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.
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