FWCS Transportation Costs Are Out of Control

The total transportation budget is ~$19.5 Million. With roughly 30,000 students that comes out to $650/student! That’s not only students riding the bus - that is ALL students. And 70% of that cost, or $13.7 Million is in salary and benefits for transportation employees.

Good grief.

That is absolutely out of control. Cutting that budget by merely 25% would save $5 million per year. That’s $5 million that could be transfered into the general fund (assuming the state legislature approves such transfers come next week) to eliminate teacher layoffs and reduce classroom sizes.

This district simply can’t afford to pick up every kid that lives just a few blocks away from school. Indiana guarantees every child the right to a free education but that should not include a chauffeur service to and from school paid for at taxpayer expense. The vast majority of the district’s transportation budget should be born by the riders. If you want your kid to take the bus then you have to pony up something to help pay for it.

We need to drastically reduce the bus program at FWCS, privatize it if necessary, and put the savings into areas that will improve academic achievement.

Salary Compression at FWCS?

I loved this quote from Fort Wayne Community Schools’ Superintendent Wendy Robinson:

Robinson said it’s possible the community didn’t understand the idea of salary compression, a concept she believed was laid out clearly when the board discussed her contract but something that didn’t translate to the other administrators.

District officials have said they’ve been seeing some salary compression between the high school principals and the top administrators, who have more responsibilities, and to keep the higher positions competitive and alluring, it’s necessary to have them pay more.

The top administrators of this district have been failures by any reasonable measure. Yet because a couple of principals are overpaid we have to pay these failures even more? And if we don’t then we’re to believe that these top administrative positions wouldn’t be competitive and alluring? I can’t believe they have the gall to even suggest this when faced with a $15 million budget cut.

Just like looting bankers on Wall Street, the FWCS administration runs the district into the ground all the while demanding more and more of the taxpayers’ money. Here’s a challenge for the board to determine whether or not we need to raise wages to keep the positions “competitive and alluring”:

Go ahead and cut the salaries by 20% and post them as open positions. If 10 or more qualified people apply for any given job then fire the current administrator and hire a new applicant at the reduced rate. If less than 10 qualified applicants apply then go ahead and give them their raise.

Is there ANY doubt what would happen if they did this?

The next few years

The last few years have been grim. Wages in the US have stagnated, the stock market has dropped, unemployment has increased (likely permanently in my opinion), and the amount of debt accumulated by our Government has skyrocketed.

I also think the next few years will be grim. I have to admit that the more I have studied the current economic conditions the more grim my outlook for the future has become.

I think that the following is likely to happen over the next few years:

1. The United States Government will continue to accumulate a staggering amount of debt. This debt will eventually cause the dollar to drop to levels not seen in many decades.

2. Many states and local Government entities (likely most) will continue to accumulate staggering amounts of debt. This will cause these Government entities to have to raise taxes and/or drastically cut spending.

3. The residential real estate market has been pummelled. I hope that the worst is over; however, there are millions of homes that will go into foreclosure in the next couple of years and this will ensure that the real estate market cannot recover for years.

4. The Commercial real estate market has also been pummelled. Unlike residential loans Commercial loans come up for renewal every five years. Every five years the banks re-evaluate the loans and can either call the loans or continue them. The interest rates on these loans generally “float” every five years. Quite a few of these loans are going to be called and this is going to ensure that the commercial real estate market cannot recover in the next few years. The vacancy rates and rents from commercial properties has plummeted and this will cause many commercial property owners to default on their loans.

5. I believe that the unemployment rate will be between 8% and 12% over the next couple of years. I think it is likely to hover between 9% and 11%. Many of the lost jobs are in the banking, real estate, and construction fields. I do not beleive these fields will return to pre recession employment levels.

6. Public sector pension funds are woefully underfunded. Public sector pension funds are likely underfunded by well over two trillion dollars. This is going to cause a lot of painful decisions to be made in the next few years.

I believe that there are several things that prudent citizens can do to “weather the storm:”

Create a family budget. Ensure the the budget is written and that you accurately track your expenses and income.
Build up a cash reserve that is 3-6 months worth of family expenses.
Pay off your debt aggressively and do not incur additional debt. I truly feel that interest rates must rise and that wise consumers will pay off their debt.
Maintain and if possible increase your job skills and your marketability. This is critical and most Americans completely ignore this.
Start saving for retirement. Make this part of your budget.
Work as much as you can and make as much money as you can. People often focus entirely on what expenses they can cut; however, the income side of the equation is equally important.
Cut expenses. There are few Americans who cannot cut expenses. It is incredible how many Americans think that multiple cell phones, big screen TV’s, cable TV subscriptions, and eating out are “necessities.” It is amazing and pathetic.

Believe me I hope that I am wrong and the we enter a long period of stable economic growth; however, I truly do not think that this will happen.

Mike

Joe Stack and the Rise of American Terrorism

For those that don’t know, Joe Stack was the man who flew his plane into an IRS building in Austin, Texas yesterday killing two people. Stack ran an IT company and posted a manifesto/suicide note on his website that you can read here.

I don’t link to this because I condone the behavior or think Stack’s version of justice is appropriate in any way. However, I do think it gives some insight into the nature of terrorism and why we should expect more violence here in the United States.

I think many people believe that the terrorists of the Middle East are radicals instigated by some dangerous religious indoctrination, but I think that’s a distortion of cause and effect. Economics and the unfairness of what ever system they perceive is controlling their economic plight is the real driver of their radicalism. The religious organizations simply take advantage of these feelings of rage and fuel them to the next level.

I believe as more and more people begin to suffer economically here they will begin to cast a critical eye on our government and other economic powers. When this happens there will always be a minority of people who resort to violence in order to “send a message” to spur further acts of violence.

Again, I don’t believe acts of violence like Stack’s will solve the problem but I couldn’t tell him what would. Where would you tell him to turn to - the American Justice System? Does anybody even believe in that shit anymore? We take it a priori that we’re all more civilized than those crazy middle-easterners and perhaps we are, but it’s a slippery slope into the abyss and the perception of economic injustice can and will breed terrorism here just as it has around the world…

County Government avoids mistake

On this blog we discussed the proposed bribe incentive that some County officials were considering paying to GM employees who chose to buy a house in Allen County.

This was a terrible idea…

Luckily the County had a realistic financial impact study done and has decided not to pursue this terrible idea.

Now if we can just get the Henry Administration and Congress to start using realistic financial impact studies…

Mike Sylvester

My Thoughts on FWCS Budget Cuts

The Fort Wayne Community School Board has requested that the administration come up with $15 million in potential cuts by the end of the month. To put that into perspective it is roughly 5% of the total 2010 budget.

First, let me point out that I believe that the district has the financial problems it does for a variety of reasons - flight to the suburbs, changes and uncertainty at the state legislature and poor management and oversight from the administration and the school board. In a district that was performing academically the administration could (as Southwest Allen County Schools did) go to the taxpayers and ask for a tax increase. However, the majority of taxpayers are unlikely to support such a measure since they do not have the confidence in the Superintendent or her administrators to solve the problems we face.

Next, I think it’s important to note that attempting to whitewash the district’s academic problems by focusing on “New Tech” highschools and other such programs only serves to exacerbate the problem and cost the district millions of dollars. The real focus should be on ending social promotion, improving parental involvement and fixing the academic issues at the elementary schools. Focusing on high schools just won’t get the district the bang for the buck they need right now. Too many kids are promoted on without learning the skills they need, and by the time they get to high school it’s simply too late.

Having said that I have come up with a list of items that I feel should be implemented to reduce the budget while minimizing the impact on academics. I recognize that some of these will be difficult and require an adept administration to pull off. I also realize that many of these will be unpopular for various groups. Unfortunately, we are in a position where these cuts are necessary. It isn’t a matter of how much will get cut; it’s a matter of what will get cut.

I believe these items can help bridge the financial gap but I recognize that more will be needed in order to turn around the academics. The administration’s latest plan of “blame the teachers” is self-servingly fool-hearted and won’t do anything to solve the problems we face. I’ll have more on that in a future post but for now here are my ideas. Feel free to let me know what you think of these items or post your own suggestions:
Read more

Housing sales plunge in November

It is no surprise to me; nor should it be a surprise to the readers of this blog that November housing sales plunged.

The Government has been trying to artificially spur home sales by borrowing money (All of which we have to pay back with interest) and paying that money to first time homebuyers through a program that is rife with fraud.

As I have said for well over a year all this program has done is:

Accelerate home sales, meaning that there will be dismal sales months ahead since the demand was pushed forward.

Slightly prop up housing prices

Create mortgages that will be far more likely to fail as people who have no business buying a home decide to buy a home in order to get up to $8000 paid to them from the US Government.

Hurt the value of the dollar by causing the Federal debt to increase.

Increase the Federal debt; thereby creating a massive burden for future taxpayers.

Senate Democrats on the Verge of Colossal Mistake

Issuing a government-approved monopoly to insurance providers by mandating everyone buy insurance. Gee, that sounds like it will definitely bring costs down - what could possibly go wrong?

They should pass the motherhood and apple pie parts of the bill, kill the mandates and go back to the drawing board…

Stuff Worth Reading

One Local and One National Today:

Lockwood Marine pens a letter to a local newspaper regarding the city’s ~~bailout~~ purchase of the Renaissance Square property.
Yves Smith notes how empty Team Obama’s faux populism rings:

“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” Mr. Obama said in an interview on CBS’s “60 Minutes” program on Sunday.

Yves here. That is a curious and revealing statement. No, you may not have run for office on a “cream to the bankers, crumbs to everyone else” platform, but it is certainly what you have done at every available opportunity. Start looking in the mirror and owning your policies, instead of pretending you are somehow not responsible for them.
[...]
The industry signaled its complete disrespect for Obama when not a single Wall Street chief executive attended Obama’s anniversary of Lehman speech. They know they are in the driver’s seat because Obama already ceded too much and is now in no position to claw his way back. Had he acted boldly starting January 20, things could be very different, but he now lacks the strategic position to have any impact, and he never had the nerve to begin with.

A-f’in-men…