Guilty Until Proven Innocent?

Imagine if you were walking down the street, minding your own business, when suddenly a police officer comes up and arrests you for walking on private property.  When you ask why you are being arrested, he only tells you that you have violated the New York Penal Law.  Once you finally get to see the Judge, he informs you that you are going to have to prove that you weren’t walking on private property.  You think to yourself, “Isn’t this America?,” but apparently it’s not anymore. 

That is the scariest response that I’ve received to my last post; telling me that the Commack School District’s budget is “illegal” because it violates the New York Real Property Tax Law or the Education Law, and then suggesting that I should explain why it is legal.  That’s not the way it works in this country.  If you want to claim that someone -- especially a public entity -- is committing fraud, then you need to be prepared to explain with specifics.  Ultimately, it comes down to how you craft your argument.  Do you collect facts and then examine them to draw your own conclusion or do you come to a conclusion first (or take someone else’s conclusion) and then look for facts to support it?  Generally, you should be wary of the latter. 

Getting to specifics, if you look the first column “General” on page 19 of last year’s Audit Report (https://www.commack.k12.ny.us/district/auditreport2013.pdf), titled “Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds,” you will see that the District took in $165,338,884 last year and spent $154,635,219 on expenses and an additional $7,043,443 on debt service for a total surplus of $3,660,222.  Compared against the total revenue, that is a surplus of approximately 2.21%.  $3.6 million is certainly a lot of money, but expressed in that percentage, it just isn’t.  Consider it in terms of a wedding.  If someone told you that they budgeted $20,000 for a wedding, but only spent $19,558, would you think that they massively overbudgeted to the point of accusing them of fraud?  Yet that $442 difference is the same 2.21% surplus. 

There is another issue at play here.  Once the budget is set, the School District, as it should, spends the rest of the year trying to come in under budget, either through savings or unexpected income.  Those savings directly decrease the next year’s tax levy.  The bond interest is a prime example of that. [EN] If we are going to start accusing the School District of illegal practices and fraud whenever there is a surplus, then we are going to disincentivize attempting to save money during the school year.  God forbid we are able to save half-a-million dollars on bond interest or supplies.  It’s just not a realistic long term solution.  Its a shortsighted one-off savings that’s not in anyone’s real interest.

People who complain about taxes need to understand that reducing the contingency funds in the budget (regardless of the level of the reserve fund), will only result in a short term savings.  In the long run, it will result in higher taxes, program cuts, or both.  We have no waterfront.  We have no downtown or village.  The same people that complain about the cost of living now will then complain that their homes are losing value because Commack’s single greatest asset -- our School District -- has been depleted.   It’s short sighted and guaranteed to create fiscal stress down the line.  The quick fix of short term tax relief is an easy, but ineffective, solution.  We need to aim higher for both our children and our entire community.

Other than people commenting on whether the International Baccalaureate (“IB”) program is worth the money (and not everyone will benefit from every program; most students don’t get any benefit from Commack’s wonderful special education program, but that doesn’t make it any less valuable), I don’t see anyone generally commenting on the quality of a Commack education.  That should tell you all you need to know. 

Someone claimed that I misrepresented that Mr. Tampellini said about raising taxes or cutting programs if we eliminated all unplanned contingency from the budget and then ran into an unanticipated expense.  Here’s the video of the March 13, 2014 Budget Workshop:  https://www.youtube.com/watch?v=6_U1WufhDwU.  Check out 29 minutes and 40 seconds through 29 minutes and 50 seconds and see for yourself. 

Similarly, if you are going to criticize the comparison between Commack’s fiscal stability and Kings Park’s financial problems by saying that the proposed tax levy increases are similar, then you are missing the point.  Commack’s ‘14-’15 budget includes program enhancements and restorations; Kings Park’s includes program cuts and potentially larger classes.  Those two similar percentages certainly do not mean the same thing. 

Nor is this a Mt. Sinai situation, where that School District apparently overestimated employee benefit costs by approximately $7 million and programs for children with handicapped conditions by almost $5 million, creating up to 14% in surplus funds (Comptroller’s press release here: http://www.osc.state.ny.us/press/releases/oct13/101613.htm).  That false comparison is nothing more than an unrelated scare tactic.  Again, if our District was really doing something illegal or fraudulent, something that is clearly reported every year in the Audit Report as discussed above, trust me, you would have already seen the Comptroller’s auditors in our buildings. 

Fortunately, I have thick skin and an understanding of what I was getting myself into by starting this blog.  I would like to take a moment to thank the numerous people that came up to me in person and outside of the cloak of internet anonymity to either thank me or have a rational, adult discussion about the fiscal issues facing both our School District and our community.  Unfortunately, the people that advocate the short-sighted approach prefer to hide in the shadows of the internet (both under clearly made up names, and fake names that are meant to look real) and hurl insults and veiled threats rather than have an actual intelligent conversation about issues that are critically important to Commack as a whole. That is why I have chosen not to respond in the comments, and I will continue to refrain.

[EN] To clarify, that came through the District’s ability to refinance its bonds at a much lower interest rate due to the reaffirmance of its previous Aa2 bond rating based on, among other things its “conservative budgetary practice and financial management.”  Check that out here: https://www.moodys.com/research/Moodys-assigns-Aa2-rating-to-Commack-Union-Free-School-Districts--PR...