by Martin Cantor, LI Business News
While talking about the federal budget, former U.S. Senate Minority Leader Everett Dirksen was believed to have said, “a billion here, a billion there, pretty soon you’re talking real money.”
The Republican from Illinois could have well been talking about the budget reserves stashed away by Long Island’s school districts that have now reached a reported $2.44 billion, nearly 28 percent of the $8.76 billion in school taxes paid by Long Islanders for the 2018-2019 school year.
School administrators will argue that the practice of growing cash reserves at the school district level, rather than reducing school property taxes, gives them greater fiscal flexibility against reductions in federal and state aid or unanticipated expenditures. However, an equally important question is whether this practice deprives voters and taxpayers of knowing exactly what their school taxes are paying for.
Whether fund balances are either restricted to specific identified purposes, unrestricted so as to provide a cushion for non-budgeted unexpected spending desired by school districts, or appropriated to support spending not funded by property taxes or state revenues, because of the accumulated magnitude of these reserves there cries out a need for more transparency in how the fund balances are accumulated and used.
The growth of these reserves is troubling, especially in light of how unaffordable Long Island is becoming, with school taxes one of the primary culprits and with school boards resistant to control spending and to consider consolidating districts in order to reduce taxes and costs.
Because of this there is a need for more information and better transparency by school districts than the tax report cards provided to taxpayers prior to presentation of proposed school budgets for approval or rejection.
There should be open and conspicuous presentation of reserves, how they were generated, why they were generated, why they are needed, and the impact on property taxes should reserves be kept for future needs or be used to reduce school property taxes. Justifying the accumulation of reserves for fear of federal and state aid reductions is just not good enough, and indicates an unwillingness of school districts to reign in spending.
That school districts are now beginning to call for elimination of the two-percent tax cap on spending and accumulating unrestricted fund balances that exceed the four-percent legal limit established by state law is a troubling sign that school districts have no desire to contribute to making Long Island affordable.
Martin R. Cantor is director of the Long Island Center for Socio-Economic Policy and a former Suffolk County economic development commissioner.