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Budget & Finance

Philadelphia Union Offers to Skip Raises; District Says Not Enough

By Lesli A. Maxwell — August 28, 2013 2 min read
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As the Philadelphia school district struggles to fill a $304 million budget gap before it opens schools on Sept. 9, its leaders say that a new offer from the teachers’ union to forgo salary increases and make changes to health care benefits falls short of the concessions necessary for financial stability.

This morning, Philadelphia Federation of Teachers President Jerry Jordan announced that the union would recommend that its members agree to skip raises for one year and make changes to health care benefits, which would likely include raising employees’ contribution levels to their health insurance. (The offer on health care contributions, as my colleague Stephen Sawchuk points out, is likely a nod to the coming excise tax under Obamacare for employers who provide the so-called high-cost, or Cadillac health plans that many unionized employees currently enjoy.)

The district and the union have been negotiating a new contract—the current agreement expires this weekend. District leaders have been pushing for more than $100 million in concessions from the union, including pay decreases, as part of a larger bailout package that includes a $50 million infusion of cash from the city of Philadelphia. That emergency cash is what district officials said was the bare minimum necessary to open schools safely and on time.

“We know that at current staffing levels the school district cannot assure parents, students, and employees that schools will be safe and more than just ‘functional,’” Jordan said in a statement. “Every child deserves access to a counselor, a school nurse, a librarian, and other services in their schools.”

Responding to Jordan’s announcement, district spokesman Fernando Gallard said in a statement that the union’s proposal lacked specifics but that it “appears to fall well short” of the $103 million in salary and benefit concessions that the school system says are necessary to provide essential services to students.

The Philadelphia school system has been mired in financial crisis for months. Earlier this year, the district closed 27 schools and laid off thousands of teachers and support staff to address the budget shortfall. The district must also figure out how it can meet pension obligations for retired employees in the middle of the budget crunch. Many experts and advocates say Philadelphia’s fiscal woes won’t be fully resolved until the Pennsylvania school aid formula—long criticized as one of the most inequitable—is overhauled.

Philadelphia Superintendent William R. Hite, Jr., has been aggressive in painting a grim picture of what will happen in the district if more resources aren’t forthcoming. Earlier this month, he issued an ultimatum that he would not open schools on Sept. 9 without the $50 million in emergency aid that would allow him to hire back roughly 1,000 of the nearly 4,000 staff members who were laid off.

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A version of this news article first appeared in the District Dossier blog.