School reserves won't fix all woes
iStock photo for essay about cap on school taxes. For Viewpoints Section/ Alleen Barber. ( iStock) Credit: iStock/
As the education establishment begins to fight Gov. Andrew M. Cuomo's proposed $1.5-billion cut to school aid, Cuomo has fired back, implying that shaving superintendent salaries and depleting the fat reserves of some districts is the way to deal with the reductions. He is entirely right and entirely wrong.
The salaries of the leaders and the overstocked reserves of some districts are symbolic of how some run their finances: politically, secretively and disingenuously.
But it's fantasy to believe that simply pulling superintendent salaries and cash reserves down to appropriate levels will make paying for education easier.
Consider superintendent salaries. Statewide, 40 percent exceed $200,000 per year in pay, and their benefits are often extravagant. Some packages approach $500,000 per year. In many cases they should be curbed.
But doing so is more meaningful symbolically than financially. The average Long Island district devotes considerably less than 1 percent of its budget to superintendent compensation. Superintendent compensation is so high because it has to be considerably better than the generous packages of the hundreds of teachers and administrators they supervise, and that's where the real changes will have to come.
When it comes to reserves, Cuomo is right to point out that districts are collectively holding more than $1.2 billion statewide. While school districts, like any large financial concerns, need to have contingency funds, some districts stockpile too much. The law says they can hold 4 percent (raised from 2 percent in 2006) of their annual budget in reserve, but many exceed that by far, and face no penalty. With a budget of $178 million last year, the East Meadow School District can legally carry reserves of only about $7 million. But the district is actually holding almost $18 million on the sidelines, between reserves and leftover federal stimulus money - and it still raised taxes last year.
That happens in too many places. Districts stockpile taxpayer money while asking for more and when the state threatens cuts, districts take hostage advanced placement courses, sports or the arts, never mentioning the option of spending reserves to deal with the shortfall.
Yet, Cuomo's comparison of the $1.2 billion in reserves and the $1.5 billion in cuts makes it sound as if he thinks one should be used to cover the other, a one-shot way to approach a systemic problem.
Excessive pay needs to be cut in many districts, and excess reserves should be used to help the difficult transition over the next several years, especially if a tax cap is put into place.
But the real solution is changing the laws that make sensible negotiations with the unions impossible, curbing mandates from the state that make running a district frugally unfeasible, and controlling the health benefits and pensions that make future funding of our schools unmanageable.