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Fact-checking the District’s claims about the contract cancellation

Some statements were erroneous. Often the reality is more complicated than what has appeared in press releases and sound bites.

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

Last Monday, the School Reform Commission voted to cancel the teachers’ union contract and unilaterally change the health benefits for members of the Philadelphia Federation of Teachers. After that action, PFT president Jerry Jordan charged that several of the official statements about the contract situation were "lies."

Here is a look at some of the statements and issues in dispute, and what the Notebook has been able to find out about them.

“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."

This statement, attributed to Superintendent William Hite, was in the District’s press release last Monday. Mayor Nutter made the same claim in a statement, and SRC member Sylvia Simms took it a step further, telling the Inquirer, "Everybody is paying into their benefits."

In fact, the principals’ union is the only other School District union whose members are required to pay toward health benefits. They contribute 7 percent of premium costs. Blue-collar workers represented by SEIU agreed to wage givebacks in a contract negotiated in 2012, but do not have to pay toward benefits. Non-unionized central office employees do contribute 5 percent toward their premium; Hite’s cabinet members pay 7 percent.

School police and cafeteria workers both offer health plans that are free to members. And no District employees have a required employee contribution that is close to 13 percent of the premium cost, the rate being charged to PFT members who earn $55,000 or more.

However, principals and central office staff took pay cuts, as well as having to cover some of their benefit costs.

"PFT health care concessions offered in negotiations amounted to only $2 million."

District officials have maintained for the last several weeks that the union’s 2013 offer of health care savings in negotiations was not a significant sum. Jerry Jordan has responded that health care savings proposed by the union amounted to $24 million.

A partial explanation for the discrepancy: A District source said that the $2 million was a net figure because savings from the union’s health care proposal were offset by the costs of an accompanying union demand for restoration of "step" and "lane" increases. The PFT has said that restoring those increases would cost $17 million.

The monthly cost to PFT members for benefits will be "$26 to $67 for individual coverage and up to $200 for family coverage."

To begin with, these dollar amounts cited in an article by SRC Chair Bill Green are about 8 percent low, because they assume there are two pay periods a month and actually there are 26 pay periods per year.

But these figures also leave out a few key details. One important fact is that the standard health plan being offered has changed in order to save the District money. The new plan, called Modified Personal Choice 320, has higher deductibles and co-pays; for instance, it only covers 90 percent of the cost of hospitalization. A family could incur out-of-pocket costs as high as $12,700 per calendar year. Some teachers are saying that they feel compelled to buy into the more-expensive Personal Choice plan being offered by the union. Those who do upgrade would end up paying $2,100 a year for single coverage or more than $6,300 for family coverage.

The District has projected a combined net savings of $25.88 million per year from two changes to its medical plan — requiring employees to pay 5 to 13 percent of their premium cost and shifting union members into a cheaper plan. Those savings can reasonably be assumed to be costs passed along to employees. Divided over 11,500 union members, that means that on average, union members will be taking on more than $2,200 annually in new medical costs. Obviously, the amount for individual members will vary widely around that average amount. In addition, the District plans to charge $70 per pay period, or $1,820 per year, to employees whose spouses have other insurance but still opt into the plan.

The Caucus of Working Educators has done an analysis of the cost to employees of the various new health plan options.

"The union’s Health and Welfare Fund has a $45 million reserve."

District officials made this statement and contend that they can take over the fund’s vision, dental, and prescription plans for union members and operate them more efficiently. They plan to stop contributing the mandated $4,352 annual payment per member into the union fund and also discontinue the vision, prescription, and dental benefits available to retirees.

The PFT has contested the claim about the size of the reserve. In an email on Sunday, Jerry Jordan said the fund’s balance is now only $23 million, the net of $28 million in assets and $5 million it owes. The Notebook was not able to establish whose numbers were accurate, but the most recent public financial statement about the fund shows a $49 million reserve as of Aug. 31, 2013.

PFT officials say that the fund’s reserves are an indication of its efficient management. In 2011 the fund balance had climbed as high as $78 million, but in negotiations that year, the union agreed to defer $58 million in District payments to the fund and to get back only $28 million.

"The PFT has refused to make any meaningful financial concessions. After 21 months, the time has come for them to share in the sacrifices that everyone else has made."

SRC Chair Bill Green made this statement last Monday. Aside from the union’s health care proposal and a proposed one-year wage freeze, it is not known whether the union offered any other substantial financial concessions at the negotiating table. With talks at a stalemate, the "status quo" contract situation meant that teachers have not received an annual increase since January 2012.

But union members say that, due to the SRC’s actions since the old contract expired in 2013, they have had significant sacrifices imposed on them. For example, though funding has been eliminated for teachers to staff extracurricular activities and clubs, in many cases, teachers who used to be paid for that work have continued to fill those roles on an unpaid basis. Understaffing in schools means that some teachers are frequently covering classes during their prep or lunch periods. The lack of school funds for supplies has led to increasing out-of-pocket spending by teachers for classroom supplies and materials. Teachers who incurred tuition expenses prior to summer 2013, expecting those costs to be covered by increased compensation for credits or degrees earned, never received those pay increases due to a District-imposed pay freeze.