Philadelphia’s School Reform Commission will cancel their labor contract with the teachers union after nearly two years of negotiations, officials announced in a surprise meeting Monday morning.

The labor contract with the Philadelphia Federation of Teachers (PFT) was cancelled so that amendments can be made to the employee contributions regarding benefits, said SRC Chairman William J. Green -- a move that comes after 21 months of unsuccessful negotiation between the school district and the PFT.

The changes to the PFT's healthcare benefits package will allow for urgently needed funds to be reallocated to schools within the district, according to Green.

"The time has come for them to share in the sacrifices that everyone else had made," Green said.

The sacrifices that Green was referring to are concessions made by other staff within the district as well as students and parents.

“We are taking this action after the district has cut 5,000 positions, closed 31 facilities, reduced administrative costs to approximately 2.7 percent and cut spending by close to $1 billion and our city and state funders stepped forward to increased recurring funding by over $212 million,” said the chairman.

Changes to employee benefit contributions will provide nearly $44M to students this school year and almost $200M over the next four years, according to Green.

Previously PFT members did not pay for their health coverage. The new benefit plan requires tiered employee contributions based on salary. The changes are scheduled to take effect Dec. 15.

Superintendent Dr. William Hite followed up statements made by Chairman Green by emphasizing that the school district remains committed to reaching a new contract agreement with the PFT.

The announcement comes nearly a week after a $2-per-pack cigarette tax went into effect. The new tax will provide revenue for the cash-strapped district.

Pennsylvania Gov. Tom Corbett, who was very vocal in his support of the cigarette tax, released this statement shortly after the SRC meeting:

"Today's action by the SRC will effectively close the funding gap and provide the district with the ability to hire new teachers, counselors and nurses and secure educational resources that will benefit the students of Philadelphia."