The Long Island School Tax Dilemna

Since school taxes account for 60% or more of the real estate taxes in Long Island, and that ever-growing burden has been widely recognized, it is deeply disconcerting when Newsday this morning ran an article about how there was a wide disparity between the projected school tax for this year (projected when budgets were voted on) and the actual tax rate recently implemented. School districts like Roslyn, which projected tax increases below 2% are now actually imposing taxes greater than 4.5%. Across Long Island, the actual tax being imposed is substantially greater than the projections.
Several reasons have been cited, including: commercial tax assessment reduction resulting in a lower than anticipated tax collection; previous residential tax assessment appeals that lowered tax collections, etc. Whether that is the complete reason, or it is also a matter of "political spin," where school budget proponents use a favorable estimate when they are campaigning for the budget; or the overall economic crisis; or lower than anticipated grants received - - it turns out that homeowners end up paying for the miscalculation.
That being said, the real issues are the way our schools are paid for; the efficiencies or lack of efficiencies built into the present system; state and federal unfunded mandates. And though, lots of people complain about the costs, the debate always becomes a polarizing one between parents who say, "The children deserve the best," and stressed-out homeowners, who say, "It costs too much . . . cut . . . cut!" Yet neither side kis fully
examining all options. I truly believe it is NOT a matter of how much it costs to run schools, but how the money is spent! What efficiencies are schools not using that could save substantial monies while not having any adverse educational effect. Because it has never been demonstrated that educational quality is simply a matter of how much money is spent! For example, in New York City, there has been some evidence that the use of privately run Charter Schools create better educations, often at lower costs. Here on Long Island, for example, schools use varying class period lengths, ranging from 40 minutes to one hour. Most educational studies have indicated that the shorter periods create more effective learning because of attention spans. In addition, because of the way many teacher contracts are structured, the one-hour length creates an inability to get as many classroom hours per teacher, thus requiring hiring more teachers. Some high schools on Long Island use the One Principal/ One Asst Principal plus deans model, while others use the Principal, Asst Principal for every grade model, which obviously is a costlier model. Yet each model has its proponents.
On Long Island, different school districts range in size, yet each hires a Superintendent and staff, so therefore the larger districts enjoy economies of scale, and thus lower costs per students.
Similarly, there are potential savings if districts would use more centralized purchasing. In Nassau County, some school districts utilize BOCES to create better economies, but there are many more savings. For example, joint negotiating for buses, etc., would create savings for most districts.
Homeowners must demand accountability, or they give up their "right to complain." The methodology of voting for school budgets, where defeating a budget creates an automatic contingency budget, which saves little money but mandates how the money is spent, often creates an even worse alternative. We deserve better, and must demand a better, more streamlined, more effective and efficient system, which better educates and prepares our children.
Enough of being told, "We do it this way because that's how we've always done it." It's time to think outside the box!

HEALTH PLAN- Where we are really at?

Many have reported that the first step on achieving meaningful health care reform has been achieved when the US House of Representatives passed a nearly 2,000 page bill by the vote of 220- 215. It should be noted that only one Republican voted with the majority, and several more conservative Democrats voted against the bill. In order to get this bill to pass, the majority approved of very strong language prohibiting any funds to be used for abortions. The next step is for the Senate to vote on a health bill, and since the version in the Senate is considerably different from the bill in the House, if the Senate passes a bill, it would then go to a Senate-House Joint Committee gto "hammer out" a compromise bill. That bill would then have to be voted on by both the House and the Senate, and if approved, would then go President Obama to sign into law. It is very important to realize that this is a long process.
Even the Senate Majority Leader Harry Reid has said that he has doubts that the legislation can even be voted on in the Senate this calendar year. The Senate filibuster rules also makes it that you need 60 of the 100 Senators to even bring a bill to a vote, and, at least publically, the Senate Republicans have almost nearly stated objections. In committee, the only Republican to vote with the majority was Senator Olympia Snow of Maine, and even she has said that she will not support a bill that includes the so-called "public option." Republicans have stated that this bill should emphasize reducing health care costs, and that the US economy cannot afford anything that will further increase the deficit. Because of all the various provisions of this legislation, neither supporters nor opponents are 100% clear on all the provisions. The only thing certain is that both sides will "spin" the issue!
Because of all the public discussion on the issue, my belief is that some "watered-down" version of a bill will eventually pass, and that both sides will claim victory, and how they have served and protected the American public.
What is truly uncertain is exactly who will really benefit from this legislation, exactly how much will this really cost, will health care be improved in this country, who and what will suffer, and what are all the long-term and short-term ramifications of either action or inaction on this issue. While everyone would tell you that they believe that everyone should receive quality medical coverage, does this, in the long-term address that? How would the costs of medical malpractice insurance, unnecessary medical tests, etc., be impacted by this legislation? What works and what does not work in other countries that have Universal coverage?
Doesn't it seem that the public should be truly informed about such important legislation? It may be an excellent paln - - it may be horrendous; but we have certainly not been informed of how the 85% of Americans who presently have medical coverage will be affected (will their insurance benefits improve; will it cost less; will there still be an incentive for doctors to practice; will drug approval be impacted; will alternative medicine be considered; will there be more provision for enhanced preventative medicine; etc?). How much will the plan really cost, and what protections are built in for the American taxpayer? How will this plan save the consumer money? If there are taxes that will be imposed to pay for this plan, what will be the potential negative impact on the overall economy, and on employer-provided health care? What will be the impact on other medical treatments such as: dentistry; optometry; chiropractry; alternative/ holistic practioners?
While I certainly don't know the complete answer, I believe we should ALL be asking some important questions!

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SORTING THROUGH THE ECONOMIC NEWS

Last night, news media were reporting that they anticipated the jobless rate to rise slightly to 9.9%. At around the same time, it was announced that President Obama would today sign into law a bill that would: (1) extend unemployment benefit eligibility by up to an additional 20 weeks (meaning to a maximum of 99 weeks, if eligible- the maximum is for those 26 states where unemployment exceeds 8.5%); (2)extend and enhance the New Homebuyers Credit from November 30th until June 30th (This bill requires going into contract by April 30th and closing by June 30th). This bill will now NOT only provide first time buyers a tax credit of up to $8,000, but would extend to homeowners who've lived in their present home at least five of the last eight years (at a credit of up to $6,500); and (3) a modification of the law for businesses that have had losses to offset gains for more years back than the present law permits, thus hopefully freeing up cash flow for corporations.
Early this morning, the official joblessness rate was announced as a higher than anticipated 10.2%, the highest unemployment rate in 26 years. What is even more disconcerting is that this figure does not account for those no longer seeking employment, or working part-time, or in much lower positions. In addition, the average US worker's work-week is now averaging approximately 33 hours per week, one of the lowest averages in many years. One would therefore expect that the stock market would have a "correction" from yesterday's increase, and stock market indexes did indeed open sharply lower this morning.
What this means is that our political leaders need to seriously and immediately address the most urgent economic condition facing this nation today - - - unemployment and under- employment! While I believe the bill being signed today is both necessary and helpful, we now need to apply pressure on elected officials to use some "common sense solutions" to address both employment and other economic issues. Unfortunately, it is uncommon for political leaders to use "common sense." (Is a political leader using common sense an oxymoron?)
When I consult to a business, organization, or individual, I explore alternatives and explain all possible ramifications of actions or inactions. Isn't it about time our politicians did the same thing?

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Economic & Political Developments, & THE "SPIN"

Election Day was a busy day in the US yesterday. Oh, not particularly at the polls, where light to lighter-than-usual turnouts of voters at the polls yesterday. It was a "spinner's holiday" because any Democrat defeat or Republican victory would be "spun" into a statement on the President. Corzine's loss in New Jersey was more because of the unpopularity of the Governor and his policies, as well as voter anger about taxes, than any type of national indicator regarding the President (in fact, in NJ, exit polls indicated that over 55% stated that their vote had nothing to do with Obama). Similarly, nobody should have been terribly surprised with the Virginia gubernatorial result. But, President Obama brought this "spin" upon himself by campaigning so often in Virginia, and especially in New Jersey. Nationally, ansd especially in the New York metropolitan area, it was a bad Election Day for incumbents, who an angry and anxious electorate took their despair and unrest out on. It reminded me of the line from the movie, NETWORK,"I'm mad as hell and NOT going to take it an ymore!"
The US House of Representatives indicated that it will probably vote this week on both an extension and enhancement of the popular New Homebuyers Tax Credit. The goal stated is to get the bill to the President by next week, far ahead of the November 30th deadline. Critics claim that there really has not been that much of an economic advantage, because those that bought houses would have done so anyway. That is probably somewhat true; however, what is not stated is when, and the economic urgency of making the housing market healthy sooner rather than later.
The "spinners" are also having a field-day over the reported jobless numbers. "Only" about 203,000 more jobs were lost last month, so since this is NOT worse than expectations, the stock market appears to be celebrating, at least on a short-term basis. That is until the next report, and someone "spins" the numbers another way.
The hot news this morning is the report that NY Attorney General Andrew Cuomo is going after Intel for anti-trust violations, similar to the recently settled suit in Europe. Are we supposed to be surprised that Intel applied pressure and coercion on PC manufacturers to use their chip, instead of their competitiors. However, since Intel already dominates the chip industry with approximately 80% of the market, how much coercion was really necessary? Anyway, it gives the politicos and the press something to divert their attention, now that the elections are over.
Our political leaders still seem to be hiding from the real central economic issue-- joblessness. Until the American public regains their confidence that jobs will actually be restored as opposed to lost, and that there will be both job creation as well as job security, our economy will have an uphill battle to recovery. We need to open our eyes, and ask why. We need to question the status quo. We need to have the politicians know that the time for rhetoric is over - - it is now time for real action. Change is just a word unless it becomes an action!

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PERHAPS SOME GOOD ECONOMIC NEWS, FINALLY

he 3rd Quarter Gross Domestic Product (GDP) figures came out, and the GDP grew by a better than anticipated 3.5%, the best GDP news and first growth in a year. Senate Democratic Majority Leader Harry Reid's office has announced preliminary agreement on BOTH extension of, and enhancement to, the 1st Time Homebuyers Credit. The agreement in the Senate calls for extension of the credit which was scheduled to expire at the end of November to April 30th contract dates, as long as the closing is by end of June. The enhancement to the credit calls for a lesser credit (but still a very significant $6,500 credit) to be given to people who wish to sell one house and purchase another, as long as they lived in their first house at least five years. While critics say that people would have bought houses anyway, even if there was no credit, common sense shows that since there was a spike in 1st time house sales during that period, saying "it would have happened anyway," may be no more than political posturing. Of course, for this to take effect, the full Senate and House have to agree, and the President needs to sign into law. If you believe, as I do, that it is better to help people than the big corporations and banks (many of which got into trouble because of either their own greed or mismanagement), then I urge you to let your government officials know that you want this credit extension and enhancement.
Studies indicate that an essential part of economic recovery is a health housing market. These steps will help create that during this crucial time period. Most economists believe that the worst of the recession will be over by the end of the 2nd quarter of 2010, and so this "shoulder" period that the credit will help solidify is truly urgent.
We must also urge our elected officials to address the joblessness rate, putting people back to work in retrained positions, to help the US regain its position among the elite economies of the world. We have been let to believe that this is a worldwide crisis, which by and large it is. However, nations like Norway have very low unemployment rates (estimates are between 1.8%- 2%) because they have positioned themselves toward energy independence. China is another example of a country which has benefited from the economic weakness of other nations during this time (for example, a Chinese company is in soloe discussions with Ford to purchase Volvo, and another Chinese company has discussed purchasing Hummer).
We need to build upon these promising bits of economic news, and urge that our government officials understand that our number one priority has to be restoring the economy, reducing joblessness, and a health housing market. If the US does not have that as a base, then there will be little chance of other programs succeeding. We, as a nation, cannot continue to have huge and growing deficits, without a sound plan for recovery.
We also need to let politicians know that we are tired of empty rhetoric, but need detailed thinking that considers both the long-term and short-term ramifications of our actions.

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It's Important to Extend & Expand First-time Homebuyers Credit!

As always, politicans are endlessly debating and posturing regarding the extention of the First Time Home Buyer's Credit, presently scheduled to expire on November 30th. It is interesting that there is still no extention, considering that most experts credit this Credit with reinvigorating a badly sagging real estate market. Nationally, it is estimated that home prices have now come back- to 2003 prices. The third quarter of 2009 actually showed an increase in sales, in most parts of the country.

However, there is still much uncertainty in today's economy. Polls show consumer confidence has not yet been restored, and that the major concerns are the recession and job security (high joblessness rate). Historically, a healthy housing market is essential to a properly functioning economy. While the stock market has come back more than 25% from its recent low, it is still far below the level of a couple of years ago. The extention of the housing credit is an effective way to keep the housing market stable.

At this time, we not only need an extention of the 1st Time Housing Credit, but an expansion of the program, so that more individuals are covered. Items that should be expanded include: Income requirements (allowable income should be increased); Broader, looser definition of 1st time Buyer should be utilized; Partial Credit should be considered for anyone purchasing more expensive house; etc.

I urge everyone to contact their elected officials as soon as possible, and urge them to both extend and expand the Home Buyers Credit.

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