How Do You Cut Unfunded Mandates?

Monday, January 24, 2011

Welcome to Politics Bites, where every afternoon at It's a Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on The Brian Lehrer Show, Carol Kellerman, president of the Citizens Budget Commission and a member of Governor Andrew Cuomo's "Mandate Relief Redesign Team," and Peter Baynes, executive director of the New York Conference of Mayors (NYCOM), explained how these rules crunch local budgets.

Earlier this month, Governor Andrew Cuomo promised to cut unfunded mandates in New York state. These mandates manifest as rules and regulations imposed on school districts and local governments, but those bodies eat the cost of adhering to them, not the state government.

These mandates govern benefits for public employees, decision-making processes in schools, and make for a lot of red tape in general. Peter Baynes said that if we don't start cutting immediately, these costs are going to sink municipal budgets, especially as Governor Cuomo pursues a centerpiece of his agenda: capping property tax increases.

As of right now, for cities upstate, two thirds of the property taxes they collect go to two expenses: pension costs and health insurance for public employees. At the rate they're growing...that in conjunction with a two percent property tax cap would mean that in 2014, every single penny of property taxes collected in those cities would just go to pay pension costs and health insurance...If the cap is going to be a vehicle to attempt to have property tax relief, it has to be done in conjunction with or preceded by mandate relief items that we're talking about. The numbers don't add up otherwise, and there will be devastation in communities in terms of the services provided, the employment within municipalities is already way down, it would be decimated even further.

According to Carol Kellerman, the property tax cap makes it necessary to address unfunded mandates, which she likens to a really bad date. But the measure could also push local governments to bargain harder with unions in the face of reduced revenues. 

It's like taking someone out for dinner on someone else's credit card. The legislature imposes a variety of sweeteners in the terms of the pensions and then the localities are expected to cover the costs. That's a very large unfunded mandate. Health insurance is not, it's collectively bargained and I think part of the governor's intent in the property tax cap is to put more pressure on localities to bargain more effectively and get more of a contribution from employees for health insurance.

Among Baynes' recommendations for mandate reform are easing regulations on local governments as employers so that they can negotiate more affordably with unions. Public schools are another huge arena for mandates, which Kellerman said can be as specific and nuanced as defining who sits on a committee that oversees a single student's education.

The state specifies everyone who must be on the team that determines an individualized education plan for a student receiving special services. It says an outside parent must be on this team, a psychologist must be on this team. It should be easier for local school districts to make the determination of what staff they need on these teams.

A caller named Mark said that such mandates were so burdensome—and the state funding received by some districts so negligible—that his school board had proposed foregoing state assistance entirely to avoid dealing with regulations.

I was on a school board in a so-called "high performing" district, and as is true for many of these districts, we receive a very small percentage of our budget from state funds. Ninety-five percent is raised locally, yet mandates from the state are onerous and increasing every year. Our proposal was to eliminate all state funding in its entirety in exchange for mandate relief.

Baynes said that while it may work in wealthier counties, leaving state funds on the table wasn't a viable option for school districts in more depressed regions. Local governments and municipal organizations will be stuck with cumbersome mandates unless the system is gutted and streamlined. Carol Kellerman said that mandate relief could have a point of contact with the governor's call to reorganize public institutions across the state, possibly signaling a sea change in the way government conducts its business in New York.

There's no mandate that there be 700 school districts, for example, and I think the governor would be in favor of consolidation of local governments wherever possible...We have this national tradition of locally directed schools, and people are very reluctant to give that up. But we may be coming to a point where financially it just doesn't make sense to have all these administrative units.


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Comments [12]

Phil Henshaw from way uptown

Investment = Spending ???

Brian, The throwing of government money at friends, in the name of investment, is a very embarrassing tradition of many,

It’s been most heavily promoted by Conservatives, though, for the last 30 years with their outlandish scale of “investment” in military might we might have used for energy independence, for example, instead for wars of opportunity. There's also their “investment” in deregulation and “trickle down” finance that only really stimulated sending jobs overseas and wild speculation schemes.

The questions is “do you understand the effect”, and unfortunately that’s not a “talking point sort of issue”, so does not get discussed.

Jan. 26 2011 10:48 AM
Terrence J Skinner from Brooklyn, NY

Everyone keeps complaining about pension costs and public employees. Pension costs exploded over the past ten years because of a labor deal pushed by Rudy Giuliani. In the late 1990's, Giuliani owed 980 million dollars to the pension fund. He went to the Municipal Labor Coalition (MLC) and made a deal to do the following:

1 The City wouldn't have to pay the 980 million it owed into the pension fund

2 Union members with over 10 years of service would no longer have to contribute into their pensions

This may have helped Giuliani short term, but it devastated the the pension system's funding. City workers now pay into the pension for their first 10 years, these are the years during which their salary is the lowest and therefore their contributions are minimal. During the next 20 - 25 years, they don't pay in at all. Then, they collect their pensions based on their final average salary over their last 3 years of service.

Think of the amount of money that has come out of the pension system because of this foolish short term strategy; first the 980 million dollars didn't go into the system, then several hundred thousand employees haven't paid into the system over the past 10 years. It's not hard to understand that this has had a negative impact on the pension system funding.

Instead of changing retirement ages and calling for drastic union givebacks, the funding system should be returned to its prior practice;
1 all employees pay into the pension for their entire time of service
2 the City should have to pay a portion of the 980 million dollars they owed the system since they are looking to change the deal they previously made

The problem was created by Giuliani, not the unions!

Jan. 24 2011 11:44 AM
Ben from Park Slope

Why not stop a HUGE unfunded mandate with a simple law requiring that those who report a crime in process must see or believe that a crime has actually been committed?

A huge burden on municipal budgets is alarm companies. Alarm companies make $40/month or so from tens of thousands of subscribers. They install a bunch of sensors and then report the alarms to the police, 99% of which are false alarms.

The police then send squad cars to "investigate" these false alarms and that cost is paid by the public. So the private alarm companies like ADT make a fortune and just offer a telephone operator. The cops can't chase real crimes because they are busy chasing ADT's beeps on a screen.

This is an unfunded mandate that could be easily ended if cops were simply told to ignore those who didn't actually see or witness a crime in progress, or stop taking calls from those who report ten or more false alarms.

Let ADT buy their own squad cars!

Jan. 24 2011 11:33 AM
jacob from Brooklyn

Remember the Taylor law! These unions gave up the right to strike in exchange for binding arbitration.

How else would your guest propose to settle such contract disputes?

Jan. 24 2011 11:23 AM
mc from Brooklyn

If you force arbitration reform be repealing the Tri-boro amendment then repeal the Taylor law.

Jan. 24 2011 11:22 AM
Barbara Fisher from Staten Island

The special education requirement to seat a parent on the committee is not a budget item. The mandated parent is not an outside person but the parent of a child with a disability in the school district. The advocate is necessary to speak for the child and the parent. I spent eleven years as a parent advocate in CSE 2 when I lived in Greenwich Village. We are not paid. It is a conflict of interest to be paid. Reasonable travel costs are allowable. I never asked for reimbursement, I walked to the meetings.

Jan. 24 2011 11:20 AM

There are obvious problems in the spending of tax money, starting with local government salaries. Some county executives earn close to $200k per year! And looking at my tax bill I see ridiculous charge for garbage pick up that only eists because its a government sanctioned monopoly. The problems are not hidden but local government will not cut it themselves. The state has to jump in to make this public info so that the tax payers can affect change.

Jan. 24 2011 11:19 AM
a listener

If this guy is outdoors on his cell phone, please have him step indoors. The wind noise is unlistenable.

Jan. 24 2011 11:19 AM
charles wilson from Pound Ridge

Tax Cap will not work unless the Triborough Amendment is repealed. Unique to NY, Unions and Public workers do not have to negotiate when contracts end. The terms of the old contract remain in effect until there is a new contract.

Jan. 24 2011 11:19 AM
M. Clark from NJ

My mother was an ESL teacher and the wealthy school district she was in was constantly playing financial games with special education that were illegal. I think if a wealthy school district is going to play such illegal games, it is probably better to be mandated by the state to avoid such illegal games.

Jan. 24 2011 11:16 AM

A property tax cap, is a nice idea, but only a guaranteed tax increase rate. Please consider the Cahill Bill, (Assembly Bill A447 of 2011) on changing property taxes and school funding.

Jan. 24 2011 11:14 AM

urely bloomberg must have recognized this crisis before last week -- and would have known before running for that 3rd term that he would be measured by his stance toward this crisis?

Jan. 24 2011 11:12 AM

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