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Home Schools Guest Opinion: Zahm on Towards Sustainable Rye … Schools

Guest Opinion: Zahm on Towards Sustainable Rye … Schools

Today MyRye.com presents an opinion piece by Rye resident Bob Zahm "Towards Sustainable Rye … Schools".

What do you think? Leave a comment below.

By Bob Zahm

This opinion piece is not about plastic versus paper.  It’s also not about leaf blowers.  But it is about making a financially sustainable future for our community.  The real issue at hand is growth in school district spending and taxation.

The problem is seen in the draft budget for 2012-13 and its call for additional taxes to re-pay the proposed $16.4 million HS Bond.  Because Rye students clearly need the additional classrooms, I will vote to support the HS bond, but that supporting vote will come with great reluctance.

My reluctance comes because once the HS bond is passed, all real tax payer leverage over school district spending will be essentially lost as long as tax growth is kept within the 2% cap.  But isn’t any budget (or series of budgets) within the 2% tax cap a good budget?  Maybe, but only as long as those “Tax Cap Compliant” budgets don’t just postpone large tax increases for the future.  And that’s exactly what the current draft schools budget does, stores up trouble in the form of tax increases for the future.

Point 1 – The forecasted 2% tax rate increase required to re-pay the HS bond comes outside the tax cap.  Yet, if forecasted reductions in debt service are used ($580k/year within 3 years; $380k in the next year), the Bond could be repaid without increasing taxes.  But instead, the proposed budget uses this money to support increased, on-going spending (salaries, benefits, etc.) which would otherwise require voter approval by exceeding the tax cap.  This is a clever way to raise taxes beyond the tax cap, but unnecessary.

Point 2 – The proposed 2012-13 budget uses $2.5 million of reserves to keep the forecasted tax increase to 1.9%, a hair under the 2% tax cap threshold.  While using reserves is a great idea, the proposal only defers tax increases of 3.9% because the funds are for on-going, repeating costs.  These costs won’t run out, but the reserves should.  And when they do, we’ll see the deferred tax rate increase.  Wouldn’t it be better to reduce spending now and use the reserves for one-time costs like the HS bond or other facilities needs?

Point 3 – The District has, with one exception, run multi-million dollar surpluses in each of the past 10 years.  Running a surplus is conservative.  But in the case of a taxing authority, consistent surpluses mean a combination of over budgeting for expenses and under budgeting for revenues.  Based on the surpluses ($3.4million last year, and an accumulated $15.9million at the end of the last school year) at least $1million in budgeted spending can be reduced without “affecting the kids”.  Where is this money?  It is in the over-budgeted salary and benefits accounts which are the annual source of large under-spending / over budgeting.

Point 4 – At its most recent meeting, the Board of Education received a report on Special Education in the Rye schools which identified the need to move away from “co-teaching”.  Look <here> for the report.  The report says that almost $1million in reduced spending is possible while increasing the quality of special education by replacing “co-teaching”.  This is new news and so not accounted for in the proposed budget, but it sure looks like an obvious change for the proposed budget.

In summary, the proposed budget for 2012-13 (and the outline of its followers) is “Tax Cap Compliant” solely because of increased use of reserves which defers an additional tax increase of 3.9% to some future date.  Over the next five years, the total projected tax rate increase would be 16.7% (2% for the bond; 3.9% from reserves; 10.3% from the tax cap compliance).  This may be low enough for some Rye citizen committees, but it will not make Rye’s school spending sustainable.  Doing so requires reasonable cuts in budgets and dedicating expected reductions in debt service to re-paying the HS bond.  Both are possible.  But the Board of Education needs to be convinced that such action is necessary and expected by the community.

4 COMMENTS

  1. Nice analysis Bob. Compromises are usually filled with shenanigans.

    Why don’t Rye homeowners currently using the services of the Board of Education pay a higher share of its costs than those who do not?

  2. Do you want to pay $5,002 for the HS Bond when you don’t need to? Well, the latest missive from the School District continues to say that taxes have to go up to pay for the bond. Yup. And it isn’t true.

  3. Per Friends of the RSCD, the proposed bond will ONLY cost you 69 cents/day. That’s $5,037 over 20 years. Not bad. Great headline. But even better (and doable if the Board takes the RIGHT step) is 0 cents/day. Over 20 years, that’s still … wait for it … 0 cents! The kids get the classrooms they need. And the tax payers get a cost effective school district.

    If you’re happy with the $5k option, vote YES on Tuesday. If you’re not, then speak up. Time is running out.

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