Is “it” sustainable? Is “it” worth keeping? If yes, then how?

http://www.bls.gov/emp/ep_chart_001.htm

$15 billion deficit in 5 years

Even though “education pays”, caps on state and local revenue will mean schools have fewer resources and cannot sustaincurrent levels of investment.

“Prime Earners” LOST“Early Career

Earners” GAINED

The Long Island Regional

Economy

In 12 years, Long Island’s income dropped from 38% above the state average to just 11% above.

Economic Downturn:

(Other: T. Assts., T. Aides, Clerical, Custodial, Maintenance)

Note: Data for Little Flower, New Suffolk, Wainscott, not included in wealth group breakdown.

Source: LIEC Budget Impact Survey 2011-12 (preliminary results as of 9/19/11)

Source: LIEC Budget Impact Survey 2011-12 (preliminary results as of 9/19/11)

Two-year Change (Spending, not enrollment)

Teenage Parenting/Hospital Drug TutorialAlternative Schools

Long Island High School for the ArtsOutdoor & Environmental Education

Arts in EducationRegional Summer School

Career & Technical EducationSpecial Education

Graphic Arts and PrintingCommunications and Agency Planning

Personnel/Certification Svc.Transportation Services

Technology ServicesDistrict Telecommunications

Food ServicesInterscholastic Athletics

Health and Allied ServicesCurriculum Instruction and Technology

Cooperative BiddingFacilities Rental

Supplies/MaterialsTransfer Charges

Salaries/Contracted ServicesRetiree Health Benefits

Health/Pension BenefitsCapital Projects and Debt Service

Tuiti

on-B

ased

In

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ction

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ams

Supp

ort S

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2010-11 Change

2011-12 Change

Two-year Change (Spending, not enrollment)

Teenage Parenting/Hospital Drug TutorialAlternative Schools

Long Island High School for the ArtsOutdoor & Environmental Education

Arts in EducationRegional Summer School

Career & Technical EducationSpecial Education

Graphic Arts and PrintingCommunications and Agency Planning

Personnel/Certification Svc.Transportation Services

Technology ServicesDistrict Telecommunications

Food ServicesInterscholastic Athletics

Health and Allied ServicesCurriculum Instruction and Technology

Cooperative BiddingFacilities Rental

Supplies/MaterialsTransfer Charges

Salaries/Contracted ServicesRetiree Health Benefits

Health/Pension BenefitsCapital Projects and Debt Service

Tuiti

on-B

ased

In

stru

ction

al P

rogr

ams

Supp

ort S

ervi

ces

Adm

inis

trati

on /

O

pera

tion

s

2010-11 Change

2011-12 Change

Alt. Ed.

TOP GROWING JOBS THROUGH 2018

CAREER & TECHNICAL EDUCATION (CTE)

Network Systems Personal Care Aides Home Care Aides Physical Therapy Aides Medical Scientists Pharmacy Technicians Physical Therapy

Assistants

Source: NYS Labor Department

Computer Network Technology

Nurse Assisting Medical Assisting Physical Therapy Aide Medical Lab Technician Pharmacy Technicians Physical Therapy Aide

Source: Barry Tech Catalog

35%35%

IMPACT OF THE TAX CAPSCENARIO A (FLAT AID)

Sources:

2011-12 Legislative Budget State Aid includes Building Aid

2011-12 NYSED Property Tax Report Card

Assumptions: 2.5 % rollover, same fund balance applied, 2% cap

Baseline2010-11 2011-12 2012-13 2013-14 Notes

Payroll ERS $69,392,150 $69,392,150 $69,392,150 $69,392,150 TRS $92,811,474 $92,811,474 $92,811,474 $92,811,474 Total $162,203,624 $162,203,624 $162,203,624 $162,203,624

Pension ERS Rate 11.4% 16.0% 18.7% 21.0%Estimated by ERSTRS Rate 8.6% 11.1% 12.5% 15.0%Empire Center estimates 22%

ERS $7,910,705 $11,102,744 $12,976,332 $14,572,352TRS $8,000,349 $10,311,355 $11,601,434 $13,921,721Total $15,911,054 $21,414,099 $24,577,766 $28,494,073

InsuranceHealth Insurance $31,625,000 $36,210,625 $41,461,166 $47,473,035NB Share 80.0% 80.0% 80.0% 80.0%To be negotiatedNB Cost $25,300,000 $28,968,500 $33,168,933 $37,978,428Increase 14.5% 14.5% 14.5%Estimated by NB

Ret. Ins.Health Insurance $9,150,000 $10,476,750 $11,995,879 $13,735,281NB Share 80.0% 80.0% 80.0% 80.0%To be negotiatedNB Cost $7,320,000 $8,381,400 $9,596,703 $10,988,225Increase 14.5% 14.5% 14.5%Estimated by NB

Total Insurance $32,620,000 $37,349,900 $42,765,636 $48,966,653

Total Payroll $162,203,624 $162,203,624 $162,203,624 $162,203,624

Pension 15,911,054 21,414,099 24,577,766 28,494,073 Insurance 32,620,000 37,349,900 42,765,636 48,966,653 Total $210,734,678 $220,967,623 $229,547,026 $239,664,349

Annual Increase $10,232,945 $8,579,403 $10,117,323Annual % Increase 4.9% 3.9% 4.4%

Increase over 2010-11 $10,232,945 $18,812,348 $28,929,671% Increase over 2010-11 4.9% 8.9% 13.7%

CONFIDENTIAL/SENSITIVE Please don’t release these numbers or use this slide in its current form. This is provided only as a template for you to be able to perform a similar apples—apples comparison of labor cost increases due to pension and health increases. Or it can be used to do scenario planning for negotiations.

Sample of percentages 60% - Jim L. 40% - Tom R. 50% - Chuck 60% - Mark 60% - Jackie 54% - Jessica

Sample of issues Growing faster than

inflation or 2% Can’t create reserves RICs subsidize

neighbors Other cross-

contracting issues

High graduation rates: CTE Alt Ed. Special Ed.

Strong Adult Ed. Regional admin

capacity BOCES create service

capacity equity Shared services =

cost savings

Superintendent searches

Regional school improvement capacity

Prof. Dev. Capacity Regents Reform

Agenda capacity New programs and

services

Constant existential threats: BOCES Aid District

Superintendent Co-ser regulations

Competition with schools: For students For identity For resources

Lack of understanding of what BOCES are

Rapid leadership turnover in some areas

New programming models: On-line learning Regional High Schools AP/IB/specialty

New non-instructional services: Transportation Central Business Office HR, purchasing, etc.

Opportunities to help Big 5 (CTE)

Functional consolidation

Common core as common platform

Districts would rather cut our staff than theirs.

Discretionary budget shrinking under tax cap.

Hard to coordinate regional action

No way to spread overhead costs

Appears as “cost item” in district budgets

Costs increasing faster than 2%

Co-ser process not nimble, not aligned to RTTT/RRA

OPEB will overwhelm A/O

No true “business” model

Competition with local mom/pop business

Issue Yes No

Alternative Ed. Shrinking?

CTE Shrinking?

Special Ed. Shrinking?

Adult Ed. Growing?

Admin. Services Growing?

Technology Services Growing?

Professional Dev. Svc. Growing?

Other ??

Is “it” sustainable? Is “it” worth keeping? If yes, then how?