SOS (Save Our Schools)

I’m sure you have been hearing and seeing all of the commercials, newspaper articles, and conversations about states around the nation where governors and legislatures have cut spending in areas that may personally affect so many of us, either directly or indirectly. One area of importance to all is in the area of education.

Whether you have children in school, or are a property taxpayer, homeowner, or just care about our future as a world leading nation, this is of particular importance and is going to affect everyone in one way or another. Although all state proposals and spending plans are different, they basically are comprised of the same budget line items. For purposes of this discussion, let’s use New York State as an example although many states fall within the same category. In New York, Governor Cuomo has proposed a budget for the coming fiscal year that cuts billions of dollars to education, along with other areas in the state’s purview that are state funded. However, these cuts are imposed upon the past years’ numbers that have been slashed over the past three years. In addition, New York State has also increased education mandates, so when you combine funding cuts with increased expenses such as mandates, increased health insurance premiums (this “thing of ours” always manages to find its way into everything in our lives), rising fuel prices, and all other increased expenses, you have a recipe for disaster.

For example, the Governor’s proposed state aid cuts to public schools are devastating to school children and taxpayers alike, and unfortunately, there is very little discussion about the impact of those cuts on our schools. Governor Cuomo has effectively diverted attention from the inequitable cuts he plans for New York’s neediest districts with issues that do nothing to help schools maintain the programs and services they have developed over the years and that our children deserve. Governor Cuomo has launched a campaign for educational reform that has received considerable media attention, but fails to address the important issues that confront our schools and communities. He maintains that school districts can absorb his reductions in state aid “without laying off teachers, cutting programs, or harming students.” He then diverts attention from the devastating impact his cuts will have on schools by suggesting that districts have sufficient reserves to absorb those cuts and that Superintendents are overpaid and administration overstaffed. However, his math just doesn’t add up. The funding gap created in Albany will not be closed by the Governor’s simplistic proposals and his rhetorical sound bites; nor will a tax cap be helpful. What will be required are some tough decisions to control the real cost drivers behind school budgets.

Take for example a very common and popular school district scenario: a belowaverage wealth district, with more than one third of their student population on free and reduced lunch. One particular district that is in this exact situation has been targeted by the Governor to lose $8 million in state aid. In addition, they are simultaneously seeing spikes in pension contributions and health insurance premiums, representing an increase of $6 million over current expenses. This immediately creates a $14 million gap in what is known as a “rollover budget” taking last year’s budget and without making any changes in services move it into the current fiscal year. As in many school districts, this particular one is working hard to reduce those expenses over which they do have some control. The district has also proposed a wage freeze for all employee groups, although due to legislation and existing contractual obligations, must get that approved by the membership of the bargaining units in order for it to become a reality. While such a wage freeze would result in significant savings, it would only represent about one half of the Governor’s reduction in state aid, not to mention the increase in the rollover budget if the state aid remained “flat” from last year. They have also reduced non-instructional expenses where they were able.

Unfortunately, closing the enormous gap the Governor’s cut has created will require them to make deep and painful cuts in programs (directly affecting kids) and staffing (directly affecting lives), each of which represents a loss of services and opportunities for students. Consequently, these still aren’t enough and they will have to continue to make thoughtful reductions as required by the current fiscal reality. Then you have the Governor’s proposal to deplete school district reserves to fill the funding gap, which is also a disservice to local taxpayers and to students. In many school districts throughout the state, it has been those reserves that have been used to offset previous years’ state aid cuts and freezes to maintain programs and avoid spikes in the tax levy. Although this district that we are speaking of will apply a portion of their reserves to the budget year 2011-12, to suggest that the district sacrifice its financial future by depleting reserves is shortsighted and irresponsible. Plainly stated, if they use all of their reserves this year, what happens next year? A 25% tax hike? Sure.

The reductions being proposed by the Governor will inevitably harm the most vulnerable students and is disingenuous to pretend otherwise. One cannot help but question the fairness and equity of the Governor’s budget proposal for low-wealth communities that have worked so hard to support opportunities for children, and invest in their future.

Undoubtedly, the Governor faces hard choices in confronting the state’s enormous crisis. Superintendents have engaged their communities in confronting difficult choices for several years, and will continue to do so. For the sake of future generations of students, districts have no choice but to manage this current crisis and should not be forced to do that through divisiveness or by diverting attention from important issues. Our children, and our future, deserve nothing less.

On the convention scene, IIAA of Westchester County, NY, held its annual E Day Conference recently at the Doubletree Hotel in Tarrytown, NY, and before I speak about the show I would be remiss if I did not make mention of the nice job that the hotel did for this show. A few months back, PIA held a conference there and I beat up on the hotel for doing such a terrible job in mismanaging the logistics, and quite frankly this time I arrived two hours earlier than I needed to anticipating another disaster and just to make certain that I did not get caught up in the same “mess” as the last time I attended a conference here. Nice job, Doubletree, and maybe next year I’ll stay at your property the night before as opposed to staying at the Marriott up the block just to avoid the chaos at your place. The conference itself was a huge success, and was a sellout. Rosanne Rizzo, President of IIA of Westchester, did a tremendous job along with her co-chairs Michael Vanderwerker of Morris H. Bannister & Son; along with my Facebook and Twitter buddy Margaret Black(although she’s a Giant fan) of the Alan M. Block Agency. Bob Hartwig, Ph.D., CPCU, and President of The Insurance Information Institute, was one of the speakers and in an extremely entertaining way spoke on the State of The Industry. Frank Rich, Chief Strategic Officer of Chase Media Group, was the keynote speaker and spoke on the challenges and opportunities in marketing positioning and performance improvement.

Congratulations to Sara J. Rosen of Rosen and Company for being the 2011 Frederick H. Dayton award winner, as she joins a list of over 30 distinguished award winners throughout the years. As always, it was great to see people like Kathy Jennings of The Jennings Agency; Anthony Villani of Avanti Associates; Randy Silberquit of Eifert French & Ketchum; and so many others who came out on an almost perfect, almost spring day in the almost town of The Headless Horseman.

Well, next time we’ll talk about the PIA of CT annual convention; Young Insurance Professionals Winterfest (aka Snow Job); and whatever else happens over the next two weeks. Ciao for now!