Superintendent William Hite meets with a student outside of a new high school called The LINC, which stands for Learning in New Contexts, Monday, Sept. 8, 2014, in Philadelphia. (AP Photo/Matt Rourke)

The five-member reform commission that controls the cash-starved Philadelphia public schools announced on Monday that it was canceling its contract with the Philadelphia Federation of Teachers, and while it would continue to honor most contract provisions, it would change the package of health-care benefits and require all teachers to contribute to the health fund. The union said the commission’s action “has amped up a war on teachers.”

The Philadelphia School Reform Commission, in a surprise move, said that after 21 months of negotiating with the  Philadelphia Federation of Teachers, that it would abrogate the contract, which has largely remained in effect even though it actually expired in August 2013. The commission has unilaterally taken other steps to violate contract provisions, including stopping paying teachers for “step” increases.

The commission — which met in an early morning meeting on Monday that received virtually no publicity and at which there was no public testimony —  issued a statement saying that the move would allow for a savings of $44 million that would be put directly back into the schools. Superintendent William R. Hite was quoted as saying that the school district will continue to seek a comprehensive agreement with the union but that it was time for teachers to contribute to their own health benefits, just as other city workers do. Hite was quoted as saying:

“The fiscal stability created by these benefit changes will lessen the dire circumstances facing our teachers and students every day. We cannot further reduce central office and school budgets and continue to function.  These changes to the benefits package are consistent with those agreed to by nearly all other District employees, including principals, blue-collar workers and non-represented employees. We are committed to bargaining with the PFT to reach a new agreement and will continue pushing for a full, fair statewide funding formula.”

Starting Dec. 15, the District will require teachers and other union members — most of whom do not now contribute to health benefits —  to pay up to 13 percent of the cost of their medical premiums and reduce their choice of plans. The Notebook, an independent publication that covers city education issues, noted in its story that the reform commission will also “stop underwriting the union’s Health and Welfare Fund, which provides prescription, dental, vision and other benefits to active members and retirees. The District, which now pays $4,352 per member per year to the fund as required by the PFT contract, plans to provide the coverage directly to current employees but end benefits for retirees.”

American Federation of Teachers President Randi Weingarten issued a statement that said:

“Three weeks before the gubernatorial election, this surprise early-morning School Reform Commission meeting, lawsuit and notification to employees imposing a contract and compensation cuts can only be characterized as Gov. Corbett’s well-planned Hail Mary ambush. Corbett’s School Reform Commission has amped up a war on teachers and support staff, who have been the glue holding Philadelphia’s schools together. Clearly and recklessly, the SRC is trying to provoke a strike—since there have been no real negotiations since SRC Chair Bill Green was appointed by the governor. Green, in fact, has shown by his actions—spending his time and resources hiring lawyers and going to court—that the commission would rather attempt to impose a contract than work with teachers to figure out what is best for Philadelphia’s kids.

“Pennsylvanians will not be fooled: They know that Gov. Corbett has robbed Philadelphia’s schools of desperately needed funding. They know that teachers and support staff are doing everything they can to fill in the gaps. And they know we need new leadership that will reinstate a fair funding formula. Philadelphia’s children deserve better.”

The commission’s statement did not note that the district’s financial problems are actually a result of a deep slash in state funding for public education under the administration of Republican Gov. Tom Corbett. Last year 10 leaders of national and local civil rights groups released a letter that said,

The SDP faces a $300 million budget shortfall largely created by slashing state education aid by $1 billion, and abandoning a state school funding formula designed to increase resource allocations to the highest need schools and districts. Given the depth of this crisis, it is unfathomable that Pennsylvania would choose to build a $400 million prison in the Philadelphia area. The state’s irrational priorities, have led the SDP to close nearly two dozen public schools; dismiss nearly a thousand teachers, virtually all school counselors and other essential staff; curtail elective course offerings; and eliminate school libraries, causing irreparable harm to students.

The Notebook also wrote:

With this move to redirect funds to schools, the SRC is clearly trying to win back the perception that it, not the union, has the best interest of the students at heart. The PFT had been building sympathy in the two-year contract stalemate by emphasizing how teachers are coping with difficult conditions and dipping into their own pockets to buy supplies despite a pay freeze.

While teachers work very hard, Hite said, “This is the notion of sharing in the sacrifice as we’re trying to navigate tough fiscal times so we are able to provide children with the resources they need right now.”

Union leaders have repeatedly pointed out that Philadelphia teachers earn lower salaries on average than their suburban counterparts; one study put the figure at 19 percent less.

The District had for months called for a pay cut on top of the benefit changes, but recently backed off that demand.

Here’s the text of the announcement from the Philadelphia School Reform Commission:

PHILADELPHIA—Today, after 21 months of negotiations with no resolution, the School Reform Commission (SRC) recommended and approved changes to the Philadelphia Federation of Teachers’ (PFT) healthcare benefits package, allowing urgently needed funds to be reallocated to schools in the School District of Philadelphia. In order to achieve the savings from the benefit changes, the SRC exercised its authority to cancel the PFT contract with the School District.

“We are taking this action after the District has cut 5,000 positions, closed 31 facilities, reduced administrative costs to approximately 2.7 percent and cut spending by close to $1 billion and our city and state funders stepped forward to increased recurring funding by over $212 million,” said William J. Green, School Reform Commission chairman. “Philadelphia families have made extraordinary sacrifices: students come to school every day in buildings that lack critical resources necessary for teaching and learning. Bringing PFT health benefits in line with those received by other District, city and state employees will drive tens of millions to our classrooms.”

This action, which makes the PFT healthcare package comparable to other employee groups, will redirect $43.8 million to District schools over the course of this school year. In addition, the District will save an additional $10 million in federal funds that can be used to supplement instruction for its neediest populations. Over the next four years, those savings are projected to total $198.5 million in operating funds and $47 million in federal funds.

The contract changes do not affect other economic provisions of the PFT bargaining agreement and allow the District to avoid both salary cuts and layoffs at this time.

Dr. William R. Hite, Superintendent, emphasized that the District remains committed to developing a comprehensive agreement, including economic terms and work rules, with the union. However, with approximately $54 million in operating and federal funds hanging in the balance, Dr. Hite said he supported modifying the benefits and requiring contributions now.

“The fiscal stability created by these benefit changes will lessen the dire circumstances facing our teachers and students every day. We cannot further reduce central office and school budgets and continue to function,” said Dr. Hite. “These changes to the benefits package are consistent with those agreed to by nearly all other District employees, including principals, blue-collar workers and non-represented employees. We are committed to bargaining with the PFT to reach a new agreement and will continue pushing for a full, fair statewide funding formula.”

District schools opened the school year with status-quo budgets that maintained a level of insufficient funds impacting students’ access to basic resources and services. There have been cuts to direct supports for students, including school counselors and nurses. School operating budgets have been devastated, leading to inadequate funding of both office and classroom needs. Course offerings have also been directly affected by insufficient school budgets with schools forced to offer an ever diminishing number of arts, music, language and Advanced Placement courses.

The structural savings achieved by the changes to healthcare benefits and contributions are crucial since the District already faces a projected $71 million shortfall in next year’s budget and risks a $8 million deficit this fiscal year if the cigarette tax collection estimate falls within the Commonwealth’s tax revenue projection.

The majority of PFT members previously did not contribute anything for health coverage. The new benefit plan requires tiered employee contributions based on salary, ranging from $27 to $71 from each paycheck. The changes are scheduled to take effect Dec. 15.

Except as authorized by law or the SRC, the School District will continue to apply the terms of the agreement that expired Aug. 31, 2013 to manage its relationship with PFT-represented employees. The District remains fully committed to reaching a comprehensive settlement and new labor agreement with the PFT as soon as possible.

Here’s the text of the  October 2013 letter to Corbett from civil-rights leaders (with footnotes removed):

The Honorable Tom Corbett
Governor of Pennsylvania
508 E-Floor Main Capitol Building
Harrisburg, Pennsylvania 17120

Dear Governor Corbett:

On behalf of the undersigned civil and human rights leaders, we write to urge you to take immediate action to address the budget crisis in the School District of Philadelphia (SDP). This crisis quickly has become an embarrassment to the entire nation. Over the last several years, Philadelphia has become a cautionary tale for the rest of the country, illustrating the harm that occurs when political posturing and irresponsible budget decisions trump the educational needs of students, families, and communities.

The students attending Philadelphia public schools now face extreme and dire deficits in the most basic educational resources. The unwillingness of state officials to act compels us to join with local parents and advocates who are leading the effort to protect the fundamental right of their children to a quality education that prepares them for civic participation and productive employment.

As the birthplace of American democracy and the eighth largest school district in the country, the national implications of a failed SDP cannot be overstated. Philadelphia will play a central role in the course of our nation. By requiring more than 137,000 students, 85 percent of whom are students of color and 82 percent of whom are low-income, to go to schools with substandard resources, the state is knowingly jeopardizing their futures. These students are a critical part of our future labor force. They are the next generation of innovators and leaders. Without a high quality education, these students stand little chance of obtaining jobs that will enable them to earn a living wage in the 21st century economy.The citizens of Pennsylvania expect you to fulfill the state’s obligation to ensure a “thorough and efficient system of public education,”as guaranteed in Pennsylvania’s Constitution. The nation looks to you for your leadership to address immediately this moral, economic, and legal imperative.

The SDP faces a $300 million budget shortfall largely created by slashing state education aid by $1 billion,and abandoning a state school funding formula designed to increase resource allocations to the highest need schools and districts.Given the depth of this crisis, it is unfathomable that Pennsylvania would choose to build a $400 million prison in the Philadelphia area. The state’s irrational priorities, have led the SDP to close nearly two dozen public schools; dismiss nearly a thousand teachers, virtually all school counselors and other essential staff; curtail elective course offerings; and eliminate school libraries, causing irreparable harm to students.

We urge you to release immediately the $45 million in state funds previously appropriated to the SDP without condition. These emergency funds will enable the SDP to begin to restore essential teachers, staff, programs, and services. Further, we urge you to take immediate action, in collaboration with the SDP, to assess the need for additional state funds to ensure an appropriate level of teachers, librarians, guidance counselors, and other staff; ensure a proper curriculum and course offerings in all schools; and return class size to reasonable levels. Based on this assessment, we ask you to work with the Legislature to propose and enact a supplemental appropriation of state aid for the current school year.

Finally, in order to address the long-term funding needs of the SDP and other high need school districts in Pennsylvania, we urge your administration to launch promptly a process to update the state school funding formula adopted in 2007; enact that formula into law; and establish a multi-year phase-in to restore fair and equitable school funding to all students statewide. A funding formula based on the actual cost of meeting the state-adopted Common Core standards, and sufficient to enable all students to achieve those standards, is essential for the state to improve student outcomes in future years, especially for our most vulnerable and disadvantaged students.

What is happening in Philadelphia is a tragedy for our children. We risk losing yet another generation of children to the consequences of an inadequate education. By taking the steps outlined above, with your leadership, we can begin the process of restoring excellence to the Philadelphia public schools. Accordingly, we urge your administration and Pennsylvania legislators to join with local officials, parents, advocates, and community stakeholders to resolve immediately this crisis and then put public education in Pennsylvania back on track with an effective, fair and equitable school funding system. Investing in education is one of the single most important functions of government and forms the bedrock of our democracy and the economy.

We request a meeting at your earliest convenience to discuss a solution to this crisis.

Thank you for your consideration.

Sincerely,

Rhonda Brownstein, Executive Director, Education Law Center – PA

Patricia A. Coulter, President & CEO, Urban League of Philadelphia

Phuong Do, Interim Executive Director, Southeast Asia Resource Action Center

Wade Henderson, President & CEO, The Leadership Conference on Civil and Human Rights

Benjamin Todd Jealous, President & CEO, NAACP

Jerome Mondesire, President, Pennsylvania State Conference of NAACP Branches

Marc Morial, President & CEO, National Urban League

David Sciarra, Executive Director, Education Law Center – NJ

Rorng Sorn, Executive Director, Cambodian Association of Greater Philadelphia

Brent A. Wilkes, National Executive Director, League of United Latin American Citizens