April 2, 2013

In My Opinion: Health-care costs must be controlled

Our assets are less than what we owe, and it is getting worse.  We are paying taxes in installments, and already they are talking about a new budget with another increase.

Death and taxes, both inescapable, but it is sad to say the former is looking more and more like a vacation cruise.

The 2011-12 audit for Beekmantown Central School shows liabilities of the district were larger than assets by an astounding $5 million. Plattsburgh City School District’s audit shows a similar scenario, with net assets decreasing by nearly $7 million.

Falling net assets is bad for a district. It can adversely affect their credit rating, thus increasing the cost of borrowing money.

Why is this happening?

Districts granted unsustainable employee health-care benefits, which has been a major contributor to staff layoffs, program cuts and escalating taxes. Boards cannot tax their way out of this mess because it is forcing people into economic hardship and out of their homes.

Clinton County schools faced plummeting enrollment from 2005 to 2011, with a net loss of nearly 1,600 students, or 12.4 percent. Despite this obvious distress call, some districts resisted downsizing, which kept payrolls and benefits gobbling the lion share of the budget.

Haphazard management is threatening the solvency of our schools and your dreams of a better future for your children.

Plattsburgh School District has promised to pay a staggering $102.7 million for future retiree health care and has no money set aside to cover the bill. Beekmantown School District has promised to pay $93.5 million with no money set aside. These liabilities are increasing by millions each year.

What happens when this IOU cannot be paid? Is it fair to retirees, employees, taxpayers and, most importantly, students to promise something we cannot deliver?

Health care is a major cost driver that must be controlled. The current plan, Plan A, is expensive, inflexible and obsolete. Terms of Plan A were created about 30 years ago when health care was inexpensive and is much more generous than private-sector plans.

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