Philadelphia
Federation of Teachers officials used millions of taxpayer dollars earmarked
for teacher health care to finance the operation of its troubled Center City
headquarters and offer free rent to at least one tenant, a Watchdog
investigation has revealed.
While
this does not appear to be illegal, it does put unnecessary financial strain on
the School District of Philadelphia, which faced an $80 million deficit less
than a year ago. The district looked to restructure teacher health benefits as
a way to close its budget gap. Philadelphia teachers do not pay for health care
and the union has refused to offer any concessions there.
“Once
again, it’s evident that PFT leadership is putting its own political interests
over the well-being of teachers and students,” James Paul, a senior education
policy analyst at the Commonwealth Foundation, told Watchdog. “While teachers
are working hard in the classroom, the union is secretly draining its insurance
fund for its own political gain.”
Every
year, the district is bound by its contract with the Philadelphia Federation of
Teachers to pay more than $69 million for employee health care
benefits.
The
payments come in increments of $167.41 per teacher every two weeks during the
school year, adding up to some $4,352 annually for each of the PFT’s 16,000
members. Those funds come from a pool of state and local taxes. The PFT’s Health and
Welfare Fund receives a chunk of that money, which is earmarked for
supplemental benefits, such as dental and vision, along with other programs
like life insurance and its annual educational conference, which will be held
in March 2016.
The
Watchdog investigation found that more than $6 million from that fund was
loaned, interest-free, to the union’s bleeding building fund, where it appears
to have been spent on building maintenance and upgrades. According to Internal
Revenue Service filings completed by the union, that money may never be paid
back.
Part
of the cash, loaned in five separate installments, was also used to subsidize
the rent of the Jewish Labor Committee.
The
JLC is a religious organization that calls itself “the voice of the Jewish
community in the labor movement.” JLC Regional Director Michael Hersch
confirmed the group did not pay any rent for office space at 1816 Chestnut
Street and it is now headquartered at 2100 Arch Street.
The
PFT did not respond to a request for comment.
The
PFT’s building fund is registered as the 1816 Chestnut Street Corporation. In
its Form 990 filed with the IRS in 2013, it states “The Philadelphia Federation
of Teachers Health and Welfare Fund has loaned monies, interest free, to the
Corporation for the acquisition of property and equipment and to meet operating
expenses with no definite terms of repayment. At August 31, 2013 and 2012 the
balance of the loan was $4,845,781.”
The
building fund, with expenses of $3.4 million, reported a deficit of more than
$3 million at the end of 2012. The union purchased the four-story building at
1816 Chestnut Street in 1973 for $475,000. PFT’s main offices are located
there, and also at a satellite office at 440 North Broad Street, that is
provided free of charge by the School District of Philadelphia.
The
school district has been on rocky fiscal footing for years. In October 2014,
the School Reform Commission, which has controlled Philly schools since a state
takeover in 2001, attempted to cancel its teachers contract. The
SRC sought to achieve cost savings in having teachers pay for their health
care, a change the district estimated would have saved upwards of $50 million
each year. Philly teachers currently pay nothing for health insurance.
At
the time, former SRC Chairman Bill Green had said, “Every single stakeholder
has stepped up to help the district close its structural deficit — the
principals, our blue-collar workers. Families and children have, too, through
the loss of resources, increased class sizes, and lack of materials. It is time
for the Philadelphia Federation of Teachers to share in the sacrifice.”
Green,
who was demoted as chairman by Gov. Tom Wolf earlier this year but remains one
of five SRC commissioners, did not respond to an interview request.
The
PFT challenged the cancellation in lower courts. The case is expected to be
heard by the Pennsylvania Supreme Court next year.
“It
seems like a questionable use of funds at a time of a budget crisis,” Paul
said. “It’s pretty outrageous that the PFT is using tax dollars meant for
teachers’ health insurance as a slush fund for its own political operation.
Especially in Philadelphia, where every year the leaders of the PFT speak in
Philadelphia or come to Harrisburg demanding more funds and more money
specifically for Philadelphia schools. But at the same time they’re demanding
more state dollars, they are overcharging for teachers insurance and using some
of that money to subsidize its own political operation.
“It’s
really a shell game that must end if we’re going to ensure tax dollars are
being used efficiently and wisely.”
In papers filed with the Pennsylvania Commonwealth Court
last year, the district said the Health and Welfare Fund, which has “built up a
large surplus,” is a massive financial burden. By restructuring its obligation
to the fund, the district argued it could achieve $22.4 million in savings
through a “School District-administered plan covering dental, optical, and
prescription drug benefits.”
Overcharging
the school district for these benefits, which are also available to so-called “ghost teachers,”
seems to contradict the union’s annual calls for more money for kids and their
education, said Gary Beckner, president of the nonunion American Association of
Educators.
“This
is precisely the kind of behavior that is driving teachers away from the union
in record numbers across the country,” Beckner said. “Teachers deserve a
professional organization that spends dollars wisely and only on member
benefits and services. Educators are no longer interested in paying high dues
to a hyper-political organization.”
Source: PA
Independent
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