27/ Forty 08/28/88

With the 1988-89 school year approaching there have been some vocal concerns by City Hall over how the city school district is spending their budget. As the move toward school reform continues, how will City Hall and the school board resolve their differences? That question begins the discussion on tonight's 27:forty. Good evening. Well, the dust has settled to a certain extent but the mayor and City Hall expressed some serious concerns this year before passing the school budget. Joining us tonight on 27:forty Mayor Tom Ryan, superintendent of Rochester City Schools Councilwoman Ruth Scott. Scott chairs the finance and law committee. And Benjamin Douglas president of the school board. Mayor Ryan, let's begin with you. The uh Fiscal Independence Agreement assures that while City Council uh allots the money to the school board. They can spend it any way they wish. Um Is there a fine line though between saying that they can spend it any way they wish and then saying that they're spending too much money?

It isn't just a question of living within the Fiscal Independence Agreement that uh, I think you have to assume that decisions that are made now, this year, in this budget year, are gonna have an impact two three four years from now. And uh I think one of the things that uh probably disturbs some of the council members and members of the administration. I can't think of any city council in the last 25 years or any city administration that is supportive of education as we have and uh if you look back uh I think when I was sworn in two and a half years ago, I made a comment then that there was nothing more important to a long-term success of the city than an effective, efficient city school district and that that was one of our major concerns. I think within about three or four months of that swearing in, we initiated discussions for a new Fiscal Independence Agreement which reflected the changes in Moore and Ryan as far as a sales tax is concerned and uh that uh that agreement uh will give the school district over a hundred million dollars over the next 10 years. So that uh I

think in terms of support for education ummm y'know and I think councilman's Scott probably will last 20 years or probably one of the I think of the council members one of the more supportive of the city school district. But we can have fiscal independence agreement that make annual allocations between the city and city school district. That does not relieve city councillors, city administration of the overall responsibility for the long-term financial well-being of the city. And we've spent the last 15 years digging ourselves out of a hole because of the Hurd-Walden-Anders Anders long decision. Matter of fact we aren't out of it yet, we still have about 35 million dollars that we have to worry about paying back. But I think that's the type of decision we have to be concerned about so that uh what we have said is that we first of all are concerned about the taxpayer. The last four years we've seen a large increase in sales tax because of Moore 9 that will be capped very shortly. We've seen big increases in state aid, and I think that uh, if you go down to uh, to Albany

the chairman of the Education Committee will tell you that uh, over the last 10 years the only mayor of the big six cities that lobbies with the school district, for increasing aid to education is- is Tom Ryan. So that uh, you know we've had big increases and our concern is what is going to here. But the one revenue source that the school district or the city controls is the real property tax levy. So if there's any dramatic reductions in sales tax or in the state aid formula. And I can't find anybody who thinks that state aid is going to go up 14 and a half or 15 percent indefinitely like it has only last five or six years what is a school district going to do. In other words to make up the difference it would decrease the state and I think last year they know they had nine million dollar cut in programs even though the total budget went to 22 million dollars. So that what we proposed was a study by the center to look at the long term impact and I think that I think despite this record of support I think that we've had it when we raise questions I mean we're immediately label anti-education I think that's the

part that bothers us the most and it's inconsistent with the record we've had really well there's Were you surprised at some of the concerns raised over the size of your budget this year. No. Was I surprised that the concerns over the issues raised? No. No there's nothing I could disagree with Tom just - I think the orientation is exactly right. The if you go for a 15 year perspective financing city services city and school district has been a well documented battle. If you take a look at what the city leadership has done as part of trying to support education financially over the last three or four years the redefinition of the fiscal independence agreement the success of Moore and Ryan and then the monies (Unintelligible) and city. I don't think that's even the issue I think the issue is just as Tom said that we're living within a Fiscal Independence Agreement and there's an agenda that suggests that we're not

servicing all kids. And there's so many ways to cut this I'm sitting here thinking all right. Right this minute after all is said and done last year our unit cost for a student is six thousand seven hundred. Now you can say my God that's two or three thousand above the national norm which includes southern states and Alaska. But if you just take that frame of reference within the county or in Western New York or New York when all is said and done we are not spending an extravagant amount of money on our children and yet we're getting tremendous support for it. I'm not sure I would suggest that anybody's anti-education I'm not sure where that reference came from. I don't I don't think that's the perspective. I think the implication of how we're going to manage this over the long haul is a very real question and the issues of how we communicate and kind of call for cooperation. So that's a very Those are very real issues. Ruth Scott when we're talking about actually going through this entire process

and reviewing all the numbers and figures when it comes right down to it though isn't the school board is you elected by the voters and they've given them the authority to spend that much money. You know I think the issue though is not who has the authority to spend the money. It's who raises the money. And how do we come to a reasonable agreement about how to spend the money over time not program manically not problematically. But how do we figure out how to have the best kind of situation both for City School District children and for their parents and the other people who exist in the city? I think it would be a travesty if we spent 90 percent of the budget on the school district which we could certainly do I mean I'm sure there are needs that that exist that could be conceivably met by spending additional dollars. But the problem is if we did that because we have a finite pie if we did that what would happen then is that the city would go to pot around the schools and we would really be leading everybody down a

garden path. When we say we really are concerned about city children but they don't have a community to live in that's worth living in. Or they don't have a community to live in where they can go out and get jobs after they finish their education. So it's a totality that we have to live within that we have to look at and I think all we're really asking at this point. At least as the dialogue has gone along I think our redefinition of it is what we're really saying is let's take a look at this together in terms of the long term implication of how you go about spending the dollars not what you spend it on specifically but how do we do it in a more effective way for all of our citizens? Benjamin Douglass when we come down to debating how it's going to be spent and not getting into between city hall and school board debate over problematic changes or telling the school board how to spend. Are you looking at the long term though are you looking at the taxpayer in the city? and can they afford this over five and 10 years? Are you coming in every year and asking for the most money that you can get and spending it

all. Absolutely not. That was the purpose for the fiscal independence agreements. So that the city and the school district will not be in these kinds of conflicts. I like to say I agree with the points made about communications. I see the issue as one of communications between two governmental bodies that will determine what the stream of dollars are going to be available for what kinds of expenditures over the long haul. The school district has been actively involved from a state level in trying to judge what those revenues are and every year we go through a process of lobbying touching base with those points of information in Albany to find out what kinds of streams of dollars we can expect. We understand that we've been quite successful in the past and in the recent school year and obtaining fairly large amounts of monies from the state. We are not banking on those kinds of dollars in the future and how we spend those monies on programs. From the city point of view we've sought to do the same thing with a fiscal independent agreement. We

know as a school district that we have a mandate to reform schools. We know that the taxpayers in this city's ability to pay is not unlimited. So therefore we did sit down with the school dis- with the city council with the mayor and we mapped out a program of expenditures what dollars will be available to the school district to spend on school programs and so forth. And we've come up with the fiscal independence agreement and we've lived through that according to the letter of the law and the spirit of that agreement. And I think what you're hearing now is that things may change in the future. In terms of the taxpayers ability to pay there's concerns whether or not we can support that program based on what the potential objections might be. And I say that's a very legitimate question. And it calls for the two bodies to come together and talk about that. I think there is a further question too and I and I think that it's probably the basis for part of the philosophical discussion that's gone on over the last couple of years.

The division of monies is not at question. I think there are some people who believe and I won't say at this point what I believe we'll just say there are some people who believe that if when you have a tight fiscal budget you really need to leave some room in that budget for unexpected events like for instance a shortfall in state aid or shortfall in the sales tax or whatever may happen. Therefore you should not budget all of the money that is allotted to you so that if indeed you had a shortfall you had something to fall back on rather than having to come across the street and suggest to us that we need to cut back in order to make up that shortfall. I think that's part of the discussion that's going on although I think you're right in your characterization of when. One of the reasons one of the reasons for the fiscal independence again was it was to give the school district the flexibility in terms of making Somaly your plans and I think one of the points we tried to make is that is that you don't have any

flexibility. Now in other words you're taxing it at the limit. And so if there's any changes in the two revenues that you don't control state or the sales tax revenues you don't have any place to go in terms of protecting a program so that I think you know you're going to be back in the thing where you have a program start one year and they are going to be cut the following year. I don't think that does anybody in a school district or the school administration and you get and I think that's the point. And secondly the state increases that within 14 15 percent each year that the governor signed the bill he has done on the basis that it's to give relief to the local real estate taxpayers and that's been the specific reason for it. And that hasn't happened here. So I and I think that's why we are concerned about leaving some taxing margin. And frankly there isn't anything we you know that we're asking a school district that we don't do ourselves. I mean we're we have about 15 or 16 million dollars in taxing authority that we don't use because.

We don't know what's going to happen in the future in terms of problems in a lot of things we're concerned about is it the 35 million dollars for the tax refund in two years. We'll be having another census which will have an impact on some of the revenues I'm sure will have the adjustment as buyers of homes did not homes to categories as far as recession rolls. These are major problems and I think that we have to take some of the pressure off the real estate let me let me let me respond to that second please. I would say that there is a there are points to that that I would agree with the mayor and that is the school district is seeking and has sought to create within its budget some reserves to do that now we are limited on how Minutes much reserves we can still put aside but I don't think there is any disagreement on that point. And we seek to do that as far as a relief to the taxpayers. The school district particular school board our elected officials live in the city and is every bit as much concern as any other body of government about the burden

on the taxpayer. Every year when money is appropriated from the state. The governor may have one thought but the legislature was really appropriate the moneys and is the final decider of what dollars come to the district. A probate on a base of support education. There is something ailing with and I mean that necessarily agree with this as a taxpayer but there is some thought within the legislature that monies that they appropriate for education should not go to any other source but education. And some legislatures will balk on appropriating the large amount of money that we're able to get if it goes for anything other than that. Now that's not to say that a school district is not very sympathetic and agreement with the mayor that their taxpayer must be considered. OK Peter I mean it's been characterized as budgeting on the edge and the suggestion is that you're not looking to the future I mean we're on it. Are we on a fast rate for spending under the end of this whirlwind of reforming can we cut back and can you cut back in future years if necessary once programs are institutionalized they're hard to take away unless they're ineffective and I'd like to think that they

can be. There's so many images I'm sitting here with I think we started off OK everybody. Governmental communication has got to be future focused. Nobody wants to dabble in which programs we ought to provide. But there's some sense that there is a future that needs to be manage. Very good and in that future we have to decide priorities big ones downtown development schools neighborhoods fire police absolutely legitimate discussion. Then you start getting one layer below that and there is concern about whether or not our programs are either the right programs or are we do we have contingencies to manage unknowns knowns. No way man I don't think I don't didn't hear anybody say whether they're the right upgrade or whatever we've been guilty of. We never questioned program decisions. No no you are right about the fact that we said how you got me when I was there just to get in there a time line between talking about how much money they're spending and talking about but we're not talking about your programs in general I mean when you

cut right down to it he's saying that that the funding is supporting programs he deems necessary in the school board deems necessary. I'm putting this in context. Isn't there a fine line in between there. There's a there was a question about the nine million dollar shift even though a record increase whatever. I mean the we cut nine million dollars out of the budget last year. Some of it was driven by the necessity of some federal programs that were over budget. That's an error. We've said that was an error. The systems work to correct that has been done. The Center for Governmental research has verified that's under control. We also cut something like two million dollars worth of efficiencies that we promised we would cut when we said when we did secondary reorganization we didn't we didn't get forced into a 9 million dollar program reduction simply because of the reform movement. And I would suggest that when you go through the audit exercise that we go through jointly the auditors don't tell us that what we're doing is bad business.

So there is a sense on my part that this goes beyond a strategic discussion but quite legitimately more money has been coming in Tom Ryan is the only mayor I know of that goes up to the to the state with us. And I know what the governor says. And Ben is right. The monies that have been coming to this city instated for the last five years have been not coming in the general fund area they've been coming in the categorical area. We get 10 million dollars with the magnet school money this year. I'm not going to go to the people that did that. As a matter of fact the first visitation schedule for the first of October and I've got the list. They want to meet the teachers who were funded with magnet school funds they want to be introduced to the program and they want to visit each site they want to visit the early childhood centers that we said we'd open with magnet school funds. There is a dilemma on that revenue side between lowering or protecting the tax rate and meeting the legislative obligation that you set up when you go lobbying. I'm only making the point that there is that it is complex and it needs a strategic

cooperation. But I do think that in the strategic view this issue. And I think it even got emphasized in this housing the housing study that just came out. You have this image the fewer people moving in have children. Does that mean that the schools are less needed. You didn't say that in the study didn't say that you have an industrial commercial side that is saying my God the workforce isn't going to be there we need the schools to be you have the city paper that just came out with another story about the fact that no matter what anybody says when people move they ask about safety and neighborhoods or schools. The issue of the role that schools are going to play in this community is going to be an ongoing discussion and as I've always told Tom I don't right now enjoy the assessment that the city does. I'm a city resident. I'm quite pleased with city services. I am very proud of city government and the way that the assessment for me as a taxpayer is good. I'm sitting here with all of us with an assessment that says our secondary system particularly is not

servicing kids it's unacceptable. Do something about it. That struggle that dilemma of the place of education the value of it and the cost of fixing it is all part of something that needs to be a shared discussion as we move into the future. I think that's very true I think that the there are some things that are finite and some things that are not. I think we really all agree that the ah, that education plays a very important role and that it has to play a very important role. I'm not sure where it is we start to disagree. I guess that it is probably at the level of how can you make or can you make more efficient use of the resources. We don't know the answer to that question yet I think that's going to be an on going to sketching for the next two years. I think it's important that we carry it on in a way that respects the questions that are raised by each side regardless of who thinks their line is being invaded. Because if we don't we will get to 1990 and not have an agreement that makes any sense to anybody so I think it's

important that we keep in front of us the fact that we have agreed that schools are very important that educating children is very important. But we also have to figure out how do we best do that with diminishing resources because that is the case in this community. When you use the word - It's going to get worse. - When you use the word efficiency you mean how can we do things more efficiently? How can we all do them more efficiently. I don't use the dollars more effectively. I think that unfortunately has probably been an impression created that at least on the city's side it was a land of plenty. I mean. You know we've got a thousand fewer employees and we had 12 years ago. I mean our budgets have gone up less than the Consumer Price Index over the last five or six years. So there is there is a lot of pressure of the budget. But at the same time we have in terms of per capita income the city resident of all of your support all these has the lowest per capita income this metropolitan area and yet the highest real estate expert. Those things have to have an impact on decisions that are made about where people are going to live where industries are going to locate and

that's that. The only question we rate I think when we say that we ought to think in terms of so that that fiscal independence agreement is not an appropriation on an annual basis. It's an allocation of taxing authority. And I you know not you can just plug in the full 60 to 65 cents on every dollar now it's let me for the real estate tax in the city is for the school district. And I think that's you know that's the one revenue source that we have some control over and I think that's the you know the audit is tell you how you spent the money last year and the year before they don't they don't talk about what's going to happen in the future years. And so you may not you know I mean dollars in cuts what the total budget went up 22 or 23 million dollars. Can I respond to that. That's that's that's the point of history. History remember. And I didn't want a specific response to the concern that you're taxing at the limits and have no surplus to fall back on. But I can I just come back to that when I just I think touched upon I think a very crucial point where some of the dilemma in the struggle

is and I think this struggle is legitimate on both sides. On the one hand the city has to struggle with the fact that the tax base is diminishing that the burden on each taxpayer is now going up and the fact that the attractiveness to this city in terms of business interests is based upon the tax structure and so forth. On the other side of the coin you have that the very same business being attracted to the city based on his educational quality. You have citizens who can afford to pay taxes who have the income. Being attractive or not attractive the city based on is educational quality. Somehow we're in a chicken and egg situation in which both sides are depended upon being able to look at interest on both sides and saying we've got to protect these interests with the benefit of the whole. And somehow we have to come together and talk about the limited amount of resources that do both kinds of jobs and I think that's where the struggle comes back and forth because they have educational add because you don't want balance I think that's the

message that we says that then. Then let's go to the CGI report also said that the budget submitted to the city. This one that we're now in does have the kind of capacity to meet normal normal contingencies. I mean it's a this budget meets all the criteria that anybody would want to be in a budget. We get accolades from the city staff in terms of this is what we've been waiting for. So I don't know what the question is in that sense. Is are is education going up an expense. Yes. Are the results if you take a look at even the last three to five years within this issue of priorities where we've put the money into early childhood centers and early intervention programs. We're coming out with results in the next couple weeks based on last year's indicators that suggest the elementary school where we have focus we've got measurable objectives are doing fine they are moving. Now that's nice to hear. The secondary schools which were the biggest the harder thing to

affect we reorganized. I'm expecting to see the outcomes in terms of attendance suspension changes there this year. I think performance is going to take a little time at that level. But this discussion I never feel like we get it down to OK whatever decisions you did make on this quote fast track for change those investments we're making our We're getting some results to the extent we're getting the results is that better. I mean is is it OK to spend it. I don't have easy answers for some of this stuff. But the image that we're on the edge of - Let me raise something - Peter the point is not (uninteliglible) That's why we talked about getting the center. I mean rather than have the two budgets they have it with the school district the city every an ongoing debate for six months. If we had this interim government research which is I think the familiar with the city finances the school district areas to be fairly well respected organization the community. But what we were talking about. It was the impact on future fiscal years. I mean we know the 80 than 89 but it was going to bell the bell but we're worried about decisions are made this year obviously have an impact on budgets two

three four years from now and what we were talking about John of the affordability question was directly what's out there two or three years from now . And that's that's the only question we raised. Ok, Well the study too, I think we need to point out too that one of the things that the study suggested was that when the district adopted the current salary and I I'm not talking about the level the salary from any personal kind of biocide but when they adopted it that you did not know what the impact was what the impact was going to be what the cost was going to be. All we're saying on our side of the street is whatever you do make sure that you know what the cost is before you do it because if you don't we're going to find ourselves at the end of this budget year saying oh my goodness we didn't know what the cost was we had this story happen if we had they had us out sooner is there anything that they didn't say anything. Wait a minute, I can't...Wait a second, the analysis done by the analysis done by going to see on our estimates when we sign that contract came within plus or minus a half a percent on every one of the cost estimates and the Senate idea was you know

if the basis of all of this Aleck of communication I mean we're out there and we should say no. I disagree with that assessment we think we know very well what the cost was and what's expected and what we're saying that in the CD-R report that even though their estimates may not agree with us. There were only awful small percentage here and there so that if you look if you stood back and look at the aggregate total you would say by and large these assessments agree between the seats on a school district there was a fair and correct to suggest a school of his own to do this. Thank you all for being with us today. See you next week on 27/Forty