Schenectady County

Area school districts see expenses rising

When 10 teachers in the Greater Amsterdam School District graded standardized tests recently, the di
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When 10 teachers in the Greater Amsterdam School District graded standardized tests recently, the district had to find substitutes to teach their classes — at a rate of $90 per sub per day.

Subs were also needed while teachers trained to grade the tests, which can take two weeks.

“That’s costly, not only in dollars but in professional instruction,” Greater Amsterdam School District Superintendent Ronald Limoncelli said.

The testing is one of the requirements of the No Child Left Behind Act, which local school districts do not control. Federal mandates and costs for retirement, health insurance and special education costs also contribute to the rising cost of education.

A report commissioned by the New York State School Boards Association surveyed school districts from 2001-02 to 2005-06 and found that costs of employee pensions, health care premiums, special education, transportation and operations and maintenance rose by $5.7 billion, or 47 percent, to $17.8 billion. Instructional salaries rose from $19.2 billion to $22.3 billion during that same time period.

Rising school spending is behind a push to cap property tax levy increases at no more than 4 percent annually. Gov. David Paterson supported the recommendation by the Commission on Property Tax Relief as an effort to stem the exodus of residents from New York because of the high tax burden. The Legislature has not yet acted.

past staff, present issue

Rising retirement costs is one problem. Limoncelli said that as Wall Street investments have declined in recent years, the percentage the district has to pay into the system has increased from 0.38 percent to almost 9 percent. In a $20 million budget for personnel, that amounts to an increase of more than $1 million.

“You cannot continue to have almost double-digit contribution expenses — and it’s only going to go up as the economy gets worse — without taking the money away from instruction,” he said.

Limoncelli said that particularly onerous is a 2000 law the Legislature passed exempting employees who have been in the system for 10 years from having to contribute 3 percent of their salaries to the pension plan.

Peter Sepp, spokesman for the National Taxpayers Union — an organization that has 362,000 members nationwide and 17,800 in New York — said retirement costs are “the elephant in the room.”

“Obviously, it means either adjusting the cost-of-living formulas or perhaps limiting benefit payments — neither of which would naturally be very popular with former school employees,” he said.

He said states such as Florida have changed to pay-as-you-go retirement plans similar to 401(k)s, where the taxpayers’ contribution is an annual match of whatever the employee contributes.

Costly contracts

Personnel costs ultimately drive budgets. Kelly DeFeciani, spokesperson for the Shenendehowa school district, said the biggest cost increases are in salary and benefits.

She said about $5.9 million of the $8.1 million increase in the budget this year went for contractual obligations including salaries and benefits, insurance, special education and student enrollment growth.

New York State School Boards Association spokesman David Albert said collaboration among school districts could be a solution to control costs.

One idea proposed by the property tax commission is to allow for regional collective bargaining of labor contracts.

The idea is to have a team of skilled attorneys well-versed in what the going salaries are in the area serve as negotiators.

Since most of the expenses are in labor, Sepp said school districts should look at reducing middle management.

They should also explore collaboration with other school districts — for example, having a series of school districts contract out for custodial services, transportation services or payroll administration.

All of those educators on the payroll require health care, which is another big expense for school districts.

Some districts are requiring employees to pay more. In Schenectady’s new teacher contract, during the 2010-11 year, the share of the health insurance premiums employees will pay will increase from 12 percent to 13 percent for individuals and from 15 percent to 16 percent for families.

Scotia-Glenville Superintendent Susan Swartz said Scotia-Glenville has also raised co-pays and contribution rates for insurance, as well as switched to a less expensive health plan.

In addition, Scotia-Glenville is a member of the Capital Area Health Consortium with about a dozen other schools that allows them to purchase health insurance with other districts to increase the buying power and lower costs.

“If we have reasonably healthy teachers across the board, the rates end up being lower,” she said.

The New York State School Boards Association supports collective purchasing to lower health benefit costs. Albert said health insurance is rising at a rate of about 10 percent per year, which is far higher than the rate of inflation or the 4 percent cap that schools would have to operate under.

“All of a sudden you’re faced with an expense that is largely beyond the control of school districts,” he said.

Special needs, expenses

Special education costs are another issue with which districts grapple. Schenectady City School District Superintendent Eric Ely said there are close to 2,000 students in the district identified as having special needs.

This could include everything from a child with attention deficit hyperactivity disorder to a speech impediment or a child in a wheelchair.

“It costs probably two to three times the amount of money to educate a special needs child with the amount of services that go along with it,” he said.

The federal government said it would pay 40 percent of the cost of special education services, and Ely said that number is actually around 17 percent.

In the 2005-06 school year, New York school districts spent $6.2 billion, which is an increase of 31 percent, or $1.5 billion, from the 2001-02 year.

Part of that cost is because of higher salaries, more use of occupational and physical therapists, increased use of technology, more lawsuits and rising costs, according to the New York State School Boards Association.

In Scotia-Glenville, Swartz said officials believe they can more effectively handle special education programs in-house. This fall, the district is starting an autism program.

Rising energy costs are another factor districts cannot control. In Schenectady, Ely said the district has undertaken an energy management program to try to reduce the amount of energy used. Even though their energy costs have gone up, Ely said he believes they have not gone up as much as other districts.

Schenectady is challenging because it is dealing with older buildings.

It is installing more energy-efficient windows, doors and boilers and repairing and replacing roofs in its renovation projects. However, these projects cut down on the loss of energy but don’t necessarily lower energy costs.

Seeking solutions

Reactions to the tax cap proposal vary. Groups like the New York State United Teachers and New York State School Boards Association oppose it. NYSUT President Dick Iannuzzi said the demand for smaller class sizes and the needs of special education students have driven up the cost of education.

Iannuzzi said he supports efforts to consolidate services among school districts to improve efficiency.

The union has lobbied to make the state’s income tax more progressive, including raising taxes on the wealthiest New Yorkers and making changes to the retirement system. It also seeks implementation of universal health care, which it believes will lower health care costs.

However, he said an arbitrary cap on property taxes would not be the way to go. A cap in California “decimated” the quality of the public schools. In Massachusetts, residents in many communities voted to override the property tax cap.

“The divide between the wealthy and poor grew,” he said.

no ‘doomsday’

On the other hand, Sepp of the National Taxpayers Union said property tax caps have not proven to be “doomsday” scenarios for other school districts where they are implemented.

He said he does not think it is unrealistic to have a reasonable cap that states that all other things being equal, spending should only go up by the rate of inflation and student enrollment.

These caps have built-in override provisions that allow communities to spend more.

Jack Kinzie, a taxpayer activist who founded the Fulton County Taxpayers Association, said he favors a cap because school spending is “out of control.”

He said the fact that the Gloversville Enlarged School District had contingency budgets for the past three years after voters rejected the initial proposals is a sign of people being out of touch.

Kinzie attributed the cost increases to escalating wages, medical costs and pension contributions and said some limit is needed. He said school districts have to get tougher in their negotiations, for example, making employees pay a larger share of health care costs.

“I just think that there is a lack of recognition on the part of most school board members that the taxpayers just can’t handle these increases anymore,” he said.

Categories: Schenectady County

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