Pennsylvania’s highest court has agreed to hear an appeal by the Philadelphia School Reform Commission (SRC) from a lower court ruling that had prohibited it from unilaterally canceling its teachers contract.

Since 2001, the Philadelphia school district has been in “financial distress” as determined by the state’s Secretary of Education and has been operating under the direction of the SRC, which was charged with assuming control of the operation and management of the district.  In 2014, in order to save an estimated $44 million, the SRC voted to cancel its expired, though still effective, teachers’ contract after failing to reach an agreement on new terms for the teachers’ collective bargaining agreement. By canceling the contract, the SRC had hoped to negotiate a new contract that would no longer require the district to pay 100% of the monthly premiums for teachers’ and their families’ medical coverage, but would instead shift some of these costs to teachers through co-pays and deductibles.

Despite the SRC’s failure to reach an agreement with the teachers’ union after 21 months of negotiation and over 120 formal bargaining sessions, the Commonwealth Court found that the parties had not reached a “point of impasse” and, therefore, the SRC was not entitled under Pennsylvania law to make unilateral changes to the contract.  Nor was the SRC statutorily entitled to make such unilateral changes to the contract, the court reasoned.

Meanwhile, as the beginning of the new school year approaches, Gov. Tom Wolfe and the Legislature still have not come to an agreement on a new state budget and on the level of education funding for the 2015-2016 school year. Last March, Gov. Wolf proposed a $400 million increase in funding for basic education, and a new tax on shale oil to pay for it. Senate Democrats have said that there will not be a budget agreement without a substantial increase in education funding, which had been substantially cut under former Gov. Tom Corbett’s regime.