The Empire Page

Background: On October 27, 2007 the delegates to the annual business meeting of the NYS School Boards Association passed a resolution creating a statewide task force to "explore and formulate ways for school districts to contain costs."  The task force headed by NYSSBA president Wayne Schlifke released its report and recommendations this past October.  The Empire Page talked to NYSSBA executive director Timothy G. Kremer about that report.

 

Q: The School Boards Association recently released a report with 55 recommendations focusing on "maximizing school district resources".  Those recommendations are organized into 13 categories. Does the scope of the report and the large number of recommendations tell us that funding public education in New York is in or is approaching a state of crisis?

A: For years, the New York State School Boards Association (NYSSBA) has fought for adequate and fair funding for educational programs that enhance student achievement without overburdening local property taxpayers.  We simply cannot succeed in our mission without a combination of adequate state funding, local financial support and prudent fiscal management by local school officials.

Given the severity of this fiscal emergency, a decision to protract the four-year plan that promised full state school aid increase is reasonable. There is real danger, however, in shifting unfunded state obligations onto the backs of school property taxpayers.  Couple that with proposed school property tax cap, and funding for public education in New York is, indeed, approaching crisis proportions.  At risk are successful educational programs for students who will eventually support the New York economy and drive our future.

Extraordinary times provide rich opportunities for systemic improvements. We cannot think of a better time to finally grant school districts the independence to operate free of outdated and burdensome state mandates.  School boards and property taxpayers need relief from externally imposed requirements that unnecessarily drive up the cost of providing an education.  NYSSBA's Maximizing School District Resources Report outlines 55 ways local and state taxpayers could contain costs. The report is intended to ignite serious and immediate discussions of ways to increase local authority and provide greater efficiency through significant operational changes.  Our task should not simply focus on cutbacks when so many opportunities for systemic reform present themselves.

 

Q: Given that the State is looking at a revenue shortfall for the remainder of the current fiscal year plus next year of $15 billion and that some of that may have to be made up in reduced aid to localities and given that school taxes are not likely to make up the difference, what can local school boards do to manage the crisis?

A: Education is one of the hardest hit areas in Governor Paterson's 2009-10 budget proposal.  Other big ticket items -- such as health care and higher education -- would still experience spending increases next year under the governor's proposed budget, while schools will experience a $700 million cut.  When the elimination of the planned $1.9 billion increase to schools in 2009-10 is added to the governor's proposed $700 million cut, the full impact of the governor's budget for next year is a $2.5 billion reduction from expected state aid levels.  On top of a state aid cut to school districts of anywhere from 3 to 13 percent, the governor proposes to eliminate several grant programs and pass on to school districts $154 million in additional costs related to preschool special education.

If enacted, these cuts will force school boards to go well beyond spending freezes and deferred maintenance. School districts expect cost increases next year in several areas, including pensions, health insurance and utilities.  Moreover, they must meet contractual obligations to employees, transportation contractors, food service contractors and building maintenance.  Therefore, most school boards will be forced to choose from two onerous options:  either cut programs or raise property taxes.  Some districts will have reserve funds available to help weather the storm, but they need to be careful not to spend down all their reserves in the first few months of what could be a multi-year economic downturn.  At a minimum, children in some communities will likely go without extracurricular activities, sports, art and music programs.  Academic programs could also be affected.

Beyond simply cutting budgets, school officials are fully engaged in discussions of expanded use of regional cooperatives for many business office functions such as procurement, payroll, banking, maintenance, transportation, energy, healthcare, negotiations, etc.  The business of delivering public education services is being reconfigured and streamlined to improve efficiency.  School boards are also watching warily for any legislative proposals that mandate consolidation of small school districts -- a practice that has not proven to substantially reduce costs.

On a positive note, we applaud the governor’s proposal to maintain universal pre-kindergarten funding, as well as building and transportation aid reimbursement levels.  Local communities that supported construction projects with the expectation of a certain level of state aid should not be penalized. We support the governor’s proposal to create a new Tier V in the state pension system to help curtail school district pension costs, which rose 56 percent on average from 2001 to 2006. We also favor the proposed exemption for school districts from the Wicks Law, as well as flexibility in procurement practices and the use of reserve funds.

Unfortunately, the governor's proposal does not offer solutions to address our #1 cost driver -- rising health insurance costs.  NYSSBA has supported recommendations such as creating a statewide health insurance pool, removing unnecessary obstacles to establishing health insurance consortiums, and requiring a statewide minimum employee contribution. 

School boards will fight for adequate state resources and additional flexibility to deliver sound education programs for their students.

 

Q: Let's turn to your association's list of recommendations.  Which in your view are the most pressing – i.e., the ones that you hope the Legislature and Governor look at first?

A:

1. Reaffirm by legislative approval the promise to increase state aid as set forth in the Campaign for Fiscal Equity (CFE) settlement agreement, albeit along a protracted timeline.  The state has provided record increases in state aid for the first two years of a four year plan via a revised foundation funding formula.  As a result, the average school tax levy statewide dropped from 7 percent pre-CFE to less than 4 percent during the past two years.  The four year plan is no longer feasible, but the constitutional right to adequate, equitable, predictable state support has not gone away.                                
2. Cap the local share of school district nondiscretionary costs.  Retirement system contributions, health insurance premiums, fuel costs and unbudgeted special education expenses fluctuate significantly from year to year.  The state could cap the local share of these costs at a reasonable growth rate and pay the difference, much as it does with Medicaid for counties. 
3. Provide full funding for all new and currently under-funded state and federal mandates, including special education.
4. Modernize employee compensation and benefits programs. At the very least, require employees to contribute to their pensions for as long as they remain on the school district payroll, rather than just 10 years, and create a single health insurance pool for all school employees along that requires a minimum employee contribution.
5. Freeze payments to employees working under an expired contract to payments authorized in the last year of the old contract. That would end the system under which teachers get longevity “step” increases automatically even when a new contract has not been ratified.  

 Part II of this interview will be published Sunday, December 28.