Sunday, March 27, 2011

Greece School Budget Study Session Tuesday

  
6:30PM ~ Apollo 3rd Floor

Frank Oberg's 2011-12 Budget Facts


1.What do we know?

Monroe County leads the nation in property tax burden (D&C 9/29/2010)
Social Security recipients get a ZERO increase in 2011 (D&C 10/11/2010)
Local Unemployment rate is 8.3%.
Home foreclosure rate is 1.63%.

The GCSD 2010/2011 budget was defeated by 4,546 No votes to 2,824 Yes votes ultimately resulting in the adoption of a "contingency budget". The defeated budget required increasing the tax levy by 7.59% to $97.8 Million despite position reductions totaling 77.3 and an overall decrease in spending. This significant increase in the tax levy was a direct result of a $9.0 million decrease in State Aid.

The adopted 2010/2011 contingency budget reduced spending to $193.6 Million. It required a tax levy of $94.4 Million, an increase of 3.83%.

When asked "Why did you vote as you did?", 1151 voters responded to the exit poll (16% of total). Of these, 552 respondents told the BOE "taxes are too high ". A total of 265 respondents told us "not enough was cut from the proposal" . Only 61 respondents indicated "too much was cut from the proposal."

The NYState Senate has voted affirmatively to impose the Gov's proposed 2% tax cap on real estate taxes. Action is pending in the Assembly. This will cap future increases in the tax levy to the lesser of 2% or CPI, which could be 0%.

GCSD prepared a 2011/2012 "rollover" budget which would account for all projected wage/benefit increases and all other operating cost increases. This would increase the district's budget by $7.65 Million to $201.3 Million, a 3.95% increase over the current contingency budget level of $193.6 Million. This incremental cost in the budget alone would result in an increase in property taxes by 7%. Our experience last year tells us that this is unacceptable to the community.

*The district recently completed a building condition survey. This study certified by an engineering firm (mandated by law) projects the capital demands for the district to exceed $170 Million in Capital Improvement/Repair cost over the next 10 year period. (SCATS ~ What Oberg is NOT telling you here is that it was RECOMMENDED to the BOE to have a separate vote on this & a bus proposition in the Fall!)

2. What do we face?
Salaries and benefits are fully 75% of budget expenditures.

The district has consistently reduced certified administrative positions since 2006. Total spending on administrative positions has been reduced by a total of 3.6% over this period. Administrative positions total 55.6 currently in the Proposed Budget. There are also 5.8 FTE administrators that are funded by Grants.

Administrative costs now represent $5,720,454 ($5.7 million) or 2.92% of total spending. Building administrators are the "instructional" leaders and are also responsible for scheduling, building planning, professional development and overall coordination.There were a total of 7,118 recorded disciplinary referrals from teachers through the period September 2010 through March 11, 2011. Each referral required some level of an administrative response.

The district negotiated labor agreements with most of our unions which contained total cost increases at or below 3% (salaries and benefits). The district was also able to reduce payments for health care cost to 70% for employees hired after the date of contract approval. Existing employees would continue to receive health care contributions ranging from 95% for our hourly staff to 85% for our managerial staff.

The district is operating under the GTA teachers contract that had expired June 30, 2006. That contract remains fully operative under state law until it is succeeded by a new agreement. That contract contains 23 salary steps. A teacher moves up the "step" schedule after each year of service. The range of increases from Step 4 through Step 17 is 4.1% to a maximum of 7.5% (The actual percentage varies by step). Projected teaching salaries for 2010/2011 exceed $68.5 million. Salaries under this contract for the 2011/2012 budget year were projected to increase to more than $71.1 million. This would represent a $2.6 Million dollar increase. This amount alone would exceed the 2% tax cap. The district also pays for 90% of an employees health care cost under this contract. In fact, when the contract expired on June 30, 2006, there was more than 530 teachers between steps 5 and 12. To the extent these teachers are still employed by the district, each one's salary has increased $15,000. That is a $3,000 increase in base pay each year of the expired contract.

The proposed GTA contract was narrowly approved by a 527 to 480 vote (47 votes separated the yes and no votes) by the teachers union. The BOE had provided guidance to the previous superintendent to achieve a contract with no more than a 3% increase in total contract cost.The new contract would have increased spending on salaries by $692,000 ( a 1% increase) in addition to the current step schedule increment cost in year 1. This amount would have been offset by savings of $384,000 accruing to a change from the current health plan to the Value Plan. This would be a resultant increase of $308,000 for the first year. The district would continue to pay 90% of the employees health care cost. The proposed contract did not achieve the 3% cost guidance primarily due to the increases generated by the existing step schedule. The proposed contract was subsequently declined by the BOE on a 7-1 No vote since it clearly exceeded the board's cost guidance. The district will therefore continue under the older contract pending new negotiations.

The Governor's proposed budget will result in a net decrease in total state aid for the 2011/2012 year of $2.1 million, a 2.70% reduction. Subsequent years will result in additional reductions in state aid to the district. The reduction for the 2012/2013 budget is projected to be $3.8 Million. With reductions in state aid, a possible cap on taxes, and rising costs that exceed the rate of inflation forces, this board of education will have to make many difficult decisions.

3. What the future holds!

The BOE directed the Supt to develop a budget that limited the increase in the tax levy to a maximum of 2% in anticipation of the proposed tax cap.

The Board of Education approved the Superintendent's recommendation to extend retirement incentives to virtually all district employees. This yielded a number of retirements including 21 teachers. This will help to reduce the total number of involuntary reductions (layoffs).

The Supt's proposed 2011/2012 budget increases spending to $195.87 Million. This represents a reduction from the aforementioned "rollover" budget of $5.25 Million. The proposal continues to offer a balanced program of all subjects and courses including Advanced Placement (AP) and International Baccalaureate (IB). Some reductions in the amount of offerings are necessary including sports, music, library and art.

The budget provides no money for the purchase of replacement buses. (SCATS ~ So they will have a separate vote on a bus proposition along with capital repairs in the Fall ... i.e. ANOTHER TAX HIKE!)

*The budget proposal represents an increase in total spending of $2.25 million or 1.16%.

*The budget will require an increase in the Property Tax Levy of $1.86 million or 1.97%.

*Under the impending tax cap, the district would be permitted to increase the tax levy by only $1.51 Million (based on January 2011 CPI level of 1.6%) The cap provides for an increase in taxes by the lesser of 2% or the Consumer Price Index (CPI).

*Given a slight increase in projected property values, this results in an estimated tax rate of $22.92 per $1000 of assessed valuation or a 1.68% increase.

The proposed budget is projected to carry a cost for teachers salaries and stipends (including coaching) of $69.2 Million. This represents 66% of total salaries and 35% of total spending. In addition, teacher health care is projected to cost another $10.4 Million.

The proposed budget will reduce 84 teaching positions. Retirements will hopefully reduce this number by 21 positions to 63. In response to the economic conditions of our community and absent any increases in State Aid or changes in the cost drivers that are impacting our district, we are going to have to make changes to our educational program. These will impact our students, parents, and staff.

* All such items will be impacted by holding a SECOND VOTE, probably late next Fall (i.e.December) because "historically, these things pass then." Interpreted it means that when the senior citizens are in Florida, they can get enough uninformed parents to the polls to accomplish ANY spending they want.
  

21 comments:

Anonymous said...

Thank you, Scats, for explaining why when there is no inflation (my SS didn't go up for the second year) my school taxes go up 1.97%. Seems like everything from cable to stamps to taxes go up. I'd hate to see what happens when there is any measurable inflation.

Anonymous said...

healthcare insurance has exponentially increased for more than 20 years... huge double digit increases. When 75% of a budget is wage and benefits( i.e. health insurance costs) health insurance alone will drive up expenses over the cost of inflation...
jk

Anonymous said...

I suspect the cost of health care and pensions is one reason there has been no contract for many years. The teachers realize they can't get as great a deal as the last (now expired) contract with good raises (excuse me, steps) each year or two and super benefits. And the BOE can't get any concessions and knows that there would be a hue and cry if this sort of contract was approved again. So it is a win/win: the old contract stays in effect, the benefits remain golden and the increase keep rolling in. Thank you NYS for keeping the old contracts going even after they expire.
It's time the contract reflected the reality that most non-public workers have faced: limited benefits with higher co-pays and higher percentages paid by the worker, limited guaranteed raises, no employer pension other than (maybe) some contributions to a 401K.

Anonymous said...

Especially when we are covering over 90% of the health insurance premiums for the Greece employees. If the employees even covered half of the monthly cost of the insurance it would help.Free ride is over and the remaining employees will see their colleagues whittled away each year as we subtract more and more non-mandated programs and services.
Farewell to half the elementary art music and librarian teacher positions. What next?

Anonymous said...

Health care and other benefits are the real driving force behind increased costs.

Over time, (without cost of living increases) the step increases balance out. New hires replace retires and their lower salaries balance out the step increases. In recent years there have been fewer retirees because of the economy, so it has skewed the money. But 6 or 7 years ago there were a ton of retires so salary costs actually went down, (benefit costs still went up).

When negotiating a new contract with the union the board needs to concentrate less on salaries and more on concessions in benefits. I know the agreement they voted down had reductions in benefits, but they should lower the part the district pays to 85% or so.

SCATS said...

A humorous note on the subject of health care ... from an email forward ...

"FREE HEALTH PLAN: If you can't afford a doctor, go to an airport where you'll get a free x-ray and a breast exam, and if you mention Al Qaeda, you'll get a free colonoscopy."

Anonymous said...

Inflation rate is currently at 2.11%. Just an FYI.

Anonymous said...

"but they should lower the part the district pays to 85% or so." You are being ironic I trust? It should be lowered to 50% and the plan should charge more for plus one and family.

Anonymous said...

Some of the comments on health insurance are comical.
Last year the board approved the teamsters contract that INCREASED the amount paid by the district to 95%.
Now you people think the GTA is going to go for the idea that the union members should pay more.
If you gave THAT union more WE want more.

Anonymous said...

you people???? I'm a parent and tax payer who supports unions' rights to collective bargaining ... a job is better than no job which is what many state union workers are now facing... I've had frozen wages for two years and was told it would probably be another year or two... just because the BOE are idiots does not mean you should be too...

SCATS said...

To 7:09PM ~~ You may be a parent & taxpayer, but you might also still be a union member yourself, or the spouse of one. Most people that I know who have no union affiliations don't support what the unions have done/are doing and couldn't care about collective bargaining rights.

Anonymous said...

they should...

Anonymous said...

Wrong 5:37,the Teamster contract increases what the member pays by 2%

SCATS said...

To 7:40PM ~~ They should believe in Santa, the Easter Bunny & the Tooth Fairy too, right?

Anonymous said...

SCATS equates labor rights with fictitious holiday characters. Sad, so sad. I guess SCATS liked the old days of 80 hour work weeks, child labor, and exploitation of the working class. Right on SCATS! Tell ya what... anyone who disapproves of unions should voluntarily surrender all labor rights gained by unions. IF that happens I'll actually respect their opinions. Until then... (not holding my breath)

Anonymous said...

5:57 Last year the board approved the teamsters contract that DECREASED the amount paid by the district-NOT INCREASED-check your facts

Anonymous said...

The Teachers Union was originally set up to protect women who made low wages and had no rights in a man's world (many many moons ago)... Look at how much this has blown out of proportion (like too many other things I cannot even begin to go on about). Our taxes continue to increase, our classroom sizes increase, jobs are being cut, instructional time is being cut, programs are being cut, too many buildings are open, busses are doing zig zags all over the district and who is losing out here??? THE PARENTS AND THE CHILDREN! If these teachers cared for the children they teach they way they claim they do, they would be willing to accept a pay freeze and allow the children to continue with music, art and library. GCSD where Student Learning Is The Goal???? NOT!!!!!

You've got parents who say they would be willing to do whatever it takes to keep their children in schools of choice, yet at whose expense? Do these parents realize that we are continuosly paving the way for the greedy GTA to get what they want while we are all feeling it? We feel it and they don't! I have even had some teachers comment that they don't get more involved and will not attend extracurricular events until their contract is negotiated! Really? Really?

Nothing has changed since last year's budget other than the numbers themselves... we still have low enrollment schools, salary increases to staff, rising transportation costs, programs being cut and taxes raised AGAIN!!! Sure looks like that last budget relieved us, huh? It's a vicious cycle that appears to never end.

SCATS said...

To 8:21PM ~~ There's a big gap between labor laws and union rights. I was responding to someone who specifically said union rights.

What do you mean there's no Easter Bunny?? Where do chocolate peanut butter filled eggs come from?

Anonymous said...

Can someone answer me this - I keep hearing that "Salaries and benefits are fully 75% of budget expenditures".

Then I hear we spend somewhere between $12,000 and $15,000 per student per year.

If class sizes average 20-25 kids - that's around $300,000 per classroom.

Average Teacher Salary is around $50,000 - throw in another $20-$30,000 in benefits (and I think that is figuring way high)....

So where is the other $220,000?

SCATS said...

To 12:49AM ~~ Behind those classroom teachers at elementary there are also art, music & PE teachers, librarians & counselors, etc. also covered by the teacher's contract. Then there are the Special Ed folks who may have 8:1 classes. At the upper grades, there are specialized teachers for foreign languages and other such classes.

Unless there was a drammatic change with the contingency budget, I believe the figure is much closer to the $15,000/student than the $12,000 figure.

$194,000,000 divided by 12,300 = $15,000+ per pupil.

Anonymous said...

8:21 at "old days of 80 hour work weeks" What are you talking about "old days"? That is the present day for most of the people that have kept their jobs around here. Not union employees of course but the rest of us that work in the private sector. Anyone that owns their own business works that too and has to pay their own benefits.
And child labor is not abolished only at union shops.