Flush with cash from the state of Massachusetts, the Lawrence city schools last year spent $40,000 on ice skates for fourth-graders and $30,000 for bagpipe classes. School board members got their own personal laptop computers.
Yet the high school has no money for substitute teachers or equipment. Students are packed more than 40 to a class.
As a result, the school system - located in the poorest city in Massachusetts - is facing a two-pronged attack. New England's main accrediting agency is moving toward stripping Lawrence high's accreditation. And state officials, fed up with poor results and misspending of reform dollars, are considering the unprecedented step of taking over the schools.
"The accreditation issue is the straw that broke the camel's back," state education commissioner Robert Antonucci says. "There is a legal possibility the state could take over a district such as this."
It's a solution that is gathering favor as education reform efforts intensify around the nation. Schools are under increased scrutiny as everyone from President Clinton to impatient parents debate how to improve student performance. And faced with lagging results and wasteful spending, more states are taking on the role of superintendent and demanding results.
"Common sense tells you it's never very welcome," says Kathy Christie, who watches state trends for the Education Commission of the States in Denver. "But when you have a system that has been disfunctional over a period of time, there is a critical mass that needs to be moved. Someone needs to push that rock out of the way."
Until recently, states have typically honored the tradition of local control. That is changing as they have raised aid and expectations.
* In New Jersey last month, the state legislature passed the first-ever performance measure for local school districts. School districts will be given as much money as they need to meet academic standards, but the state will no longer match poor districts' budgets with wealthy school districts. The state of New Jersey, which has unusually strong powers, has taken over Jersey City, Newark, and Paterson schools after declaring them "educationally bankrupt."
* In Texas, the state is moving toward taking over the Wilmer-Hutchins district outside Dallas in the face of a multimillion dollar deficit and plummeting test scores.
* In Roosevelt, N.Y., last winter, state officials ousted the school board amid complaints of corruption and mismanagement, and installed a three-member panel.
The drastic measures are the result in many cases of well-intentioned reforms that have had disappointing results.
"In the old days, people assumed the money would be used to improve the schools," says Allan Odden, a school-finance expert at the University of Wisconsin at Madison. "Now they've gotten a little wiser. This is a new trend, and I think it's for the best."
Most states have undertaken wide-ranging efforts this decade to give more money to impoverished schools for everything from computers to teacher training. Twenty-three states faced with landmark court orders were forced to revamp their aid formulas to give poor communities more assistance.
At first, the states sent the aid with no strings attached. Most school districts spent the new money to replace decrepit buildings, develop preschool programs, and accommodate special education requirements.
"They used it where they thought the need was, but there wasn't much chance the money would be used to improve learning," Mr. Odden says. "Many times, the new money was used the same way the old money was used."
But when test scores and dropout rates remained at the bottom of the rankings, suburban politicians, conservatives, and school reformers began stepping in to demand change.
Whether stronger state controls will improve school performance is still unclear, some observers say, pointing to a spotty record. State receivers tend to blame the problems on management and ignore the more intractable problem of inner-city poverty itself.
"It works if there is overt corruption that needs to be cleared out," says Harvard education professor Gary Orfield. "But how many people from state capitals know how to run a big city school system?"
In Lawrence, Mass., the state pays more than 97 percent of the system's budget and has spent more than $200 million since 1993. The city spends less than $500,000 a year on the schools - almost what the high school spends on athletics.
Money is not an issue here," says Mayor Mary Claire Kenneth. "We have plenty of money, thanks to the state education reform."
Yet after five years of probation and warnings from the New England Association of Schools and Colleges, the high school lacks science labs and teacher training. In a school where 80 percent of students don't speak English at home, bilingual classes are virtually nonexistent, the accreditors found.
Superintendent James Scully waves away criticism, pointing to the district's rising test scores and failing dropout rate. "I thought education reform was supposed to be about results." Mr. Scully says. "We have got results."
But John Silber, chairman of the powerful state Board of Education, disagrees. "If a school is underperforming so badly it loses accreditation for its flagship school, the state cannot wait around," he says. "The state should appoint a receiver to bring it up to standards."