2010-11 School District Budget
by Alex Saitta
April 16, 2010
Question: Alex, what is the latest on the school board? Letís start with the building program.
Alex: When Mendel Stewart was named the interim Superintendent, we discovered the cost of the plan had ballooned to $450 million and it was about to blow-up. Thanks to the work of Dr. Stewart, Bob Folkman, Jim Shelton and Henry Hunt, the plan was brought back from the brink and it is now on budget.
Question: How were the costs brought down?
Alex: The size of the new schools have been reduced, and we basically said to the contractors if you didnít bring down the costs to the market rate, weíd look for someone else to build the schools. Easley and Pickens high schools will probably cost about $56 million each, Daniel about $49 million and Liberty $42 million.
Question: Whatís the bad news?
Alex: When they held the referendum in 2005 they said $197 million would solve the building problems. When that was voted down, the board rammed through the Greenville Plan, saying $315 million would solve it. Now the budget is $365 million, however, revenue has been $403 million. While the plan is to limit spending to $365 million, with that extra money there, I fear it will be all spent at some point.
Question: How did the revenue grow to $403 million?
Alex: When the Greenville Plan was passed in Nov. 2006, they only had a plan to get the money. They didnít have a construction plan, so for nearly 3 years all they did was draw and redraw the plans, buy some property and push around a lot of dirt. During that time the school district earned about $47 million in interest. While that was a gain for the district, taxpayers made $47 million in debt payments during that time. Borrowing the money 3 years before the district actually needed it indirectly transferred another $47 million from taxpayers to the school district. There was also some additional borrowing that occurred until we uncovered that was going on and put a stop to it.
Question: Whatís this I heard about a ďRenewal and Replacement PlanĒ?
Alex: The district came to the board with more facilities needs, this time for the existing buildings. It appears to have a $29 million price tag. If this building plan saga doesnít convince you we need professional money managers in charge of school funds, I donít know what will. Like at all levels of government, theyíre going to spend us into ruin.
Question: Give me an example of the waste you are talking about.
Alex: One of many -- the 23 acres the district bought for $60,000 an acre across from Daniel High. Their aim was to put the new football field there. After they drew the plans and presented it to the public, they realized it was unsafe being on the other side of Highway 133. They land is now just sitting there, a waste of $1.4 million.
Question: What was the board thinking?
Alex: I voted against it because the excessive cost per acre. I believe Shelton, Brice and Kay voted against it because they saw the safety issue. Youíll have to ask those that voted for it what they were thinking.
Question: Letís turn to the budget for 2010-11...
Alex: We are slowly coming out of the worst recession in 30 years. Overspending and the resulting high debt and taxation levels are weighing on the economy. I suspect we are in a long-term economic slide. This past decade average annual GDP growth was only 1.9%. It was the weakest decade for the economy since the 1930ís.
Question: 1.9% annual growth rate. Where does that put the U.S. relative to other countries.
Alex: We have trillions of stored up wealth and assets, unlike any nation on earth. That aside, the additional growth this past decade was similar to that of a third world country like Iran or Barbados. What I think is saving this country from a lot of homelessness and even social unrest that is associated with low economic growth is the massive amount of government payments made every month directly to citizens or on their behalf.
Question: Like what?
Alex: Unemployment benefits for up to 99 weeks. Disability payments. I'm sure everyone of us can count a number of people they know who get a government disability check. The figure has skyrocketed since 1984. Click here. Food stamps, Medicaid, social security, Medicare, the list goes on. I'm not defending those programs, but the reason we don't have those problems right now is all the government checks being cut every month.
Question: What is your take on that?
Alex: It is all borrowed money and most of that borrowed money is coming from abroad. Sooner or later the Chinese or those in the Middle East will slow their lending to the U.S., interest rates will rise, the economy will slow and the government is going to have to make a choice to either: a) cut spending and put a lot of citizens on the streets, b) allow interest rates to rise and choke off economic growth, c) print more money to keep interest rates down in the short run, but create a long-term inflation problem or d) make all sorts of deals with the Chinese and foreign lenders to keep the credit flowing.
Question: Not much positive there, huh?
Alex: What's to say? We've been overspending for decades, raising taxes and borrowing to make it all work. The high debt levels and tax rates have been slowing growth for about a decade now. If it wasn't for the massive government payments going to citizens, the fallout would be glaring. Heck, there was a near financial collapse in September 2008. It's not good.
Instead of spending less, the government is spending more and the situation is getting worse. Congressman Paul Ryan of Wisconsin called it the most predictable crisis. Unless our leaders move to cut spending or we get lucky with a major technological advance to boost income, it is going to all hit the fan sometime in the next 5 to 10 years.
Question: Back to the here and now. You talked about how overspending in the public and private sector led to this long recession. Where did the Pickens County school district overspend?
Alex: According to the school district audit, the district added 505 full-time positions from 2003 to 2008, while enrollment rose only 248 students. After I published those figures in a Greenville News letter to the editor, the district office then said their published figures were incorrect and hiring was lower.
Alex: That was my thought. I suspect they really donít know how many they hired. Either way, it was obvious the district was overhiring at the time and that was the main reason I voted against 4 of the 5 budgets during that period.
Let me read a quote from the Easley Progress in 2007. ďIn the 2007-08 budget, the number of employees is growing more than enrollment, Alex Saitta said. Thatís unwise. When you add that much bloat in the good times, when a recession hits and revenue falls, it will make it more difficult to provide needed services to students."
Question: Thatís whatís happening now. The Pickens County School District deficit is $6 million for 2010-11. Whatís their solution?
Alex: A combination of things. They are starting to make some cuts, although I donít agree with a lot of their choices. Our district as well as most others are pointing the finger at the state legislature or looking to raise taxes or fees. The legislature give more than 50% of the budget to public schools. No reason to blame them.
Question: Whatís your solution?
Alex: The district's past overspending is playing a part in this, so the district needs to stop complaining, stop asking for more money and do whatever one else is doing Ė better manage the money they already have.
Question: Is that why you voted against the 105 lay-offs, 30 of which were teachers?
Alex: Yes. Laying off teachers will hurt us academically. Instead, they should have cut administrative salaries, their staffs and the excessive number of days they are paid. The curriculum director is paid $105,539, finance director $101,300, the public relations person $81,055, and seven principals are paid more than $95,000. I know they are talented, but we no longer have the revenue to pay them all that.
Question: It sounds like you donít agree with their priorities.
Alex: Hereís another example. Employees are given between 12 and 15 paid sick/ personal days a year. This is in addition to holidays during the school and the summer off for most. Plus, in most organizations, if you donít use your sick days, you lose them. In the school district you can accumulate them for future use, or when you leave the board has an option to pay you a bonus for up to 45 of those days. Despite the $6 million deficit, on April 12 the board voted 6 to 2 to give employees who are leaving a $50 bonus for each sick/ personal day they didnít use. The estimated cost is as high as $250,000. My logic was, donít pay a bonus and save the money to preserve 5 teaching jobs. Jim Shelton and myself were the only ones who voted against it.