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The Philadelphia Board of Education approved the new teachers’ union contract on Thursday. But with the state budget still not finalized, members also voted to authorize borrowing to pay for it and other costs.
The new three-year contract includes annual 3% raises over three years and a one-time $1,400 bonus for all Philadelphia Federation of Teachers members. It also provides teachers with paid parental leave for the first time in district history, according to union officials, as well as an end to the controversial sick leave policy known as 3-5-7-9.
Board members voted unanimously to approve the contract. But they also warned the state budget impasse will cost Philadelphia students resources and opportunities.
“It’s a disgrace,” board member Joyce Wilkerson said of the budget standstill. “We need the funding, we need it now, we shouldn’t need to borrow.”
Board Member Whitney Jones said because of the stalemate “and the uncertainty it creates the district is being forced to borrow” more than three times what the board was expecting to borrow. The associated interest payments could soar to $30 million, board members said.
Accordingly, board members also voted 8-0 with one abstention on Thursday to approve the issuance and sale of notes totaling up to $1.55 billion. This money would be short-term borrowing and would need to be borrowed and repaid within the same fiscal year.
“The budget delays are costing our schools money that we do not have and it’s further limiting what we can provide to students,” Jones said.
The contract negotiated between the PFT and the district assumes an increase in school funding proposed by Democratic Gov. Josh Shapiro back in February. More than two months after the state deadline for lawmakers to pass a budget, they remain deadlocked. More than $1 billion in payments for K-12 schools across the state have already been delayed, according to the state department of education.
Philly schools are still awaiting $374 million according to the district’s Chief Financial Officer Michael Herbstman.
Without annual funding increases from the state, the district will likely need to borrow to be able to pay for the contract across all three years, in addition to its other financial obligations like payments to charter schools. The district is already staring down a growing budget deficit.
Herbstman told board members 53% of the district’s budget comes from state funding, and therefore “it’s not sustainable long term to continue to operate as normal without them.” The Philly school district is almost entirely reliant on state, city, and federal funding, as it is the only district in the state that can’t raise its own revenue.
Board Member Wanda Novales said “every week of the delay puts more pressure on our budget, and every dollar spent on interest is a dollar not spent on our kids.”
The $30 million that would go to paying interest on that borrowing would be equivalent to a little over 200 teacher salaries, Herbstman said.
Pennsylvania and Michigan are the only states that haven’t passed a budget this year. And school funding is a major area of disagreement in both states.
In Pennsylvania, where budget negotiations largely take place behind closed doors, Republican legislative leaders have proposed holding public education spending flat while floating increases in state dollars for private school vouchers and tax-credit scholarships. Democrats have rejected those ideas and education advocates have argued such proposals fly in the face of a court ruling that deemed Pennsylvania’s prior school funding system unconstitutional.
Carly Sitrin is the bureau chief for Chalkbeat Philadelphia. Contact Carly at csitrin@chalkbeat.org.
