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School spending figures distorted

April 2, 2012

As some school districts in Fulton and Montgomery counties consider deep spending cuts, layoffs and, in some cases, the wholesale elimination of varsity sports for the 2012-13 school year, astute observers of the school budget process may be wondering how things got so bad so fast.

I can remember, and perhaps you do too, news stories from 2011 proclaiming that more than half of the school districts in New York state had managed to either freeze year-over-year spending or even decrease spending in some cases. Of course, it wasn't really the truth, but on the surface, it did appear that way for some districts.

School budgets in the local area, and throughout the state, will be suffering in their 2012-13 budget from funding gaps created by two federal programs: the American Recovery and Reinvestment Act (commonly known as the federal stimulus package), which helped replace what would have otherwise been devastating cuts in state school aid for the 2009-10 school year; and the much lesser-known Education Jobs Fund program, which helped some districts avoid severe cuts for the 2010-11 school year. The Education Jobs Fund was basically the last public school teacher bailout provided by Congress before the Republicans won control of the House of Representatives in 2010. Since then, no additional federal help has been provided, leaving New York state to solve its public-education funding crisis on its own.

Schools in the two counties received $12.8 million from the ARRA program. This money was accounted for in the general fund of school budgets, so it was at least transparent - voters could see it in the spending increases they were asked to vote up or down that year.

Accounting for the money that way allowed the Cuomo administration to camouflage the amount of state aid it was cutting from districts by simply replacing it with federal money. The accounting rules for the Education Jobs Fund, however, were trickier, and I think the source of much of the confusion over where district budgets stand today.

For the 2011-12 school budget process, the New York State Department of Education ordered districts to account for the Education Jobs Fund program money in separate "off-budget" accounts, making the spending the program enabled invisible to school budget voters on May 17, 2011, rendering that election little better than a fraud.

One local school business manager described the change in accounting rules from ARRA to the Education Jobs Fund thusly, "This was not the best approach from a public perspective. Due to these amounts being one-shot funding, it appears to be off- balance sheet (and budget) financing similar to Enron. Hopefully, schools don't suffer the same fate."

All told, there was $4.1 million worth of hidden spending increases provided to the 12 school districts in the two counties by the Education Jobs Fund program for the current school year.

Oppenheim-Ephratah spent its portion of the funding for its 2010-11 budget, but the others all spent it for 2011-12. The highest recipient was Broadalbin-Perth at $750,548; the lowest was Wheelerville Union Free with $52,489.

These were the other totals: Gloversville, $596,517; Fonda-Fultonville, $585,000; Amsterdam, $519,863; Mayfield, $462,000; Johnstown, $390,120; Canajoharie, $265,000; Fort Plain, $248,416; St. Johnsville, $133,400; Northville, $133,261.

This deception in the spending totals was not the fault of local district officials or school boards - they were ordered to do it this way by the state - but the consequences of it will certainly be felt locally. I remember last year an interview I did with outgoing Fonda-Fultonville Superintendent James Hoffman, who told me he believed in his "heart of hearts" that the 2011-12 budget would be the worst his district would face. I didn't believe he was right, but I quoted him anyway. Had I known his district had $585,000 worth of its payroll financed in an off-budget account, I would have known he was wrong.

And so, perhaps, would have voters. By distorting the spending figures, the state robbed its citizens of the ability to fully participate in their own democracy. Maybe had people known how bad things were going to get, they might have held rallies last year encouraging Gov. Cuomo's mandate-relief team to do something meaningful. Instead, we've had the spectacle of students and teachers marching down to Albany this year to squawk aimlessly at a state government that has already decided to let its localities solve this problem by themselves.

Considering how weak the property tax base has become locally, and the increasingly expensive cost of school districts' public-employee union contracts, I am not confident most of the local districts can fix this problem. In May, many districts will actually ask their voters to approve tax hikes so they may provide them with substantially less services for their money. If more than 40 percent of voters say no, the property tax cap will force a zero-percent tax increase. One wonders if the consequences of that choice will be fully explained to voters in time for it to matter.

Jason Subik, a guest columnist, lives in Johnstown. He is a freelance journalist who has written for The Leader-Herald and the Daily Gazette in Schenectady.



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