Pattye Benson

Community Matters

T/E School District Finance Meeting Updates . . . 2011-12 School District Budget Problem is the ‘Tip of the Iceberg’

Last night was the Finance Committee meeting and continued the discussion from the Budget Workshop held last month. The administration and the school board members focused on the budget strategies available to fill the remaining $3.3 million shortfall.

If you recall, originally the remaining school district 2011-12 budget deficit was $2 million. However, because of Gov. Corbett’s proposed budget and cuts to public education, an additional $1.3 million in state funding was lost to the district and therefore was added back into the TESD budget shortfall.

How to fund the $3.3 million deficit was the focus of the Finance Committee meeting. Members of the Finance Committee support and encourage a pay waiver freeze for next year. Hoping for an understanding of shared sacrifice, the school board recently mailed letters to TEEA and TENIG unions seeking their support.

Outsourcing of custodial services remains an open issue for further discussion; it appears that the updated cost-savings on out-sourcing of those services is approximately $800K annually. There was discussion of pay-to-play or ‘activities fee’ to be charged to students playing sports. This would be a yearly fee for student athletics, regardless if they played 1 or more sports. If a $50 fee per student athlete is charged, the revenue generated is approximately $80K. In reviewing other area school districts, five districts in Chester County have some type of sports activities fee in place. How much is the school district budget for sports? $1.5 million annually; which breaks down to approximately $509 per student who plays sports (including club sports).

Here is an open question . . . does sports activities fee impact participation. The discussion of an activities fee for sports brought up an interesting discussion. Is it fair to only charge for sports, what about other extra-curricular activities, clubs, band, etc.? Some members of the Finance Committee suggested that the activities fee should be associated with those extra-curricular activities that required transportation.

Another way to generate revenue for the school district is advertising and members of the Finance Committee are investigating the concept of paid advertising on Teamer Field, as well as other locations. Two adverting companies that handle this type of school district advertising will make a presentation at the next school board meeting. Generated revenue from this type of advertising was estimated as $30K-95K. Advertising on the sports team shirts was also discussed, as well as school bus advertising. If the district decides to move forward with the adverting concept, there will need to be a policy change.

FLITE is working to raise $85K to fund the after-school homework club. The homework program is included in the 2011-12 budget but is on the list as a possible budget expense reduction. Another expense reduction item under consideration is transportation for some extra-curricular activities ($90K) and summer school ($40K).

Several parents spoke in support of maintaining the quality of education and programming in the district. Many suggested raising property taxes or instituting an EIT to cover the school district budget deficit. If instituted, an 1% EIT would generate approximately $17 million annually. With the township and school district equally sharing those funds, $8.5 million would go to each.

The argument by some in support of an EIT or property tax increase was that your property values are directly tied to the quality of the school district. Therefore, if you want to sustain your property values, you must support the quality of the school district.

What was clear from the Finance Committee meeting is that the administration and school board are running out of options! They encouraged those in the audience and watching from home to contact your state representatives and Harrisburg.

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  1. Many thanks for this update, Pattye.

    A couple of comments:
    1. We continue to see the School Board and Administration working hard to maintain the quality of the program in the face of the escalation in current and deferred compensation costs, but we hear nothing from the beneficiaries of those cost increases. (The pay waiver would be worth $3 million, equal to the current deficit). Is that because the unions have nothing constructive to say, and have decided that the best tactic is to say nothing at all? Shame on them.

    2. But nothing being discussed here will help the long term problem of PSERS. That can not be solved on the backs of new teachers alone. The only recourses are tax increases (local or state) or reduction in the benefits for current employees.

    3. An EIT could be part of that solution (spreads the base, lowers the net cost), but that’s just not going to happen if voters see that all it will do is pay for an unconstrained teacher retirement program.

    4. I do like the idea of an extra-curricular activities fee that applies to all current students. It’s a way to place a little more of the cost on the program beneficiaries. On the advertising, I’d need to be convinced that the benefits of advertising on buses and sports jerseys was material enough to outweigh administrative costs and the cultural change.

    5. And yes it’s easy to make an emotional appeal to property values. Except there is no data that proves that spending more money gives you better results. But let’s think through how it might work: higher spending –> higher taxes –> higher property values (assumption) –> only higher income residents can move in –> more talented and involved parents –> more talented and driven students –> better test results/college admissions. So society migrates more and more towards enclaves of Heinzs and Mellons (Upper St Clair) and Pews and Annenbergs (Main Line). Is that what the elite really want? Is it sustainable in the long run? Or do we want a diverse (even a little) T/E community that introduces our children to the real world?

  2. I would reject an activity fee for sports, and assess a student activity fee on all kids, just like colleges. Earlier John said a fee is just another word for a tax, but in this case, the fee is only assessed on users, not residents, so it’s a more directed version of “cost causers pay.” (Don Clarke’s famous lament about leaving lights on the track — he wanted to have a way to meter the charges to the people walking).
    A student activity fee isn’t even just about extra-curricular activities. The art program and the music program and the technology program and the TV studio and the paper and the yearbooks and more all are assets of the educational program, so sports should not be isolated. Likewise, I would not want any fee tied to the level of participation — I’m pretty sure it would have an effect. 6,000 — $100 a kid (max at $200 per family) would raise $600,000. Make it $200 a kid and you’re 1/3 of the way there. And ask the teachers to do their part instead of either silence relating to “shared sacrifice” or griping about all the rich kids in their class with Daddy’s cars. We need to stop thinking of this community as homogeneous. The solutions are pretty straightforward — it’s the debate that’s painful.

  3. Ray – thanks again for the infromation and comments. I would like to encourage everyone to contact our legislators. There are a number of issues worth addressing:

    1) PSERS (pension) – One of the largest unfunded mandates passed along by Harrisburg to the local taxpayers, and one of the major “budget busters.” It is a mess created in Harrisburg and can only be truly addressed by the state legislature.

    2) Encourage your legislators to review all unfunded mandates and reduce or eliminate as many as possible. (A number of specific bills were recently passsed out of the Education Committee).

    3) SB 911 – this bill would eliminate the Act 1 exceptions (which allow property tax increases over the inflation cap for certain expenses). Passage of SB 911 could make our budget situation much worse in the future, possibly leading to much deeper cuts to the educational program.

    4) Encourage our legislators to make a committment to quality public education and look for ways to INCREASE, not decrease state funding. Marcellus shale tax? A reasonable tax on Marcellus shale would not halt prodcution, and would provide revenue that does not impact the local taxpayers.

    Here is the contact information:

    Tredyffrin PA Senate District 19
    Sen. Andrew E. Dinniman (D)
    One North Church Street
    West Chester PA 19380
    Phone: 610-692-2112
    Fax: 610-436-1721

    PA House of Representatives District 157
    Hon. Warren Kampf (R)
    42 East Lancaster Ave.
    Unit A
    Paoli, PA 19301
    Phone: 610-251-2876
    Fax: 610-640-2357

    Easttown Senate District 26
    Sen. Edwin Erickson (R)
    5037 Township Line Road
    Drexel Hill, PA 19026-4821
    Phone: 610-853-4100
    Fax: 610-853-4136

    Easttown Pa House of Representatives District 167
    Hon. Duane Milne (R)
    18 E. Lancaster Ave.
    Malvern, PA 19355
    Phone: 610-251-1070
    Fax: 610-251-1074

    1. Don’t give me too much credit – our courageous host herself sat through last night’s meeting while I was on the road.

      I’m pretty much in agreement with your points except for increasing education funding. Throwing money at schools merely obscures the underlying societal chasm that is the root of the problem. Economic gains are going to the top 10%. The quality of life for the bottom 50% is heading down to meet the quality of life in emerging nations coming up. It would be nice if there could be a national debate about that.

      And in the meantime: fiscal constraints should focus the attention on how to do things smarter. (But a 50% funding cut for higher education is simply nuts, and surely just part of the political charade.)

      (And, OT, but widening the chasm, I don’t see how converting to a Medicare insurance scheme that skims 30% to insurance companies and leaves sick old people to pay unimaginable premiums is any kind of answer to the federal deficit problem, except for that top 10%. The rest will just show up at the hospital anyway).

      1. Ray,

        You will get no argument from me re 50% cuts to higher education. And as for Medicare, the federal government . . . . . I totally agree it’s a mess.

    2. Kevin,

      1) The PSERS problem was created in Harrisburg, but there is no solution possible from Harrisburg. The (overly lucrative) parameters of the defined benefit plan were set by the legislators in 2002 and can’t be reversed. The taxpayers are on the hook to make the retirement fund solvent and the contribution rates are set. The solution is local. Either raise taxes or minimize labor costs.

      I favor minimizing labor costs. Outsource as much as possible. When bargaining with teachers, minimize salary increases, push less costly health care plans, increase teacher health care contributions.

      2) I agree with your call for minimizing unfunded mandates.

      3) SB911 is a much needed check on school boards. Instead of doing the hard work of negotiating labor contracts in-line with the current economic situation, most school boards take the easy way out by giving into union demands and raise taxes. SB911 gives school directors another excuse to say no to union demands.

      4) Increase state funding?? This is a call to raise taxes to fund the ridiculous compensation paid to TE teachers. TE doesn’t need more money; TE needs school directors that can say no.

      1. Well, you make some good points. But, regarding increasing funding and how that calls for a tax increase, my suggestion was to tax oil shale. That would not impact the local property taxpayers and would not rely on the state income tax either. I don’t believe a reasonable tax would drive the producers away from Pennsylvania.

        1. It’s convenient to think about taxing an oil shale company. But we’re really taxing the stock holders, making leasing contracts to oil shale land owners less lucrative and raising the price of natural gas. Is it a good idea? Maybe. I have mixed feelings about an oil shale tax. It’s easier to tax someone distant from TE.

  4. Kevin
    I appreciate your reference to state mandates, and you know well that even local requirements (fees on construction, road improvements when we got building permits) are a cost burden. But someone said something to me yesterday — that it is harder to do this job now than when I was on the board — and since we overlapped, I’ll lump you in to an extent.
    And I’d like to say I do not agree. Part of the process of being involved in government and dealing with “tough economic times” is not to play games about the cost of doing business. I stayed away from school board politics and business for several years after I left, and only came back on the scene when it was apparent to me that the PSERS crisis statewide was going to be a crisis locally. It’s moot to review, the the reality is that tough times or not, there has to be some strategic consideration of an educational program — which TESD has done very well — but there also needs to be a strategic plan for how to pay for it. You know well that when I was on the board, I advocated diverting variable revenue sources into capital funding or escrows to prevent any illusion that we were running the district at an artifically low level. This PSERS crisis could have been “escrowed” entirely through fund balance from advanced transfer tax revenue. When unable to meet the revenue rquirements of current spending, the tax rate should have been adjusted or a program should have been cut. This “sudden” crisis — is not even a little bit sudden. I do not agree with John P that the Union is entitled to keep what they bargained, because whether or not they bear any “blame”, they do share responsibility for the quality of our district. But the contracts done were not “financed” becaused they were not analyzed in the context of contingency outcomes. The decision to purchase houses around TESD was a costly one — but each step made in the process (moving the ESC functions, renovating the maintenance building, outsourcing bussing and not repurposing the bus garage) have all lacked a strategic direction.
    I have posted here using alternative names because I do not want to point my finger at people I served with, but when the conventional wisdom is that it was “easier” when we were on the board, I think the CW is wrong. Act 1 is a bad act, but it should have made the contracts negotiated easier to do. Now we are — not to put too fine a label on it — in a pickle. We have a contract and a health plan that are not sustainable, and the “hardline” we are proposing for the next contract is moot at best and “no way in hell” at worst….because even if the community can and will endure a strike, it will accomplish NOTHING for the district to stand firm. Status quo — a pay freeze with the same benefit plan — is far more costly than what we can justify. The new hire cost is higher than it needs to be to attract great teachers. So standing firm means only that we avoid raises…and having done contracts, I predict that any amount of “pay waiver” or raise that is frozen while you want for the contract to be resolved will cost you “retroactive pay’ to get it done. And you will need to take that — because the health care plan is just unsustainable.

    So looking for revenues is a stop gap measure — but those artifical tax years are what we are paying for. When costs went up and taxes did not. When decisions were made to “tax to the act 1 limit” without regard to what the costs of running the district were. Strategic planning means more than getting a group of stakeholders in a room and dreaming about the future and the possibilities. Strategic thinking means where are we going, and HOW are we going to get there, and what do we have to do today to ensure we are on the right track.

    Venting to be sure. But annoyed at the impression that the problems we have now are not a great deal of our own political making. Last year when there was discussion about freezing the admin salaries, we ‘yielded” for “meeting objectives” and gave raises. I didn’t publicly object because quite honestly there is a very active market for administrators, but I did object privately, in that if you cannot say not to non-contractual raises, on what basis do you ask contractual employees to hold back? And to long term administrators (in my opinion, anyone with 30+ years in the state, including teachers), there should be NO raises — because 2.5% a year accrued towards your pension is already a lifetime raise….staying here another year entitles an administrator to that. Teachers are not greedy –boards are not sure of the mandate — teacher unions are not reasonable — and taxpayers are not up to speed. It’s not a pretty package.

    Sorry for the length. Lots to say and no place else to say it.

    1. I’d love to see a day when board appointments had to consider political equality…when members of the BOS and the School Board would be forbidden from being members of a political committee.

      I support John’s statement 100%! In fact, in Radnor Township, the elected commissioners have no choice — upon election in November, if you are a political party committee person you are off the committee. Radnor Twp’s Home Rule Charter does not permit their elected officials to serve as political committee people . . . enforcing the idea of leaving the political party hat at the time when you take office. Serving all the people should mean ‘all the people’ not just those that happen to be the same political affiliation.

    2. Thanks for the comments John. Here’ s a link that’s almost comical now when you look at the history of the board….I am including it because you really cannot keep saying it’s the Republicans who called the shots. Until 1995, the Dems had never put anyone up for election for the schools.

      So the wish that we have political equality was in fact true — because the Dems were not engaged, so people wanting to be considered for an endorsement (which wasn’t necessary, but certainly helpful) changed parties to interview with the local Republican committees. I used to say that we had NO party on our board – -and I watched Radnor and LM spend years making decisions because the Rs would run the board and vote to do something, and then the Ds would run against the decision and take over, and it would start all over again.

      So the “partisanship” that exists now is because people outside the “system” saw it as a one party system, when in fact it was a no party system in a one-party process. Once elected, I never again talked to the TTRC much less feared for a future endorsement. The late John Waldeyer came to meetings and knew the subjects, not just the politics I guess.

      1. I was the first registered Democrat elected to the board in anyone’s memory – in 1999. (maybe the first ever). I would point out, however, that it was not a partisan campaign, but rather an independednt campaign on the class size issue. I had both D’s and R’s helping me and no endorsement from either party. When I ran for re-election, I switched to R simply because the D’s at that time had zero organization and would have been able to offer zero money and few workers. Plus, for me it was never a partisan thing anyway. To do it the hard way would have cost me $5000 and a few hundred hours of my life, and there was no reason to do that. (even the “Kids Count” slate of four candidates all ran as R’s, and I know for a fact a couple changed registration to do that – it was simply a pragmatic thing to do, because until very recently, it was believed that you could not get elected as a D – and that was true, except for me in 1999).

        When Karen Cruickshank ran in 2007, it was a different story. The Dems had finally gotten their act together, had lots of workers and spent a lot of money. That was the very first election in which they really made a partisan effort. Karen was truly the first Democrat elected to the board running AS A DEMOCRAT. (By the way, I don’t have a problem with Karen).

        Anyway, when I ran for re-election, I sat for the endorsement of the TTRC and got it. All they really cared about was whether you had the right letter after your name. This was not a moral or ethical dilemma for me since I did exactly what I thought best and had no interference form the Republicans. In fact, in all of my time on the board, I never saw, or even heard of, any such thing.

        Outsiders seem to think there is some kind of smoke-filled back room and you get phone calls from the Republican Committee Chairman telling you what to do. Nothing like it. People on the board do what they think is right, and that’s all. The R’s did not have too much trouble with me because by then we were working hard on reducing our expenses and I was part of that. I had also supported the single high school – not because anyone told me to but because I thought that was the best way to go for the community. That was very unpopular with some of my 1999 supporters. But I always did what I thought was right. This allegation that board members are lemmings is quite false, at least it was for me.

        In my early years on the board, a few Republican Committee people would come around at budget time and all they cared about was are you going to raise taxes, and if so how much. Then one (usually Waldeyer) would plead for you not to do it. And we would do it anyway. So much for the mythical Republican control.

        And – here is proof – if the R’s control the board, why is Karen Cruicshank board preseident? Riddle me that, Batman!

        Conspiracy theories are fun and more exciting than reality, but they are often just theories with no basis in fact. Take, for example, the alleged “hijacking” of the Act 1 Tax Study Commission we keep hearing about. The fact is, almost everybody in our community opposed Act 1 because it was a stupendously bad law. Period. And the Tryedyffrin Democrats (not sure about Easttown) also took a position AGAINST the Act 1 income tax, just like the Republicans did. BOTH PARTIES OPPOSED IT. No one “hijacked” the process. I failed because of its own stupidity.

        By the way, those who now favor an EIT for revenue should not complain that the Act 1 income tax was defeated. Had it been enacted, it would have forever “used up” the income tax for a tax-shifting scheme that WOULD NOT BRING ONE RED CENT OF ADDITIONAL REVENUE INTO THE DISTRICT. Thus, the EIT would not be available for consideration today as a revenue source. Don’t think for a minute that we did not think of that at the time. I highlighted the “no additional revenue” problem in my remarks at the time. It was just another of many reasons why Act 1 was a terrible law.

  5. John – I can not agree more. The Board is once again taking the “easy way out” by asking that the teachers take a freeze and give up contractual increases.
    I also agree that the Board is in over their heads and they need folks that have small business experience. A freind was on the Radnor Board and he said it was the most frustrating experience he ever had — the fellow members had nary a clue as to finance or establishing a solid business plan or budget.
    I am amazed that Jim Bruce is running again — has he ever had a question or positive thought for anything? Is this the best we have???

  6. John,

    I’ll be happy to move on from the TSC. Tell you what, I won’t mention it again unless you do. Deal?

    As for defending my record, hell yes, I will when I am subject to criticism which is illogical and/or not factual. You say you have a right to comment. Yes, I agree. But it is fair to answer such comment.

    Here’s one for you, Batman – you didn’t answer the riddle of why a Democrat is board president when the Republicans (who care about such things) are supposedly controlling the board?

    Here’s another – if the TTRC is so powerful, how come the board has several Democrats?

    As for allegedly ignoring the PSERS crisis, I beg to differ with you. We knew very well that the unfunded liabilities of the pension plan were going to hit home. During all my time on the board, we were adding to the fund balance every year, and we designated fund blance to cover anticipated future expenses, including PSERS.

    No, we did not know the economy was going to crash, or how bad it would be. Nobody else did either. But we were doing fine until that happened.

    One more thing, and then I am done. Andrea says this is all local politics. Well, the game may be played locally, but the rules of the game are made in Harrisburg. We did a good job with those things under our control, but the pension system is a total creation of the legislature. Fixing that alone would go a very long way towards solving the budget problem.

    I’ve said it before, the state has a constitutional obligation to educate our kids, and when all 501 school districts in the state are in trouble at the same time, there is something wrong not with the local boards (unless ALL of them are idiots – how logical is that John?) but rather, there is something wrong with the state.

    Go ahead, keep bashing past boards. If you don’t include Harrisburg, you are tilting at windmills.

    1. You know, you said a lot of things, but I will let the readers look at all of our comments in context and decide for themselves. I just wanted to respond to one thing you said about Karen Cruickshank.

      I think the reason she is board president is because the board members (at least five or more) respect her and thought she would do a good job. The fact that she is a Democrat and was elected by beating a TTRC endorsed candidate (yours truly) and yet she is elected to be president – this shows that partisan politics plays very little, if any, role in internal board deliberations.

      I think that point is sufficiently proven and I will stand by that.

      PS – I like Karen and wish her well. She is in a very tough spot and I hope people will support her and the board as they struggle to find solutions to this very complicated situation we are now facing.

  7. Kevin
    This is why I hate posting under my name, as I in no way meant to suggest that the current board did not try to plan for PSERS issues. What I think is lacking in this discussion is everyone thinks that the PSERS contribution locally was an intentional deferral — NOT. The reason the accrual went from 2% to 2.5% was because the sun was shining and the legislators and the PSERS board were good with it. I’ll admit that sitting on one of 501 local school boards, politics had zero to do with how we viewed PSERS, and when we got a bill for the contribution, we looked at the projections for future payments and were fine with them. There was no sense of getting away with anything.

    As to the Democrats — I won’t even bother going into the history of the fact that several people on the board when I got there were Dems and several that came onto the board were Ds. There was no “D” system, so anyone who was interested in the system simply changed registrations. We cross-filed, so your “native” party was almost moot — it was NOT political. That’s why I included the link from 1995 — I hope a few took a moment to read it. The first “real” Democrat in 1995 was a single issue (perhaps even single meeting from my recollection) candidate who advocated we spend more money. Anyone who grew up in this area knew that was not a platform for success. The class size initiative resonated with parents and as either school board president or Education chair at the time, I authorized a class size study to give that sector a forum to air the issues and really make some conclusions. It backfired on the board to an extent because many members of the Class Size Study Commission would not sign off on the report, privately saying that it was one person’s research and one person’s report. TE wasn’t broken, so the class size initiative was creative thinking, and not a fix like some would have you think. Kevin approached it in a very serious and pro-kid way, and the voters helped him defeat an incumbent.
    The partisan nature NEVER mattered. WHen Dick Schulz was our local congressman in the 70s, he carried this community with (legendary — I’m not looking it up) 87%. …TE was a microcosm of Richard Nixon’s silent majority. We need to drop the notion that it was a party operation. It was what it was. With the efforts to expand the “soccer mom” in the 80s/90s, and post Roe v. Wade, the party designations started to matter more nationally, and ultimately that filtered down to organizing locally.
    I’m not a historian, but living here since 1954 — growing up next to someone who was on the school board when they sold/closed the schools, living across the street from the Planning/Zoning head when Chesterbrook was under consideration — I’ve simply SEEN a lot of changes. I don’t think they are all partisan charged –and not revolutionary, just evolutionary.

    1. Andrea,

      I hope I did not sound critical – your point is the same one I was trying to support – it never was political and still is not – although it may become more so in the future since both parties seem intent on running their own candidates against each other.

      Maybe you are right that it is not harder now, but I am still glad I am off the board.


      1. John,

        In my comment to Andrea (below) I said that things will get more political in the future. In fact, you are correct that recent elections have been more so. However, that concerns getting elected. I was referring to what happens after you get on the board.

        You constantly make the allegation that the GOP controls the board, as in dictates policy, issues, etc. You allege that the board members are puppets and the GOP pulls the strings.That is not correct, and that was the point I was making.

        There is no sinister Repulican hegemony over the school board. Once people get on, they do what they think is best without input or interference from political committees – at least they always did in my day – I’m talking through 2007. That I know is true for a FACT. I was there, you were not. Based upon what I see and hear since 2007, I believe it is still true.

        And the TSC was NOT “political” in the sense you use that term – as in the GOP hijacked the process to achieve a predetermined result. I was on the board and participated in a couple long meetings where we vetted resumes and appointed the TSC commission members (exactly as Act 1 required) WITHOUT ANY INPUT FROM THE TTRC. We did not discuss it with anyone outside the school board. Period. End of story.

        The Republicans had an opinion on the PIT or EIT question, and they were on record. We of course knew what they thought because they said so at meetings. But the Democrats had EXACTLY THE SAME OPINION.
        Again, no sinister Republican hegemony, no cigar-smoke filled back room.

  8. Kevin — I am pleased to see that as a former Board member that you acknowledge that the Reserve Fund is and was intended to cover just the sort of thing we are facing now – a 3 million shortfall…..

    Please please please remind all of the current Board members of this fact and let us move on from further discussions of salary freezes —

    1. Papadick,

      You and I have disagreed many times, but let me say for the record here (as I did many times while on the board) that we have excellent teachers, and they are one of the primary reasons for the success of the district. There are many factors, but the importance of good teachers cannot be overstated. They should be respected and well compensated.

      Some of the benefits they have are beyond anything the taxpayers who pay for all of this have. That is no longer affordable of politically feasible to maintain. But I am sure adjustments will be made in the next round of contract negotiations. I am not sure they should accept a freeze. Many in the rank-and-file might go for it, because they really do care about the kids. It would be a very noble gesture, but given the fact that negotiations will be much more difficult for teachers in the future, I doubt the union leadership (particularly the state level) will allow that to happen. So I think it is a moot point.

      I don’t have a problem per se with using fund balance to bridge the gap temporarily – that is one reason it is there – but unless the economy improves very soon, there is not enough fund balance to bridge the gap for more than a few (couple? three?) years, so that will have to be taken into consideration.

    2. I am not speaking for Kevin, but I do not believe the fund balance is there to handle this kind of issue in any way. It is meant to protect programs from spikes, unexpected revenue shortfalls, contingency issues. To use the fund balance to supplement revenue in a budget process is to ignore the shortfall. I urge you to look at the Jan 2010 archives on this blog where this exact same case was made last year ….and I’ll again beg you all to stop ignoring fiscal reality — we cannot afford the programs we have. Jan 26,2010 on this blog.

      1. Point well taken – bridging a gap temporarily is contemplated, but this is not a temporary problem – it is ongoing from now on for the forseeable future. The fund balance can’t handle this for very many years- changes have to be made to either increase revenue or decrease expenditures or both.

    3. It is fundamentally unsustainable for the growth in government worker compensation to outpace the productivity-driven gains in compensation of the private sector. Add to that, the fact that those private sector productivity have gains have been going not to US workers but overseas, and the gap has become a chasm.

      So the union have a choice: either approach the problem in a spirit of cooperation and phase in an adjustment to the disparities of the last four years, or wait for an abrupt and acrimonious dislocation with the next contract.

  9. No contract will happen unless they settle….so the “status quo” can stay iin place forever. You have to look at the seniority of the negotiators to know where their loyalties will lie in the negotiation process.

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