Well-Attended Budget Work Session, March 10th

[Elwood Community Network commentary distributed 3/15/11]

Overview:

The Board Budget Work Session drew a much larger crowd than usual, with part of that attendance as a reaction to the hypothetical discussion on March 3rd of how deep cuts might have to be if the District ended up with a Contingent Budget. It became a very candid discussion, and there there some interesting comments and questions from the dais, as well as from the sixteen residents who chose to speak during the subsequent Residents Remarks period. Clearly, this is a very complex issue with ramifications for the students, for staff, and for taxpayers.

Full Description and Background:

Last Thursday the District Administration and Board of Education held another Budget Work Session, and because of the large number of residents who attended (my estimation was 200 +), it was held in the Middle School auditorium.

Many people were there to demonstrate support for the athletic program and the co-curricular activities which the District provides for our students. It was not possible to determine whether or not all of them realized that the two page outline released on March 3rd -- in which Superintendent Peter Scordo had demonstrated just how deep personnel cuts would still have to be even if a number of very important and highly valued activities were eliminated -- was a discussion document, rather than an actual plan to completely eliminate athletics and many other programs and non-required expenditures.

Anyone who attended the March 3rd session should have understood that the draft was simply a demonstration of how deep the problems would be for the District, based upon existing labor contract costs and other expenses over which the District currently has little or no control, and how much cutting in personnel would have to be done even if such important activities were completely eliminated in order to achieve a Contingent Budget, should that become necessary.

But, whether or not Thursday’s attendees -- a great many of whom were not at the previous session -- understood the reality, it was clear that many were there to provide testimony to the importance of such activities to the students, and to their parents, and to many other taxpayers. To that extent, even if their understanding was imperfect, they may have provided a service to the Board and District Administration by making that point clear.

The entire base for the discussions to date was what amounted to a rollover budget, which was released a few weeks ago. What would have caused most heads to turn began with the size of the rollover budget increase which was largely related to State mandated increases for the two pension funds, and increases in health insurance costs, and increases in energy costs, and increases in transportation costs, as well as increased salary payments to existing staff based upon labor agreements already in place. That budget-to-budget increase, if it was to be a rollover budget, would have to be 8.86%.

But, for most people, what not only caused heads to turn, but for some to jump out of their chairs seeking oxygen, was the size of the tax levy increase that would be required for a rollover budget, namely 13.33%, and that would occur because not only was the State aid payment for Elwood not keeping up with the rapidly rising costs, we (and most other districts) would actually have a reduction in our State aid.

Albany’s Formula: Rising Costs - Lower State Aid = Local Travesty

So, the Board prudently asked the Superintendent to do some hypothetical runs to demonstrate the reality of what occurs when the State cuts our aid, even as costs -- some directly from the State, some indirectly from the State, and some directly from the marketplace of providers like energy producers and bus companies, as well as local personnel expenses.

That kind of modeling is necessary to begin a more detailed internal analysis, as well as generate some needed discussions.

With that rather lengthy preamble, which I believe is necessary for full and unemotional perspective, let me now turn to some remarks heard during the meeting.

Comments From District Administration and Principals:

First, the Superintendent spoke and gave a synopsis noting that we are not only facing a budget and funding problem for 2011/12, he also projected forward and indicated that if the Governor and Legislature do impose the proposed cap of 2% on any district’s tax levy, that would require additional cuts of $2.8 million for 2012/13, and $5.0 million for 2013/14, and it only gets worse after that.

So, drastic changes would have to be made both this year, and in future years, since this would be a multiyear problem in New York State.

EMS Principal Hugh Gigante and Glenn Principal Vincent Mulieri both made presentations regarding their own schools, and you can go to the District website and download each of those. You can also download the presentation by our Ass’t Superintendent for Curriculum, Maryann Llewellyn, which followed the remarks by the two principals.

BOE Trustees Comments and Questions:

Before opening up for Residents Remarks, Board President Mike Kaszubski gave each of the Trustees a chance to pose questions or raise issues.

Trustee Andrew Kaplan asked about the potential for giving up Full Day Kindergarten, which Mr. Scordo had mentioned earlier in the evening, noting that the savings for the District would be about $300,000. He asked for clarification about whether this would be the Extended Day Program we once had, or more traditional Half Day Kindergarten, and Executive Director Gene Tranchino (who now handles Transportation in addition to his Instructional Technology duties, since the Director of Transportation position was eliminated last year, for cost savings in this year’s budget) advised Mr. Kaplan that going to Half Day rather than Extended Day saves $30,000 alone in extra transportation costs.

His next question related to what the multiplier effect would be for each dollar that might be given up in salary by an employee, and Ass’t Superintendent for Business William Pastore indicated that each $1 in salary savings translates to about $1.25 saved because of various benefits related to salary. Ass’t Superintendent for Human Resources Ronald Friedman pointed out that some employee benefits, such as health insurance, have no relationship to the income level of participants.

A multiparty discussion then took place regarding whether it might be possible to accept donations for things like stipends for coaches and advisors, and Mr. Scordo indicated that counsel to the district has advised that donations are permissible but that they must be taken into the general fund of the district. In NY State it is illegal to have what is sometimes called “pay for play”, as is done in about 25 states, and one question was how decisions are made with regard to specific sports. Mr. Scordo and Dr. Friedman did something of a tag team on pointing out that donors would have to offer their gift to the district, and the BOE would itself choose how to spend the funds, but that there must be an equitable distribution of funding for male and female sports.

Mr. Kaplan then noted that a principal problem for school districts has been the spiraling cost of benefits, and that years ago benefits were boosted to provide more equitable overall compensation at a time when teacher salaries were rather low. But salaries began a process of increase over many years, but the pension benefits -- which had been boosted when salaries were low -- was never adjusted after the salaries became much better. He felt that the District needed to get a pure freeze on salaries, and that the budget was a “nonstarter” for him until the issue was settled.

Trustee Dan Ciccone noted that last year the initial proposed budget, which had a tax increase of about 7%, was rejected in May. The revised proposed budget, which was adjusted downward to reflect a tax increase of about 4%, was approved by the voters in June. He also pointed out a significant difference between last year and this year; Contingent Budget amounts are determined by the relative inflation rate, and last year a Contingent Budget would have resulted in a tax increase of Zero, while this year a Contingent Budget would result in a tax increase of about 4%.

Mr. Ciccone then observed that our teachers are greatly valued, and that they are the ones who educate and nurture our children. But the business model for education in New York has simply grown too costly, and he is greatly concerned about the possibility that the young careers of some brilliant teachers would be ended in a Contingent Budget situation, yet he does not believe that the community would pass a budget which would require even a 7% tax increase.

He also noted that athletics and music and extracurricular activities are the soul of the community, and that he would not be able to support any budget which “does not have them as part of our budget.”

BOE Vice President Joe Fusaro asked about a few line items of the budget, and noted that the portion of the budget over which the BOE has actual discretion is relatively small, and that we are going to have a multiyear problem. He encouraged residents to contact their legislators, since they are the ones with power to change State laws, and they need to fix the structural problems for school districts. And if they don’t want to do that, then they need to give power to local governments and school districts to enable them to work on these problems.

Trustee Patty Matos noted that she agreed with Mr. Ciccone and feels that athletics positively affects student character and motivates many kids to do better in classes so that they can continue playing the sports they love. She noted that it would be terrible if the District and BOE had to pit academics against athletics and the arts opportunities for students.

Mr. Kaszubski then opened the floor to residents for comments and/or questions, with a requirement that each person take no more than three minutes, until after every resident who wanted to comment had been given a chance to do so.

Comments and Questions By Residents:

Having witnessed some primarily emotion-based Residents Remarks periods regarding some intensive subjects in prior years, it was very nice to observe that only one resident elected to begin negatively, and then demonstrate apparent disdain for most of those on the dais.

Fortunately, other residents chose to be more constructive, and to pose intelligent questions or comments, some of them quite informative for me, and undoubtedly for others.

Here is a quick run-down of the breath of attitudes or beliefs or simple wondering:

One resident observed “I don’t wholeheartedly agree with freezing teachers pay, but we do have to start moving in that direction.”

Seven residents -- some giving personal testimony about their experience or their childrens’ experience -- affirmed their support for the District’s athletics programs and other after-school activities for students.

One resident felt that the voters would approve a budget bearing a tax increase of 7% or 8%, and felt that it too pessimistic to feel they would not approve more than 4% or 5% tax increase.

One resident felt that it would be hurtful if the District had to cut salaries and lose teachers.

One resident observed that if the District needs to cut back from Full Day Kindergarten to Half Day Kindergarten then it will be essential to give parents time to make alternative arrangements. [Note: Mr. Scordo indicated that would be done, and advised that Kindergarten would be one of the topics for the March 17th agenda.]

One resident indicated that if the District makes cuts in some areas, but not in other areas, then it would create adversarial relationships.

One resident asked about cuts in Admin. [Note: Mr. Scordo reminded everyone that in the current year’s budget, the District eliminated one Ass’t Principal position in Glenn, as well as eliminated one Ass’t Principal position at Boyd, and eliminated the Director of Transportation position, and that what had been full-time positions, the Ass’t Sup’t for Curriculum, and the Ass’t Superintendent for Human Resources, are now both part-time positions; of course, he also observed that Mrs. Llewellyn actually works close to full-time, although she receives only a part-time salary.]

One resident observed that the District Administration is “fabulous [and] I will never vote down a budget [and] I hope the people will stay positive and stay together.” The resident continued by observing “If I were a teacher I would take a freeze to make sure my colleagues should not lose their jobs.”

One resident asked “what is the three to four year plan even if was possible to pass a 13% tax increase? [Note: Mr. Scordo observed that was “a great question” but that the slide shown earlier, regarding future problems under the current Albany agenda, “was just crated today and we need to study the issue.” He also said that the Governor “is not coming up with a plan to tackle the real causes of our problems.”]

One resident asked “do we know the demographics in the District, [such as] how many are older and on fixed income?” [Mr. Ciccone replied that a study was done a few years ago and approximately 60% of households in Elwood do not have children in our schools.”]

Summarizing Potpourri of Comments:

It’s not easy to distill so many pages of notes into something “short and sweet,” but here are some additional comments which I noted at various points in the evening’s dialogue:

Dr. Friedman - Albany kept lowering the pension contribution under political pressure [i.e., not because it was required to do so] but changes in the law can be made; e.g. new pension tiers can be created. Also, changes can be made in health insurance. He asked “what if some of the changes that could have been made in Albany years ago had been done...well, our problems would be much less today.”

Mr. Kaplan - If every district starts cutting teacher positions, then there won’t be any job openings for the young teachers who would get cut. He said he was trying “to save teacher jobs” by getting concessions on teacher pay.

Mr. Ciccone - Governor Cuomo is trying to take away [with reference to Cuomo’s structure regarding a potential future Tax Cap] from the voters of each school district any opportunity to reasonably act on budgets which the majority chooses to pass. He also pointed, in contrast to Cuomo, to some encouraging Education plans from President Obama [“even though I’ve never been much of a fan of his”] and from Secretary of Education Arne Duncan.

Final Commentary:

Anyone who does more than scan what I have written over the past few years would understand that I am very much a centrist on these and other issues. The way to deal with problems is to roll up your metaphorical sleeves and get involved, but when many of those problems are imposed upon you by Albany, it makes it more than a bit challenging to effect the kinds of changes that are needed.

Those who feel that everything is simple, and that only their personal views are the right views, and that it is somehow a sign of weakness (or worse) to seek compromise or work for the mutual benefit of all, are not serving the community or the nation.

I heard one descriptive and quite creative word last Thursday night which I thought was spot-on; it was levied at some governors who seem to be taking a “no prisoners” approach to change within their jurisdictions, and the phrase was “thug-ocracy.”

We have to avoid any kind of thug-ocracy approach --from the left or from the right -- if we are ever going to really solve our own fiscal problems, both in the State of New York and in the nation.