This is a special note to our so-called school district leadership: Now that you got your budget passed can we drop the “suck it up” nonsense and start talking seriously about how the reality of the collapse in home values impacts the ability of residents to support the public school system?
I was there so I know you were practically giddy last Tuesday when you managed to dupe 5% of New Rochelle’s registered voters into passing your deceptive, bloated school budget. You even deluded yourself into believing that getting 2,200 votes out of a possible 40,000 showed that the community came out to “support” your budget. Great. But now the chickens are coming home to roost.
If you do not cease soon with the campaign rhetoric and PR spin, you are going to find yourself paying the price for failing to make genuine efforts to build widespread community support for your budget. Yes, you “won” — by lying to the public and running as close to a secret election as is possible — but now comes time to see what you really won as news comes today that the tsunami of wealth destruction caused by record declines in home prices continues unabated.
Read it and weep, dummies: The S&P/Case-Shiller U.S. National Home Price Index (chart above), which covers all nine U.S. census divisions, recorded a 19.1% decline in the 1st quarter of 2009 versus the 1st quarter of 2008, the largest decline in the series’ 21-year history.
The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. As even you geniuses who run our school district can figure out, that chart shows a very steep multi-year decline and still no bottom in site. Yet you continue to spend money like we are in an economic boom time.
So, what happens when more than one in five homeowners is underwater on their home? You are about to find out.
NEW YORK (Reuters) – Home values in the United States extended their fall in the first quarter, with more than one in five homeowners now owing more on their mortgages than their homes are worth, real estate website Zillow.com said on Wednesday. U.S. home values posted a year-over-year decline of 14.2 percent to a Zillow Home Value Index of $182,378, resulting in a total 21.8 percent drop since the market peaked in 2006, according to Zillow’s first-quarter Real Estate Market Reports, which encompass 161 metropolitan areas and cover the value changes in all homes, not just homes that have recently sold. U.S. homes lost $704 billion in value during the first quarter and have depreciated $3.8 trillion in the past 12 months, according to analysis of the reports. Declining home values left 21.9 percent of all American homeowners with negative equity by the end of the first quarter, Zillow said.
At some point people just walk away; it has already started to happen in Arizona, California, Florida and Nevada. You think New York is going to be spared?
The other 95% of voters you lulled to sleep are in for a rude awakening this fall when the value of assessed property is calculated for 2009 by the City Tax Assessor. Talk of the Sound has repeatedly warned of the danger in using the unjustifiably low assessables figure plugged into the budget to justify the 3.22% tax increase required to support the more than $175 mm of the budget to be funded through local property taxes. Even after we pushed to get the District to revise its figure, you went from the sublime -1.41% to the ridiculous -1.76%. Unless there are millions of dollars squirreled away in your own budget, you are going to need a tax increase 2-3 times higher than the 3.22% announced in April.
Unlike in past years, however, when the day of reckoning comes, we are going to be there to remind New Rochelle residents that you made a conscious choice to put forward a budget based on lies and misrepresentations. As the poet once said, “you can lie to some of the people all of the time, all of the people some of the time but you can’t like to all of the people all of the time.”
So, now you are going to need to start saving some money, right?
We have already suggested that you put GPS tracking devices on CSNDR vehicles to cut down on the amount of fraud and abuse by school workers using district vans and trucks as personal vehicles, putting in place a computerized work-order management system to keep track of who is being assigned to do what work and when. You could get rid of the “data entry” clerks who no longer enter data because you have spent millions to optimize (i.e. computerize) various systems and processes within the district. We’ve got some other ideas on top of these.
How about….stop paying money to newspapers of record. You have a website, use it!
Mandated by laws and courts, these often long recitations of detail were to give official notification, to any who were interested, of the legal intents and actions of both government entities and companies that found themselves under some appropriate regulation. But the town of Apex, N.C. must be giving publishers a shudder, as the town moves at least some public notices to its own web site and out of the local newspaper, saving $13,000.
How about…stop talking about shared services and actually do it. According to Quinn and Organisciak you spent over $1.3 million on OT over the past two years to shovel snow. How much of that could be saved by having the City plow the school district parking lots.
A plan being shopped by Attorney General Andrew Cuomo would give taxpayers like Dalton and local officials more authority in eliminating or consolidating some layers of local government. Cuomo, a possible candidate for governor next year, has been pushing a proposal to give county and town officials as well as taxpayers the power to reform or abolish districts for towns, villages and special districts that cover water, sewer, firefighting and lighting services.
What else can be done?
The budget passed, that battle is over, so the next question is how can the district cut costs in anticipation of what is sure to be a significant shortfall in tax revenues. I invite Talk of the Sound readers to share their ideas on how the District can costs in the comments below (in order for your comment to appear without moderation you must register and then login before commenting).