Bart and Milhouse have to remain inside the Simpsons' house when an ozone hole moves over Springfield. The two dress up as ladies and jump on the bed, singing "Sisters Are Doin' It for Themselves". When Homer comes in abruptly, Bart falls off of the bed and lands on one of Homer's bowling balls and breaks his coccyx. Dr. Hibbert informs Homer and Marge that Bart will have to use a wheelchair until the bone has healed. When Bart arrives at Springfield Elementary School the following day, he finds that he cannot enter because the school lacks ramps for the disabled. As Principal Skinner considers a ramp for the school, mafia boss Fat Tony emerges and suggests that his construction company would be a good choice of company to build it. Although the new ramp system almost immediately collapses, Fat Tony informs Skinner that the construction supposedly cost US$200,000 and that the school will still have to pay. In response, Principal Skinner decides to close Springfield Elementary due to lack of funds (having used them to pay off Fat Tony and thus avoid brutal mob reprisals).
All pleas for financial help are in vain, including a private school play performed in front of Mr. Burns at his mansion, until Jim Hope, the president of a company named Kid First Industries, buys the school and privatizes it. The school's staff is replaced, and classes now focus on toys and marketing. Lisa soon discovers that the company that bought Springfield Elementary is a toy company, using students for research to make a new popular toy in time for the Christmas shopping season. She is then frightened by the appearance of a robotic figure. When Bart and Lisa are back at home, watching television, they see an advertisement for a toy named Funzo. It has many features suggested by Springfield Elementary students during a brainstorming session at the school. They visit Jim Hope's office to complain, and he apologetically gives them a free Funzo toy. Bart and Lisa later discover that Funzo is programmed to destroy other toys.
On Christmas Eve, with Homer's help, the two steal all the Funzo toys from underneath every Christmas tree in Springfield with the intention of burning them in the town's long-running tire fire. However, Gary Coleman, who is a security guard at Kid First Industries, comes to stop them. The two parties argue all night until the next morning when they settle down into civilized discussion about the commercialization of Christmas. Coleman changes his opinion about the toy company and helps the Simpsons destroy the remaining functioning Funzo toys that were not destroyed in the tire fire. Afterwards, Homer invites Coleman to Christmas dinner at the Simpson family's house, where Mr. Burns shows up after deciding to donate money to Springfield Elementary following an epiphany he had that night.