He's Either Ignorant, or Cynically Deceptive

[Elwood Community Network commentary distributed 3/1/11]

In [the March 1st edition of] Newsday, on page A3, there is another story about Governor Andrew Cuomo's attempts to prevent people from paying attention to the problems which Albany has created for school districts and other municipalities in the State of New York.

You see, if Cuomo can keep people focused upon minor issues, he can avoid dealing with the major problems that afflict us all, and which have been long established by previous Governors and previous Legislatures (from which some members do still remain).

What are these major issues?

First of all, pensions for public employees are what is known as defined benefit plans, and when the value of pension funds decline, the State forces the taxpayers of New York to come up with more tax money to add to the particular pension funds. Anyone who has not been asleep for the past twenty years, or simply watching American Idol instead of the news, understands that there is a financial crisis in most states which has been made worse by the cost of ballooning public sector pensions.

The pension system for public employees was created by NY State, and it is wholly governed by NY State; we, as school districts, have to do what NY State tells us to do, no matter how expensive, and no matter what else we and other districts might like to negotiate differently with our employees. As Mayor Bloomberg rightly, and succinctly, pointed out in his Op Ed piece in yesterdays' NY Times:

"...in New York, state government — not the city — has the authority to set pension benefits for city workers, but city taxpayers get stuck with the bill. The mayor cannot directly discuss pension benefits as part of contract negotiations with unions, even though pension benefits could be as much as 80 percent of an employee’s overall compensation. In addition, members of the State Legislature pass pension “sweeteners” for municipal unions that help attract support for their re-election campaigns."

What the Mayor says here, in language directed toward New York City obligations, is equally true for all municipal entities in NY State, including school districts.

Second, NY State has imposed hundreds of requirements, or "mandates," on school districts over the years. By itself that might not be bad, and few would dispute the need and benefits of some of these mandates, but the problem is that NY State -- over the past ten or so years -- has paid for less and less of these mandates. In some cases they are distinctly underfunded, and in other cases they are not funded at all.

Therefore, school districts have obligations imposed upon them by NY State, in some cases by law and in other cases by State Education Department regulations, and these obligations -- these mandates -- have very substantial costs associated with them.

So what is Cuomo, and some complicit State legislators, doing about this pension system, or about these mandates?

Diddly squat.

Nothing, nada, nichts, rien, nulla.

Oh, I'm sorry, they are trying to make us think that the compensation of senior administrators in school districts is our "real problem." And that is despite the fact that the total compensation of a school district superintendent is typically about 1/2 of 1% of a school district's budget.

Now Cuomo has come up with his latest attempt to pull the wool over the eyes of the people of this State, and some pathetic nebbishes are even following in his footsteps. Brilliant!

We are being told that no school superintendents in NY State should be paid more than the Governor.

So, instead of asking whether the Governor of the State should be paid more than $179,000 (I would suggest so, even though it is a supreme ego trip that all manner of politicians are willing to actively seek, regardless of the pay), we are being told that we should cap the salaries of those running districts throughout the State to $175,000.

Now, think very carefully about this concept.

Does the cost of living in Fredonia, forty-five miles southwest of Buffalo, have any substantial relationship with the cost of living in Syracuse, or in Albany, or in Plattsburg, or on Long Island? I spent many weekends in Fredonia, and its surrounding communities, prior to and during the course of my daughter's college career. I know, intimately, the cost of real estate, and services, and anything else, in that community. You don't have to be a retired corporate finance professional to understand that it would be absurd to have a single level of compensation, whatever the level, throughout NY State.

Next, the increasingly slippery Mr. Cuomo is suggesting, as Newsday wrote, that superintendent salaries "...be paid on a sliding scale based on student enrollment. Even at the largest school districts (defined as those with more than 6,500 students), salaries would be capped at $175,000 - $4,000 less than the governor."

Newsday goes on to report that "...superintendents at districts with 250 or fewer students would earn the least, $125,000, while superintendents at districts with more than 6,500 students would earn $175,000."

Now, do you find yourself asking "what's wrong with this picture?" I do.

First, why would there even be a district with 250 students? That sounds like a serious management problem in Albany, doesn't it?

Second, if you want to relate superintendent compensation to school district size, then shouldn't Cuomo and his friends in the Legislature be doing something about school district consolidation instead? Right now, consolidation is a permissive act; the State allows it under law, and even provides some financial incentive for it to happen, but it does not require it. Any student of economics or business management understands that there is an economy of scale, and that administrative costs spread over a larger number of students, allows for greater financial efficiencies (as well, by the way, as a greater array of course and student activities).

However, if Cuomo had his way, by restricting compensation in absolute terms, small and medium sized school districts on Long Island would suffer a massive number of retirements of the more talented and experienced (by the way, the two do not necessarily go together) superintendents and other senior administrators. Most are eligible for their pensions, already, and Cuomo's plan would provide a complete disincentive for them to remain in their current positions.

Therefore, Cuomo would be causing the "dumbing down" of school district administrations all across Long Island, as the best and the brightest pack it in, go on to teach in colleges, or take superintendent positions outside NY State, or simply redirect their lives to forgetting about rising at 5 AM, five days a week, 48 +/- weeks a year (in case you don't know it, superintendents and other senior administrators work during the summers) and enjoying their time with grandchildren, if so blessed.

But, either the Governor and his friends are totally ignorant of this likely damage, or perhaps they simply don't care, as long as you think that school district problems are not primarily Albany-created problems.

So, I would say to Governor Cuomo, and to those State legislators who have begun to drink the Albany equivalent of the Jonestown Kool Aid, that you need to first work on accelerating school district consolidation in NY State, at least on a Town basis if not on a County basis, before you ever destroy sound school districts with artificial "fixes" like compensation limits that would be unrelated to local costs of living (wherever, within NY State), and which would be further limited by the current size of a school district, since you -- Albany -- have allowed and even cooperated in seeing a proliferation of economic inefficiencies of scale, over a course of decades.

You don't destroy school districts, and then try to figure out what to do to mop up the spilled blood of terminated careers of some superior administrators, as well as allow ruined college prospects for high school students who must live through a collapse of their districts before those districts find a way to rise, Phoenix-like, to only benefit the next generation of students.

I would also say to the Governor and the Legislature, that you need to devote your efforts to reducing the underfunded and unfunded State mandates on school districts.

Cost containment must start in Albany, to reduce and even eliminate the Albany-created problems for all municipalities in NY State, including school districts.

Mayor Bloomberg gets it; Governor Cuomo either doesn't, or doesn't want to admit it. He'd rather create Red Herrings and point to some Straw-man, so that the people take their eyes off Albany.

As always, beware the smoke and mirrors, and do pay attention to that man behind the curtain; NY State, and the Land of Oz, seem to have some parallels.