Before I start going into the numbers, I want make a brief mention of those expensive budgets I purchased. Nine of the ten were left-over bounded copies from prior years. Only one was a photocopy. So the Administration, with the full knowledge of the School Board, charged me for budgets which I had already paid for with my property taxes.
Now that you have the background story, it’s time to dig into the numbers. I believe the New Rochelle school system is facing a $35 million cumulative deficit over the next five years as shown in the chart above. If this comes to be, then we will have to make massive cuts in staffing and elective programs. For those who may think I’m crying wolf, consider that we are already cutting teachers, nurses, busing and other services despite a rising revenue base.
How did this happen?
In a nutshell, expenses are out of control. Over the past 10 years our health care and general welfare benefit costs have gone up by 138%. It is a shocking increase when compared with an 8% rise in student enrollment. There are ways to slow the growth in benefit costs without cutting teacher compensation. For example, we could move to Health Savings Accounts or participate in plans where employees are rewarded for living healthier lifestyles.
Total salaries for the system have increased by 55% over 10 years, double the rate of inflation. If salaries had simply tracked inflation then our budget for the upcoming year would be $15 mil lower. I am all for paying teachers well, but clearly there are some savings to be found in staffing. For example, the union president is a fully salaried teacher even though he is only required to teach 1 period per day. That means we have to pay for two teachers to carry the workload of one. Other union executives also get full pay for partial workloads. Shouldn’t these people conduct union business on their own time and not on our dollar?
The scary projections in the chart are based on the following assumptions:
1. tax rates continue to increase 5% annually (vs. 7% over the past 10 years)
2. wages grow 2% annually (vs. 4% over the past 10 years)
3. benefit costs grow 10% annually (vs. 11% over the past 10 years)
4. state aid remains flat at current levels (vs. 3% growth over the past 10 years)
5. all other expenses remain flat at current levels (vs. 3% growth over the past 10 years)
In the next segment I will reveal some parts of the budget that are quite curious. Things may actually be much better than I fear…or much worse!
Adam D. Egelberg, CFA
It means that the tax rate
It means that the tax rate will/has to go up more than the 5% assumption in the chart.
Nothing really new here, except we’re confirming what my wallets been telling me for 10 years.
Adam, any idea why the school district doesn’t use the previous years assessment roll rather than use the current years assessment total which nobody know what the final number will be? I think using the fixed number (from the previous year) would put alot of stablity into the equation. The BoE likes to complain about the declining assessment, using a fixed assessment number would eliminate that I beleive.
The city would collapse at this level, wouldn’t it?
Perhaps someone else could jump in here, but it would appear as if we are heading for double digit increases year after year until, what? The projections are very conservative and it’s still scary. What will be the end result when we cant afford it anymore? School closings, population shifts causing housing market to deflate. If only half the kids can get through high school, what prospect will they have in the new rochelle job market, because they won’t be moving to scarsdale or larchmont. The system seems to be designed to fail. How could this be? Could there really be a plan in place to address this “curve” ? Somebody please explain.