Wednesday, May 25, 2011

Long Island School Debt, Ponzi game at play

School debt soars on Long Island

Looks like a PONZI game to me. Keep on taking debt and enjoy the amenities and then pass the burden over to the next generation of long islanders. The very reason we are now crying foul about high property taxes today is due to this Ponzi game that was played by our previous residents.

They approved all the goodies to the school employees and now its our time pay those benefits and also pay the current employees if we want a decent education for our kids, double trouble. A Ponzi game works till its a pyramid, as soon as the base stops expanding it makes it unstable and ready to topple. Have fun While it lasts as we are not growing any faster and people are leaving Long Island and New York.

Long Island's school districts are saddled with $3.7 billion in long-term debt, the price of years of borrowing for construction and improvements ranging from solar panels and upgraded ventilation systems to science labs, refurbished auditoriums and updated athletic fields.

While the state picks up part of the tab -- in some cases, the majority of it -- property owners, too, are on the hook for this fixed cost, which is plugged into district budgets already straining under dramatic cuts in state aid and the expense of government mandates.

Debt service on the Island's school district bonds last year totaled $468.9 million, up from $146.1 million in 1990, according to the state Department of Education.

As with any IOU, the piper must be paid.

"The thing you have to consider is, what is the alternative?" said Wendell Chu, superintendent of the East Islip school district. "This type of debt that's being picked up is generally for capital projects that are not easy to include in regular budgets."

The annual debt service is a small piece of a school district's overall spending, which also includes state aid. Last year, debt service ate up 4.5 percent of total expenditures in the Island's districts -- up from 3.1 percent in 2000 and 3.8 percent in 1990.

In the 1990 fiscal year, Nassau and Suffolk school districts had a combined $542.6 million in outstanding bonds, according to data provided by the state comptroller's office. By 2010, those bonded debt obligations had grown to $3.7 billion. Adjusted for inflation, that's a 309 percent increase.

Consider Syosset as one example. When children were dismissed from Syosset's schools in the summer of 1990, paying off the district's long-term debt bonds would have taken about $7 from the pocket of every man, woman and child in the district. In 2010, the payoff was $1,389 per person. The district's bonded indebtedness grew in that time from $225,000 to $47.5 million.

Outpacing inflation rate

Still, borrowing by many districts has outpaced inflation. The state's growing obligation to fund a portion of school construction and renovation over the past decade prompted changes in law this year that will bring to the fore the trade-off between construction and other costs, such as hiring teachers.

Read the complete article here ...
Source: Newsday

1 comment:

ajlounyinjurylaw said...

3.7 billion is incredible!

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Long Island Property taxes most important issue, say LIers

No surprise here ! To stop this ridiculous rise in property taxes we have to educate our fellow LIers and contact your representative that they should demand Speaker Silver respond to the pleas of homeowners across the state and support a property tax cap in New York. It has already passed the senate but is being stalled in the Assembly by Assembly Speaker Sheldon Silver.

Also this year we are seeing some enormous rise in property taxes in school districts such as
William Floyd 12.47% and Seaford 8.99%. Some school districts such as Middle country is resorting to blackmailing its residents. The deal for districts residents is either approved a 6.68% increase or the district is going to force 21.61% increase in tax levy.

Published by THOMAS MAIER at Newsday

By a wide margin, property taxes are the most important issue facing Long Islanders, according to a Newsday / News 12 Long Island / Siena Research Institute Poll. Property taxes were cited overall by 45 percent of respondents, more than twice the 21 percent who cited "availability of good jobs" as the second most pressing issue for Long Islanders. "Property taxes are really an issue here because it keeps the young people from staying on Long Island and it will prevent the older people from staying, too," Tafuri explained.

Property taxes also are a large part of why the 57 percent of those polled said Long Islanders are headed in the "wrong direction" rather than the "right track" in the poll. A similar margin said New York State was headed in the wrong direction as well.

Property taxes are a particularly raw issue in Nassau County, where 53 percent cited them as the biggest issue, compared to 36 percent in Suffolk. Islandwide, Republicans and people 55 years or older complained about property taxes the most. "The Democrats love to spend money and they have to get it from the taxpayers," said one poll respondent, a retired Republican who lives on Nassau County's South Shore.

School costs - the biggest part of property tax bills - were also on the minds of Long Islanders who cited "the quality of public schools" among their top concerns. "The first thing I would do is eliminate tenure for teachers in public schools to cut costs," said another poll respondent, a 50-year-old Garden City man who is a Republican and who did not want to give his name. Although he was happy that his two children attending local schools got a good education there, he said his family's property tax bill has been overwhelming.

Property taxes hit a chord with all respondents, regardless of age, race, gender, religion, location or party affiliation. In addition to identifying the most important issue, the poll underlined the intensity of Long Islanders' general feelings about property taxes, with 86 percent calling the issue "very important" and 11 percent as "somewhat important." Crime, schools, good jobs and health care also received strong reactions, with traffic congestion and the local environment getting milder reactions.