charter school enrollment, further property tax hikes and program cuts will be inevitable.	3. 3%
2. 6%	3. 8%	3. 3%	2. 7%*	Georgia	3. 2%
1. 9%	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	2. 7%*	"From a purely financial standpoint, the biggest threat to Penn Hills is getting control over the cost of charter schools," he said. "Until they can get control of that, we have to keep our breaths down."	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.
3. 3%	4. 7%*	The partnership with will be held i n-house next year.	2. 8%	Idaho	3. 3%
3. 1%	5. 2%*	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	2. 8%*	Illinois	4. 5%
3. 7%	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	3. 8%	3. 8%	Georgia	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.
6. 4%	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	North Carolina	Private security team	2. 7%	3. 2%
3. 8%	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	4. 7%*	1. 6%	Private security team
2. 6%*	Alliance with Presley Ridge	1. 6%	4. 2%	3. 5%	2. 7%
5. 5%*	3. 8%	Oklahoma	State	4. 5%	3. 2%
4. 3%	3. 8%	3. 3%	1. 6%	4. 5%	3. 2%
4. 7%	EPI analyzes national and state racial and ethnic unemployment rates and racial and ethnic unemployment disparities every quarter to create a consistent sample and produce reliable and accurate estimates of racial and ethnic unemployment at the state level.	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	3. 4%	2. 8%	5. 6%
6. 4%	5. 0%	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	4. 2%	3. 3%	6. 7%*
5. 7%	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	North Carolina	3. 4%	4. 5%	5. 6%
4. 3%*	Illinois	4. 5%	2. 0%	1. 7%	2. 8%*
2. 5%*	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	3. 9%	3. 4%	3. 0%	5. 6%
3. 7%*	4. 7%*	4. 9%	4. 0%	Charter tuition will account for 22% of expenses in the 2023-2024 school year, second only to salaries.	Hispanic
4. 6%	4. 0%	5. 0%	2. 9%	4. 9%	3. 0%
4. 1%	4. 5%	5. 0%	2. 1%	2. 0%	3. 3%*
2. 6%*	1. 6%	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	2. 8%*	4. 0%	5. 6%
3. 3%	North Carolina	Washington	"From a purely financial standpoint, the biggest threat to Penn Hills is getting control over the cost of charter schools," he said. "Until they can get control of that, we have to keep our breaths down."	6. 7%*	7. 1%*
7. 4%	4. 5%	5. 2%*	5. 3%	2. 5%	4. 5%
5. 4%	EPI analyzes national and state racial and ethnic unemployment rates and racial and ethnic unemployment disparities every quarter to create a consistent sample and produce reliable and accurate estimates of racial and ethnic unemployment at the state level.	5. 0%	2. 5%	4. 2%	6. 9%*
5. 3%*	4. 5%	5. 2%*	2. 9%	Alaska	3. 4%
4. 4%*	Private security team	3. 8%	4. 2%	2. 0%	6. 9%*
5. 3%	4. 5%	4. 0%	Source Labor Statistics Bureau Regional unemployment statistics (LAUS) Data and Population Dynamic Survey (CPS) EPI analysis of data.	To embed this chart on the website, copy the following code:	California
The bond yield in the second quarter of the performance turned up after the expected inflation rate at the beginning of the year, but later declined as the growth rate and inflation ratio increased. The low quality credit performance was the best because the spread of the taxable sector was expanded and the spread of local bonds was reduced.	Private security team	3. 3%*	4. 2%	State	6. 9%*
We ask that question all the time. But getting the right answer requires evaluating potential market outcomes that go well beyond the base case. For us, constructing an optimal portfolio starts with a detailed analysis of various economic scenarios. A probability-weighted approach provides a better basis for identifying opportunities and managing risks.	North Carolina	We are at a turning point in the economic cycle, which we believe is a historically favorable environment for higher quality bonds. While we see near-term economic downside risks as low, we are mindful that a prolonged period of restrictive policy rates poses risks to the most vulnerable bond sectors, where most of the positive news is priced in.	3. 3%	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.	7. 1%*
Source: U. S. Treasury: Source: U. S. Treasury	Despite these improvements, more than 320 students have decreased in the past six years, choosing many families to attend a local charter school.	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	The district has also changed the school suspension model to a New Directions program, and has been a therapeutic counseling for disciplinary actions to deal with the root cause of inappropriate behavior. This year, $ 9006, 000 in this area	Georgia	6. 7%*
Stable growth, sticky inflation, and the solid but gradually normalized labor markets match the market view that policy rates are likely to stop over the long term. Our basic views are that most of the Fed is unchanged, even if the Fed is not all of this year. The data depends on the data, and the data indicates that the Fed is too early for the Fed to start interest down.	Alliance with Presley Ridge	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	2. 0%	4. 7%*	3. 8%
In our view, the interest rate market has a more appropriate price for its uncertainty, but the lo w-quality segment of credit is not.	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	Oklahoma	Outside the US, we see opportunities in interest rate markets around the world. We continue to hold a short position in the Japanese 10-year government bond. We are also long Spain and Greece and short France and Germany.	5. 2%*	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.
Source: Bloomberg, as of June 30, 2024.	Past performance does not guarantee future returns.	North Carolina	3. 4%	6. 7%*	High yield bonds are more vulnerable in either scenario, and spread premiums are too small to justify a large allocation.
With spread valuations stretched, our strategy is biased toward higher quality credits, focusing on maximizing yield while reducing the portfolio's sensitivity to broad market risks. Opportunities exist at the front end of the curve, including financials, investment grade emerging markets and asset-backed securities.	Its biggest competitors are nearby Propel Charter School and Penn Hills Charter School of Entrepreneurship. School leaders plan to open a high school campus, called Dominus High, in 2025. "We're concerned they'll attract another 20 or 25 students per grade," he said. "But that remains to be seen." For now, Matuk said the district is committed to investing in the middle school to bring back eighth-graders and their families, including a $12 million school building renovation. "But we want to make it as attractive as the other two schools." The district also hopes to win back more families through another round of door-to-door canvassing this summer. Five teachers canvassed doors last year with the district's public relations staff and AIU.	3. 3%	4. 5%	5. 2%*	Past performance is no guarantee of future returns. You cannot invest directly in an index, so index performance is not an accurate representation of any particular investment.
Positioning a Taxable Portfolio	3. 5%	4. 7%*	Matsuoka said offering salary incentives has enticed about 25 teachers to participate for the summer break. With more teachers participating, the district hopes it can attract more students back.	Neutralize duration and increase exposure to 10-year Treasury yields toward 4. 5%.	1. 6%
European Central Bank (ECB) delivers "hawkish rate cut" due to improving growth and rising inflation.	1. 7%	Declining enrollment has led to a reduction in the number of classes per grade for each of the past four years. According to the withdrawal petition, one in four school-age children in the area attend schools outside the Penn Hills School District.	Short Japanese 10-year JGBs.	2. 8%*	Spreads remain in fair value range of 40bp-60bp.
Largely long real money and dealer positions.	4. 5%	4. 5%	Spreads widened slightly but supported by strong demand.	2. 7%*	4. 5%
Opportunities also in BBB industrials and front-end financials.	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	3. 3%	2. 9%	2. 8%	So the district is working with outside partners to try to bring back students who have left the district to attend charter schools. Working with Allegheny Intermediate Unit (AIU), teachers went door-to-door last summer and were able to re-enroll 99 families.
Considering the spread, even if the average is lower than the average, there is almost no protection against the disadvantageous results.	However, the current softening of the labor market, combined with slowing inflation, means there is still room to boost the economy to further growth. Economic growth in the second quarter was better than expected at 2. 8%, but with interest rates at their highest in the past 20 years, a rate cut could create room for new activity to push down the unemployment rate (the housing market in particular could benefit from easing interest rates). (The housing market in particular would benefit from easing interest rates). We all know that a tight labor market is essential to closing racial disparities in unemployment rates, so lowering interest rates further could help close longstanding employment disparities.	Oklahoma	Spreads remain in fair value range of 40bp-60bp.	1. 7%	3. 2%

Choose a more defensive bond with high economic resilience.

The valuation is attractive. ABS and CMBS are cheaper than Ig Corporation.

The cautious attitude has not changed, but the commercial real estate market has shown signs of stabilization, and the amount of transactions has begun to recover.

Active Fixed Income Perspectives Q3 2024: The high road

Add low fluid ABS that provides more attractive spreads compared to risks.

Key highlights

In CMBS, 5-year bonds are also attractive on absolute bases and relative bases with hig h-rated corporate bonds.

Municipal is more likely to provide higher ta x-exempt income than in the past 10 years. Some lo w-ranking sectors, such as higher education, will still be on credi t-related issues, but most of the market shows solid fundamentals. The next movement of the Fed is more clear to the rate of interest rates, and investors can have a bright outlook for local bonds for the next 12 months.

Customers who have heard that the issuance of new local bonds in 2024 is declining, often receives questions about issuance. This is a subtle problem that affects other aspects of local bond investment.

Surprisingly, the cumulative amount in 2024 is much more than in recent years until June 30. The annual issue of "normal" in this market is ambiguous because various yield environments and tax reforms are cloudy, but the amount of clearance exceeding the standard level is meaningful: this time last year. Compared to 42 % compared to the highest ever, it was 12 % compared to 2015 (until June 30, the same year).

Source Bloomberg, as of June 30, 2024.

Taking the high (quality) road

At the same time, municipal bond fund flows have remained mostly positive throughout the year. According to our traders, total demand for new issues has been intense, with many new issues oversubscribed by many times.

One might assume that this would create a natural balance, with a large supply being met by healthy demand. However, these high-level data hide the fact that there is very little issuance from the middle tier of municipal bonds (A to BB rated bonds). For example, BBB represents less than 6% of the Bloomberg Municipal Bond Index. A robust supply of such bonds is far from guaranteed at any given time.

In the municipal bond world, funds are the primary buyers of low and mid-rated bonds. As a result, inflows into these products have a strong impact on credit spreads. And because both long-term and high-yield funds are primarily focused on longer-term bonds, demand for these products tends to have a significant impact on spreads in that segment of the curve. Shorter-term funds are impacting the spreads at the short end of the curve in a similar way.

As we noted last quarter, recent fund buying has been concentrated in longer-term and higher-yield municipal bond funds. This general trend has continued since the beginning of 2023, but demand for high-yield funds has been particularly strong since the start of 2024. At the same time, short-term muni funds have experienced significant outflows. This combination has caused credit spreads to widen significantly, resulting in greater opportunities at the short end of the curve.

Yields well above inflation

Source as of May 31, 2024.

Source: Morningstar, Inc: Bloomberg Indexes as of June 30, 2024.

Treasury par real rates curve

Past performance is no guarantee of future returns. You cannot invest directly in an index, so index performance is not an accurate representation of any particular investment.

Meanwhile, valuations of higher-rated money market bonds at the short end of the curve remain very rich relative to Treasuries. As long as SMA managers, who tend not to emphasize relative value, continue to buy securities in this segment, there is little reason to expect valuations to improve.

Fixed income sector returns and yields

Relative to Treasuries, tax-exempt bond yields will still be favorable for many high-income earners at the long end of the yield curve.

Local bond publishers are supported by economic stimuli measures during the pandemic period and continue to show strong balance sheets. Despite the fact that this time is being lost, cautious financial decisions continue to contribute to rating activities. The downgrade has fallen for a while, but the upgrade has been increasing, especially in the fourth quarter of 2023. The role of our active manager is to ahead of rating changes, but the aggregate data shows the continuous strength of this sector.

Source Bloomberg Intelligence, as of May 20, 2024.

Posculation of dut y-free portfolio

Rates and inflation

Technical and supported environments are an overwhelming credit overweight.

With shor t-term funds leaked and demand for lon g-term funds increased, AAA Municipal spleds are the most attractive curve short ends.

Maintain the exposure of sector sectors such as housing and prepaid gas.

Selectally add a negative headline sector (university, etc.) exposure.

Rates of inflation (previous three months, annualized)

The primary market is rich in screening, so we will increase the use of the secondary market.

Portfolio positioning and strategy

Focus on valuations in a situation where many investors are simply trying to maximize yields.

Historical diverse coupons and high yields will place convexity management at the center of risk management and Alpha opportunity.

• Under weight of 4%coupon.

Rates

Overweight a lo w-priced low coupon and overweight 5%coupon.

• If there is no clear fluctuation in local bond yields, duration will be mainly used as a credit hedge.
• The valuation of hig h-rated bonds is historically rich until 10 years of purchase of SMA.
• Overweight with the duration in proportion to the risk contribution from credit exposure.
• In order to utilize the roll-down effect on SMA demand, the exposure of cash and the 12-15-year bond is heavy, and the barbell curves are positioned.

Treasury yields shifted lower in the second quarter

Vanguard Active Bond Fund and ETF

Vanguard Active Bond Fund and ETF

Credit

Admiral ™ stock or ETF ticker symbol

Expense rate 1

• Ministry of Finance/ Government Organization
• GNMA 2

VFIJX

0. 11%

High-yield corporate spreads above investment-grade well below five-year averages

Vanguard Active Bond Fund and ETF

Yields remain higher than long-term averages

VAIPX

0. 10

Source Bloomberg Intelligence, as of May 20, 2024.

VFIUX

Taxable portfolio positioning

1. 0. 10
2. Lon g-term Finance Securities
3. Vusux

1. 0. 10
2. Shor t-term federal bond

1. Vsgdx
2. 0. 10

1. Shor t-term Finance Securities
2. Vfirx

1. 0. 10
2. Investment qualitative bonds
3. Core bond

1. Vcobx
2. 0. 10%

1. Core Bond ETF
2. VCRB
3. 0. 10

1. Core Plus bonds
2. VCPAX
3. 0. 20

1. Core Plus Bond ETF
2. VPLS
3. 0. 20

1. Mediu m-term investment qualification
2. VFIDX

1. 0. 10
2. Lon g-term investment qualification 2
3. Vwetx

1. 0. 11
2. Mult i-sector income bond

1. VMSAX
2. 0. 30

1. Shor t-term investment eligible
2. VFSUX

Municipal bonds

0. 10

Record supply is balanced with strong demand … or is it?

Ultra shor t-term bond

Vusfx

Tax-exempt municipal issuance by year

Vanguard Active Bond Fund and ETF

Ultra short bond ETF

Vusb

Demand affects credit spreads

0. 10

Under investment eligibility

Flows into long and intermediate funds, outflows from short-term funds

High Yield Corporate 2

Municipal spreads: BBB yields minus AAA yields

VWEAX

Source Bloomberg Intelligence, as of May 20, 2024.

Global/International

Emerging Markets Bond

An asset class still on the uptrend

VEGBX

Monthly total borrowers downgraded and upgraded

0. 40%

Global Credit Bonds

Tax exempt portfolio positioning

1. VGCAX
2. 0. 25

1. Vanguard Active Municipal Bond Fund
2. Admiral™ Stock or ETF Ticker Symbol
3. Expense Ratio 1
4. Domestic municipal bonds

1. Very short-term tax exempt

1. VWSUX
2. 0. 09%

1. Limited-term tax exempt
2. VMLUX

1. 0. 09
2. Medium-term tax exempt

VWIUX

Vanguard active bond funds and ETFs

VWIUX	Long-term tax exempt	VWLUX
0. 09
High-yield tax exempt	VWALX	0. 09
State municipal bonds	California intermediate-term tax exempt	VCADX
0. 09%	California long-term tax exempt	VCADX
0. 09	Massachusetts tax exempt 3	VCADX
0. 13	New Jersey long-term tax exempt	VCADX
0. 09	New York long-term tax exempt	VCADX
0. 09
Ohio long-term tax exempt 3	VOHIX	0. 13
Pennsylvania Long-Term Tax Exempt	VPALX	VCADX
Active Fixed Income Team	Global Head of Fixed Income Group	View Biography
Global Head of Fixed Income Group	At Vanguard since 2019	View Biography
Sarah Devereux is a Principal and Global Head of the Fixed Income Group. She is responsible for overseeing investment activities in the interest rate-related sector of the taxable fixed income market, including foreign exchange. Prior to joining Vanguard, she was a Partner at Goldman Sachs Securities, where she spent over 20 years trading and selling mortgage-backed securities and structured products. Prior to that, she worked at HSBC in risk management advisory and interest rate derivative structuring. She began her career as an actuary at AXA Equitable Life Insurance. She holds a BS in Mathematics from the University of North Carolina at Chapel Hill and an MBA from the Wharton School at the University of Pennsylvania.	Global Head of Credit	VCADX
Global Head of Credit	Vanguard since 1990	In the industry since 1990
As Global Head of Credit and Rates, Christopher Allwine oversees portfolio management and trading teams across active corporate, structured and emerging market fixed income portfolios in the U. S., Europe and Asia Pacific. He joined Vanguard in 1990 and has more than 20 years of investment experience.	Previously, he was in charge of the Vanguard's local bond group. He led a team consisting of 30 investment professionals and operated more than $ 90 billion in 12 local bond funds. He has been in multiple duties through a career in the bond group. He has experience in trading, portfolio management, credit and research. Portfolio management experience extends to both the taxable market, the local bond market, the active fund and the index fund. He is also a member of the Banguard's Investment Committee and is in charge of the development of a fund macro strategy.	Acquired a bachelor's degree in business management at Temple University and a finance master's degree at the University of Drexel. Chartered Financial Analyst® is qualified.
Global head of rate	View your background	VCADX
Worked in Vanguard since 2022	Engaged in the industry since 2000	VCADX
Official Bond Division	View your background	VCADX
Vanguard from 2005
Incumbent since 2005	Paul Malloi is the Director of Local Bond Investment Department in Vanguard. Before that, he was the head of the Vanguard Fix Income Group, Europe. In this position, Malloi managed a portfolio investing in bond assets around the world. He was also a director of Vanguard's European Credit Research Team. Joined Vanguard in 2005 and joined the Fix Income Group in 2007. In the past, he was in charge of the operation of Vanguard's US Bond ETF and the bond index investment trust.	Acquired a Financial MBA at the University of Pennsylvania Waton School, a bachelor of economics and financial at St. Francis University. CFA® charter holder.
Senior Investment Specialist
View your background	Senior Investment Specialist	Dan Larkin joined Vanguard in 2016 as a senior product manager of the Vanguard Portfolio Review Club, and monitoring each fund in the market, disseminating information on products inside and outside the company, and promoting product improvement. I am in charge of the support of the active tax bond product lineup, such as implementation.
Prior to joining Vanguard, he was the director in charge of bonds at the Manager Research Team of Nation Wide Financial, and was in charge of the coach and manager of the coach and manager of the Nation Wide su b-advised bond investment trust strategies. Before that, he was in charge of the Burarays Capital Vise President, and was in charge of the Burarn's portfolio management platform, the Point's Atlantic Ocean. He was in charge of a larg e-scale institutional investor customer, and was in charge of new business development, portfolio analysis, and relationship management. Before working at Barclays, he served as a mortgage securities analyst at Standard & Pours.	Get a finance bachelor's degree at James Madison University.	Active Bond Senior Investment Specialist

View your background	Long-term tax exempt	VWLUX
Tax bond AUM 19 fund/ETF 4
5 local bonds AUM domestic funds / 7 state funds	Credit research analyst	Ful l-time team member
Note: Data as of June 30, 2024.	Click here for the PDF version that is convenient for downloading the article.	Click here for more detailed expert insights:
Market Observation Market perspective: Inflation, growth, and monthly economic highlights will be delivered by vanguard Senior Economists every month.	Portfolio view: The latest information that the Portfolio Solution Team updates every month, and deal with issues that may affect your portfolio.	Click here for more detailed expert insights:
1 As described in the prospect of each fund. The current cost rate of the fund may be higher or lower than the displayed number.	2 Investment advisor: Wellington Management Company LLP.	Click here for more detailed expert insights:
Includes a fund that the 4 Wellington Management Company LLP advises.	For more information about Vanguard Fund or Vanguard ETF, see Advisors. vanguard. com/Investments/All, call up to 800-997-2798, get a prospectus or obtain a summary if you are available. Please do. Investment purposes, risks, fees, costs, and other important information about funds are described in the prospectus.	Click here for more detailed expert insights:
Past achievements do not guarantee future results. All investments are risky, including the possibility of a principal. Diversified investments are neither guaranteeing profits nor protection from losses.
Bonds in emerging markets are affected by political and economic risks and currency fluctuations in the country and region. These risks are particularly high in emerging markets.	Hig h-yield bonds generally have a high credit rate because of the middle or lower rating, so they have higher credit risk than a highly credit bond. The U. S. government of the Ministry of Finance and the government's securities is applied only to the original securities and does not prevent fluctuations in stock prices. Unlike stocks and bonds, the US Treasury Securities guarantees the principal and interest payments.	Ful l-time team member
Investing in bonds issued by companies outside the United States involves risks, including country/regional risk and currency risk.	Income from municipal bond funds is exempt from federal tax, but capital gains realized from trading in the fund or redeeming your own shares may be taxed. Some investors may be subject to state and local taxes and the federal alternative minimum tax on a portion of their fund income.	Click here for more detailed expert insights:
CFA® is a registered trademark owned by the CFA Institute.
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Active fixed income research team

Sara Devereux

Sara Devereux

Christopher Alwine, CFA

Christopher Alwine, CFA

Roger Hallam, CFA

Roger Hallam, CFA

Paul Malloy, CFA

Paul Malloy, CFA

Dan Larkin

Dan Larkin

Nathaniel Earle

Nathaniel Earle

Active fixed income at Vanguard

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130+

Active Fixed Income Perspectives

Vanguard perspectives series