Want to save school districts hundreds of millions of dollars? Here in NY, at least, there is a bold, incredibly simple solution that the state can take: pay them on time.
Most of the money that a public school gets comes from two sources: tax revenues and state aid, neither of which is paid to a district on time. The result being that in order to meet operating expenses, a district has to borrow money from a third party (read: bank) while it waits to get the money the state is legally entitled to pay it. Of course, borrowing money means paying interest on the loan.
In the district where I work, we budget ~$225,000 (the equivalent of 4.5 new teachers in salary), just for the interest on the loan that the district has to take out while waiting for the state to get around to giving it the tax-revenue that it owes them. Multiply this figure by the number of districts in the state, and you start to come up with some pretty serious scratch (scratch that is, of course, budgeted and paid for by the local tax payer).
We should pause to note the irony of a state government, who shows zero tolerance for late tax payments on the part of its citizenry, demonstrating a chronic propensity for late payouts to the institutions that educate its children.
So the next time you hear anyone from the great dysfunctional government of New York prattling on about waste in school district spending, tax caps, and all the rest, remind yourself that said individual(s) represent an organization that is easily the most wasteful in the state, one that can’t even get its act together to pay districts on time, costing the greater public of New York hundreds of millions of dollars in interest payments.
If it wasn’t true, you’d have to laugh about it.