By HOLLY SIMS and NANCY ALLEN
---- — 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.
Three schools in the Clinton-Essex-Warren-Washington Health Insurance Consortium have already saved millions by switching to Plan B.
Plan B has the same terms as Plan A with three cost-saving changes. Keep in mind that under Plan B, inpatient, emergency room, ambulance and X-ray/lab costs are still covered in full. Most plans today have a patient responsibility for hundreds of dollars for these services.
Plan B has a different deductible, maximum out-of-pocket and drug coverage than Plan A.
The $50 individual/$125 family deductible under Plan A would change to $250 individual/$750 family under Plan B.
The out-of-pocket maximum changes from $400 individual/$400 family to $500 individual/$1500 family.
The drug coverage changes from a deductible/co-insurance (or mail order 90 days at $8) to a three-tiered co-payment of $5/$15/$30.
No one likes change, but people, businesses and even schools need to adapt to survive. Financial shortfalls faced by these schools will not go away without change. Kicking the can down the road is no longer an option. Each additional year that this situation goes unresolved compounds the risk of insolvency.
Many boards of education have ignored this problem for too long. They and union leadership must understand that the switch is inevitable.
The boards have full knowledge of the damage unnecessary taxation has done to families and how program cuts adversely affect students. It is irresponsible stewardship of taxpayer dollars and misleading to retirees and employees to continue to ignore the looming health-care bomb.
Call or email your board of education and vote for a responsible board candidate on May 21.
For more information, please visit www.unitedforthekids.org.
Holly Sims and Nancy Allen are board members for United for the Kids Inc.