Friday, February 22, 2013

What's wrong with the sequester?

With all the budget stories that have been out in the news media recently, I have tried to focus on the issue as simply as possible: income vs outgo.  The US government has, in simplest terms, been letting the outgo vastly exceed its income, borrowing what it needs to balance its budget. In essence that achieves the goal of postponing actual payment of its costs, and adding interest on top of it.

Just imagine the typical homeowner deciding that they can only pay a portion of their weekly grocery bill, and borrow to pay the balance.  The next week he would have a debt, so that the new weekly costs would include the new groceries, interest on what was borrowed, and hopefully at least a tad of a payment on the debt that had been incurred.  Should income that week have risen, that option might be survivable. Otherwise, the new homeowner will have to borrow more to pay the shortfall, increasing the debt, and thereby be in need of more money to cover larger debt costs, plus the next week's grocery bill. 

When would this process end? Only when one of three things occurred: the homeowner finds a way to earn more money, enough to pay off the debt and cover the grocery costs. An alternative is to cut the grocery costs back to a level that can be covered in light of limited income and the need to pay off the debt. A third alternative involves a combination of increased income along with a cut in grocery spending.

That's it. No other options, at least of the legal sort.

In essence, that's what federal sequestration would do: cut the government's costs while hopefully adding some extra income. It has to happen. If it doesn't, the US follows the homeowner into financial death.

Now imagine the homeowner making a conscious decision that at a certain date, if he cannot figure out what to cut or how to get money, he will be forced to cut 10% of everything and do something to get a raise or a new job or a second job. No questions. Has to.

That's where we are at. Our homeowner (Congress) could not come up with a plan to meet its needs, so now a sequester plan will kick in: cut spending, increase revenues.

Seeing how our Congress comes to its decisions (or, should I say, how it doesn't come to its decisions), at least sequester will be a step getting back on sounder financial ground.

As a last word, I will add that I, as a homeowner, spend a lot of time dealing with how I will spend the money I do have coming in. I don't spend much time at all dealing with how to spend money I haven't got. (Car loans and mortgages are exceptions, of course. Their payments are, however, a solid part of my "grocery bill.")

Thursday, February 21, 2013

Employer Contribution rates High????

There has been a bit of noise lately in the New York media about the upcoming contribution rates for the public employees' retirement plans. Since I was once a teacher, I will limit my comments initially to the New York State Teachers, Retirement Association (NYSTRS).
The upcoming Employer Contribution Rate (ECR)  is estimated at 16.25% of payroll.  That means that that percentage of salary of employees who are members of NYSTRS will be paid to the system.  There is a lot of groaning about that, perhaps rightfully so. There are stories as to how this cost will force districts to cut staff, cut program, etc.  That may be so, but...
Until 1988-89 school year, the ECR was constantly higher than that 16.25%, frequently much higher.  I will not comment on any complaining during those years: there was some, so be it.
I will comment, however, on the lack of complaining during the 1990s, as the ECR fell dramatically to an all-time low of .36%.  A slight bump in 1994, but the big trend was down.  School districts were steadily liable for retirement costs that were declining. Now, what did they do with that money they were saving? They spent it!!
During the 1990s some of the best teacher contracts were approved and enforced, best from the teachers' point of you. For that I say to the public, thank you. I benefited from those years. I can't say I was ever paid what I should have been. My union negotiated not a minimum salary for its members, but a maximum salary as well. (For that matter, find me a teacher who gets paid for overtime in a manner like many many other public employees)
Districts were not allowed to take part of the savings and bank it, saving it for the rainy day that we are in now.  Collecting and saving money would be considered, in simplest terms, a misuse of taxpayer funds. Not wanting to create the situation whereby they are given less money one year because they didn't need what they got the year before, districts made sure they spent what they had. They prided themselves on "no tax increase this year". They found ways to spend dollars that were available.  (A number of times we were told in our district, towards the end of a school year, that we could purchase items because "money was available". Those occasions were always at the end of the year, never the beginning, when we would then have an opportunity to use what we purchased.)
Enough grumbling. The fact is that salaries went up at little or no cost to school districts. The costs of those days are being paid now.
Take note that this is occurring in a state that has had several "retirement incentives" geared towards getting the more highly paid experienced worker off the payroll and onto the retirement dole, the idea being that employers could bail out of paying those higher salaries. That might seem fine, but this is the same state the turned around and bumped the minimum age for retirement with full benefits by 8 years (Tier 5 brought it from 55 to 57, and Tier 6 brought it to 62). What's the message now? Hey old timers we need you to stick around longer?
Part of the problems that have arisen in public education funding in New York is that school budgets are done one year at a time and basically preclude any long range planning. No business could succeed under those parameters.
That concept does lead to strange circumstances. For example, in my district teachers had to fill out requisitions for the following year as early as January. Of course, you would not know the courses you would teach until June, or even later at times.
Enough for now.
As a final word I will say that the education of our youth will never be excellent as long as we run it as a caveman's business. Click the graphic to access the entire NYSTRS briefing booklet (the source.)

Tuesday, February 19, 2013

The people??????

Amendment II

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Do you note a common phrase in these two Constitutional amendments? In fact, the words "the people" are used nine times in the Constitution of the United States.  Is the meaning of these words constant throughout the document? Does the meaning vary?

The phrase is used regarding selection of Congressmen (Article I, Section 2) and Senators (17th Amendment). Take note that even in these two instances, the meaning of the phrase has evolved.

The 17 the Amendment states "The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof, for six years; and each Senator shall have one vote. The electors in each State shall have the qualifications requisite for electors of the most numerous branch of the State legislatures."

Note that in that amendment, the definition of "the people" who do the electing is left to the states. That is the same phrasing as in Article I, Section 2. In fact, the 15th Amendment changed the meaning by, expanding the voting public, as did the 19th Amendment, which granted women the right to vote.  (On a sober note, the 19th Amendment lies between the 18th and 21st, which began and ended prohibition. )

The 26th Amendment set the minimum voting age at 18, which again changed the meaning of "the people". 

When it comes to voting, one would be hard pressed to prove via the Constitution that voting for President is even required. (Choosing electors is required, but the manner is unspecified).

Speaking of voting, those living in Washington D.C. do not have representatives in either house of Congress. Do they have to pay income taxes? Is that not taxation without representation, one of the items this country was created to avoid?  Are D.C. residents really included in "the people"?

Indeed, there are inconsistencies within our Constitution. It is not a complete description of the way we need to live, but at least it has a built-in process to correct itself.

Remember: those who originally approved  2nd Amendment did not allow women or people of color to vote, left it to the states to decide any age limits, and actually created a document in which slavery was okay.  Did the authors of the original Constitution make mistakes? You bet they did.

Now what about that Second Amendment?

Friday, February 8, 2013

Thank you Mr. Metallo

The article below is from the Albany Times Union of February 8, 2013. Rather than trying to improve on his work or using out-of-context snippets, I decided its best if everyone could just read it. Then reread it. And read it again. This short article includes the majority of the snags that have stymied public schools over the last 25 years.
Everything below here is from the paper.

Denying kids junk food isn’t the answer

  By John Metallo

     I feel a lot better after reading the newspaper this morning. The federal government has banned the sale of junk food in schools across this great nation.
   Finally, our schools will have something to do that is productive instead of worrying about things like teaching and learning, curriculum development, accurate budgeting, state testing, teacher evaluation, bus safety, sex education, character schools, bullying prevention, safety and security, psychological counseling, social work, health screening, etc., etc., etc.
   Monitoring the sale of junk food in schools?
   Give me a break, please.
   What a waste of time and energy, from the Capitol building in Washington to the corridors of every school in the nation. This is simply something that is not the headache of the schools.
   I worked in public schools for over four decades. And guess what? I really don’t care what your kids eat. I don’t care
  how much they weigh. I don’t care if they develop lousy eating habits that will negatively affect them in future life.
   How about the parents of these little cherubs of ours doing something instead of expecting the schools to raise their children for them? Schools would be a lot better off if we ask them to do what they are supposed to do — educate kids.
   Schools are not meant to raise kids, nor will they ever be able to do that.
   Let’s look at a few facts. Kids are not getting fat because of what they eat in school. They consume most of the food they consume at home or some place other than school.
   Based upon a 180-day school year and three meals per day, a student consumes 180 lunches in school during a calendar year. That would move up to 360 meals per year if the student eats breakfast in school each day.
   By the way, why are kids being fed breakfast in school? Shouldn’t that meal be consumed at home in the presence of a caring and loving family? Given lunches only, a student would consume
  180 meals in school and 730 other meals at home or elsewhere. That diminishes to 550 meals consumed outside the school for those who have breakfast and lunch in school.
   If schools serve healthy lunches, that does not necessarily mean that kids will eat them. Some kids bring their own junk food with them from home. Some buy it from the corner store on the way to school. Some trade for it with their friends. If there is junk out there, kids will find it.
   It is what kids do. Much more junk food is brought into a school each day than is sold in any vending machine in a school.
   By the way, vending machines are in schools to help support things like sports and school activities, which are cut when budgets are slashed. If we properly fund those programs, we don’t even need the vending machines. But that is another article.
   We cannot expect our schools to solve all of the ills of society. How about we start taking responsibility for ourselves
  and our families?
   Education begins at home. Teaching kids how to eat properly should begin long before the school years begin. Kids who eat healthy at home tend to eat healthy elsewhere.
   Face it. Junk food is not going away. As a matter of fact, I like my chips on occasion. Trying to eliminate it from school or anywhere else for that matter is an abject waste of time and money.
   Let’s concentrate on teaching youngsters to make good decisions when it comes to food. That teaching begins at home.
   Are you with me, Mom and Dad?

   John Metallo lives in Slingerlands. He is the retired principal of Albany High School and a former adjunct instructor at the University at Albany and SUNY Plattsburgh.