The state panel that oversees Philadelphia's cash-strapped public schools abruptly canceled a contract with teachers on Monday, despite nearly two years of labor negotiations, and said teachers would have to begin paying for healthcare benefits.
The move, which a labor expert said was likely unprecedented in the United States, would free up $43.8 million for the district this school year. Next year, it is facing a $71 million budget shortfall.
The system's long-running financial woes have become a full-blown crisis over the past couple years, leading to thousands of layoffs, dozens of shuttered buildings and program cuts.
The move will affect the roughly 16,000 members of the Philadelphia Federation of Teachers, which represents teachers, assistants, nurses, counselors and others.
"Bringing health benefits in line with those received by other district, city and state employees will drive tens of millions to our classrooms," the chairman of the School Reform Commission, William Green, said in a statement.
The changes could save nearly $200 million in operating funds and $47 million in federal funds over the next four years, the commission said. Wages, work rules and other economic provisions of the PFT's bargaining contract were not altered.
Most of Philadelphia's teachers do not pay anything toward their health insurance. The new plan requires them to contribute between $27 and $71 from each bi-weekly paycheck, depending on salary, and goes into effect on Dec. 15.
Tom Juravich, a University of Massachusetts Amherst labor professor, said that canceling a public employee labor contract in such a manner is rare, if unprecedented.
"This idea of the state panel just simply canceling the teachers agreement, there is very little precedent in doing that," he said. "This is violating the whole collective bargaining process.
"This is hard bargaining tough politics. You can't send a stronger message than this," Juravich said.
The changes are likely to be challenged in court. PFT's president, Jerry Jordan, said the union would "pursue every legal recourse we have."
The ability to cancel the existing contract and impose new terms is unique in Pennsylvania to the commission and Philadelphia's schools, acting Secretary of Education Carolyn Dumaresq said in a statement.
"This is not an expansion of state authority and will not impact collective bargaining agreements in other school districts," she said.
Teachers, many of whom have seen their classroom support slashed and have paid for supplies out of their own pockets, have been working under their old contract, which expired in August 2013.
The president of the American Federation of Teachers, Randi Weingarten, said the move was an "ambush" by Republican Governor Tom Corbett, who is fighting an uphill battle for re-election in November.
Corbett said in a statement that it was time for Philadelphia teachers to "join the thousands of public school employees across the state who already contribute to their health care costs."
St. Louis labor lawyer Corey Franklin said that the sudden change was "likely a function of limited health insurance options available to the district upon its annual open enrollment."
(Reporting by Hilary Russ in New York; Additional reporting by Daniel Kelley in Philadelphia; Editing by Andre Grenon and Leslie Adler)