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Reform school finances <br> As aid is cut, state must free districts from mandates

It's a compelling argument: Give them enough money, or give them relief from costly mandates.

As state aid to local schools declines, a group representing districts across upstate New York is acknowledging economic reality and asking state legislators to do the same by giving them a break from the increasingly expensive obligations that threaten to upend their budgets.

Some of the group's proposals, such as freezing wages for school employees under certain conditions, are sure to roil the powerful teachers' unions and prompt legal challenges.

But we believe the state's desperate fiscal times call for exploring every possible response and we support the group's efforts to radically reshape how we pay for our schools.

The would-be change agents are the 257 districts that belong to the Statewide School Finance Consortium, a project of the Central New York School Boards Association.

Those members, including most of the districts in Western New York, banded together to seek reforms to the state's all-but-broken system for funding K-12 education.

Personnel costs make up the lion's share of a district's expenses, and those costs -- salaries, health benefits and pension contributions -- keep going up even in districts where union members are working without contracts.

This is because the state's constitution requires that expensive contractual provisions remain in place even if there isn't a new contract.

The state is in no position, in the current economic climate, to increase how much aid it gives local school districts.

This year's state budget slashed aid to schools by $1.4 billion, and districts coped with this cut by raising taxes, cutting positions and drawing $229 million out of reserve funds, according to the consortium.

The picture isn't getting any brighter for these districts.

Buffalo, for example, has an annual "structural deficit" of $30 million that officials blame on guaranteed yearly compensation steps, health insurance premiums, pension contributions and other operating costs, according to a statement from the district's chief financial officer.

What can be done? The consortium's four-point plan calls for:

*Freezing wages for all public school employees when state aid is frozen or reduced.

*Capping the amount a district can spend on health insurance, and requiring employees to pay a larger share of health care costs.

*Significant pension reform, including making employees contribute more toward their pensions.

*Reducing the costs of special education by bringing New York's regulations in line with federal guidelines.

The measures would require action by state legislators, and most would spur immediate lawsuits because they would alter collectively bargained contracts, conceded Rick Timbs, the group's executive director.

And the pension plan, for example, would apply only to employees who haven't been hired yet, Timbs said.

But these are dire financial times. New York is facing a budget deficit of more than $9 billion and Gov.-elect Andrew M. Cuomo has pledged not to raise taxes and we hope he will avoid borrowing. That leaves budget cuts, and with more than half of the state's annual budget going to health and education, those areas are where spending reductions will have to occur.

Districts need to be forearmed. The State Legislature must heed the consortium's proposal and pursue these important reforms.

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