Tag Archive | "economic stimulus"

John Gratto

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John Gratto

The Sag Harbor superintendent of schools on balancing the budget and what the federal stimulus package means to the district.

Could you sum up the current fiscal situation of the district at this point, are there going to be any mid-year cuts?

At one point the governor proposed a mid-year budget reduction, but in fact that was never passed by the legislature. But in anticipation of that, on October 6, 2008 we froze spending by $100,000. Even before that we had saved over $300,000 without reducing educational programs. That was good in that it helped to keep our education programs in place and it helped to carry over money for next year, to help minimize taxes for next year.


Do you anticipate some change in state aid or economic stimulus package from the federal government – and how do you see that working within our district.

Governor [David] Paterson’s proposal is still just a proposal, so it hasn’t been acted upon by the legislature yet. Last week, the stimulus package was approved by the federal government so that is scheduled to give us about $190,000 more in aid, that we are thankful for. If we get that it will keep programs in place and minimize taxes to the public.


Do you believe that the economic stimulus package is going to be enough for the district?

I do, because in total we had made about $677,000 in cuts in the budget for next year. If you look at the budget to budget numbers all in total we cut out $677,000 dollars, that’s on top of the $310,000 we cut this year. So all told, that brings us to a place where we have high quality programs in place and I hope we have a tax levy that the public will believe is reasonable.


What is the current proposed tax levy for next year’s budget?

What we will share with the board tonight [Monday] is 4.5 percent; but I say share with the board, because it is the board’s decision and they aren’t scheduled to adopt the budget until March 23. They may decide that is too high, or may decide they want some more cuts to get to a lower tax rate, or more revenue to get to a lower tax rate. But the 4.5 percent is for both towns.


What will the funds from the stimulus package be used for?

Funds won’t come till next school year. They have targeted it for IDEA funds. That stands for individual disabilities education act. When the law changed in 1974, it said that all students with disabilities must receive a full education. The state at that time promised 40 percent funding. But in fact, it has never given 40 percent funding; it has been about 12 percent funding since 1974. With this new stimulus package, the funding will go up to 22 percent of the cost of educating special education students. Still not what they promised, but still 10 percent better, so that is good for us. A lot of that goes to paying for special education staff, we have a lot of students here that are special education and probably 12 or 15 special educators, so it will go toward paying their staff instead of that being funded in the general education portion of the budget.


Do you anticipate any cuts to programs for next year?

No, again, we have been stingy on staff development. From a student’s perspective, I don’t think they would notice any difference. They will still go on field trips, they will still have sports events and still go to a music competition. The staff has retrenched a bit, for example I didn’t go to a conference last week in California – the American School Administrators Conference, it may have been valuable, but I didn’t go. The staff has retrenched some but I don’t think the students will notice.


Will the economic stimulus package make up for the loss of revenue that we have seen in the district or will see this year?

Yes actually it will. The details are still being flushed out, but here is how I understand it on February 23. Governor Paterson in his budget proposal, proposed that Sag Harbor get $185,000 less in aid. As I understand it, our stimulus package was designed to offset that. So in fact it will; we will get $190,000 in aid, which will offset the $185,000 cut proposed by the governor. Typically we get an increase in state aid, so this year not to have a reduction is progress.


Do you anticipate problems in the future, and how do we mitigate the problems for next year?

Anticipate problems in the future? Yes. I think that next fiscal year will be even more difficult than this fiscal year. I say that because assessments are typically two years behind. Typically people have challenged their assessment, it is certainly possible that in East Hampton and Southampton, they will go down. If that is the case, then there are thousands of dollars to assess from and therefore people’s tax rate may go up. Nobody likes their taxes to go up. So we have made an awful lot of cost efficiency savings this year and we may have to look for more next year. I think programs will be in greater jeopardy next year, than they are this year.


What programs would you think might be in jeopardy?

I would look closely at everything that isn’t mandated. I would look closely at athletics, music, guidance counselors. I’d have to look at kindergarten. And that is unfortunate, because all those things add to the quality of the school system and I would hope that we wouldn’t have to dismantle any of them. There is always a balancing act between keeping quality and keeping quality at a price that people are willing to pay. I often draw the analogy that running a school is like running a really big house. What happens at your house? If you want something you have choices, you either put it off, or go make more money so you go get a part time job – that’s kind of what revenue is. Or you decide to live without it. And we may have to live without a few things. They may be mitigated by increased revenue, but we have to take a look at everything and see how important it is.


What are some of the positives that you see right now?

I think fundamentally, everyone should keep sight of that we have a great school system in place already. So if we had to live without some program, there is probably a chance that some other school doesn’t have that program anyway. Fundamentally we have an awful lot of good things in place, great academic results and great extra-curricular offerings, so even if we were to cut some out, we would still have a great quality program. One of the things that I think of is that we have a program at the Elementary School called Japanese culture. Well, suppose elementary students didn’t get exposed to Japanese culture – its enriching, it’s nice, but it doesn’t have a great impact. We may have to make some decisions like that. We have a good counselor-to-student ratio as opposed to other schools – suppose our student ratio wasn’t that good, it wouldn’t matter. Our students wouldn’t get help that quickly or as thoroughly as they need to, but those are some decisions that we may have to make. The counselor-to-student ratio is one-to-150; in other schools it is one-to-250. Our students get help quickly and effectively; if they were in another school they would have to wait longer to see a counselor. Those are the types of things we could look at, because we can’t touch the core in structural program. But there are an awful lot of good things in place here. 

Congressman Tim Bishop

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The local representative on preventing foreclosures, failures of the bailout and how Obama’s stimulus may help the East End

by Marianna Levine

This past Thursday, President elect Barack Obama gave a speech about the economy and in it he outlined his economic stimulus package. Could you tell me what aspects of it you agree with and how specifically it will be implemented here on the East End of Long Island?

I am in general agreement with the President’s outline. I think a lot of specifics need to be filled in but I believe that infrastructure spending provides us with the greatest bang for our buck in terms economic stimulus. So I think that is an imperative. Not only is it an imperative in terms of jump starting the economy it also gets us improvements that we need with highways, bridges, tunnels, airports and seaports.


Specifically for the east end of Long Island?

This is were the stimulus is a little difficult to explain. Both the President-elect and Speaker of House have made it clear there will be no earmarks in the stimulus package. That is to say there will be no congressional directive spending. Therefore the way the money is going to flow is that the money is going to go from the federal government to the states and the states are going to make the allocations. So this is not something the members of congress are going to be able to control. The judgments about what projects are getting the funding are going to be made by the government and the various state agencies like the department of transportation, or the state’s department of health and education.


If you were the one giving that speech, what would you state as your vision for economic stability and growth in the coming year for your constituency?

We have to do two things. We have to create jobs and put people back to work and that is what the economic stimulus package is all about. And the other thing is we have to keep people in their homes. Currently there are over 7,000 families a day being foreclosed out of their homes. The collapse of the housing market is at the root of the economic difficulties that we are now having and we are not going to climb our way out until we fix the housing market.

And we have to make much, much more effective use of the so-called TARP funds. They have also been called the “bail out”. TARP stands for Troubled Asset Recovery Program, and that’s the Wall Street bail out that the Congress passed back in October. We passed up to 700 billion. The first 350 has been spent by the current Secretary of the Treasury in a way that in my view has not facilitated economic recovery and absolutely has not facilitated keeping people in their homes. The President-elect has made it clear to the Congress that he now wishes us to release the second 350 billion, and I will only support that if it has a significant foreclosure mitigation built into it. I voted for the first TARP money thinking that was how it was going to be used. That’s exactly what the Congressional intent was for the money but that is not how the current Treasury Department used it.


What do you think can realistically be done to implement some of your wishes for our area in the next year or two?

If we pass the stimulus package and it is properly constructed then a significant portion of the money will go to infrastructure investment, and a significant portion will go to helping those in the greatest need — for unemployment compensation and food stamps and so on. I think that would be an effective stimulus package. If we can modify existing mortgages to make it easier for people to make their monthly payments, that’s what the second half of the TARP money will be about, then I think we will be successful in reducing the number of families who are currently being foreclosed from their homes.


Could you tell me briefly how government money from any sort of stimulus package gets distributed, and who decides the amounts and where the money goes?

The money is going to flow from the fed government to the state and there are existing formulas that govern that. For example, there will be money in the stimulus package we believe at the present time anyway for schools and there’s a formula about which federal money flows to the states to assist with K-12 education. By the way, all of this is very fluid. All of this could change or any bit of this could change. But the way it currently stands, existing formulas that govern federal moneys going to the states will be used to distribute the money.


Do you have any new thoughts on current bail out packages, and would you re-consider your vote on the banking bail out considering how many industries and institutions are now looking for a helping hand?

When I cast that vote back in October I absolutely was convinced it was the right vote. I am both very very angry and disappointed with how the Treasury Department took the authorization that Congress gave it. Congress made it very clear that the money was to be used back in October in a particular way and the Treasury Department didn’t use those funds in that way. And so, had I known the funds would be used in the way Sec. Paulson wound up using them, I would have voted no. But I continue to believe that the way Congress outlined the use of those fund was the right way to do it. Hopefully that is the way we’ll do it now when we release the second half of those funds.


What do you perceive to be the major political or economic concerns in the coming year that people haven’t considered yet? In other words, is there anything you know that we don’t yet?

The Economy. The over riding concern is the economy: the massive loss of jobs, massive reduction of consumer spending, and a huge loss of economic confidence on the part of everyone. Those are the three things we have to attack and attack as aggressively as possible. The government has to be the spender of last resort in order to stimulate demand. And we have to restore confidence to our financial markets and our credit markets. I believe we are on the right path. Let me lay it out for you, 70% of our economy is based on consumer spending so when people are spending less it has a ripple down effect through out the economy. If people aren’t going out to eat, then restaurants have to lay off people. Generally, reduced levels of economic activity are already being felt by some people every single day. Those who haven’t been affected yet, they ultimately will be. People are spending less and that has a dramatic effect on the economy.


During this past election cycle more people became involved in the actual political process than ever before, and now people may be wondering how they can continue to be involved in their local and national government. How do you think people can continue their involvement? In particular what do you think people can do to help the economy right now on a personal and local level so that they feel like they are making a difference and creating positive change?

Not to sound like George Bush, but people need to spend money. They need to be responsible about it because one of the ways we got into this mess is by people spending money they didn’t have by borrowing against their home equity or using up their credit cards and that’s part of the economic downturn now. People are finding themselves over extended. I think people need to be responsible but I say the principle thing that needs to happen is that the government needs to become the principle spender. I think if the government spends then others will follow suit.

Putting the economy aside for a second it’s a very encouraging development that so many people have gotten involved in the political process I hope they remain involved. We have a participatory democracy and it only really works if people participate. One of the great things about the Obama candidacy was the extent to which he energized people and brought people into the political process that previously hadn’t been.


Speaking of positive change, what do you think is going well here on Long Island, and what do you think will continue to go well?

Well, we have a very good quality of life here. We have remained very good at protecting our environment and open spaces. Our schools remain first-rate schools. Our communities are great communities in which to raise one’s family. We have very good economic stability here. Housing prices have dropped but not as dramatically as elsewhere in the country, and unemployment is up but not anywhere near as sharply as elsewhere in the country.


How will you be spending Inauguration Day?

I’ll go to inauguration itself with my family, and I will be doing a series of press interviews. I’ll be hosting a reception with Steve Israel from the neighboring congressional district for people coming down from Suffolk County.


Did you have a large number of requests for Inaugural tickets? How were they dispersed and do you know if anyone from Sag Harbor is going?

Fred Thiele is coming with his kids. We had several thousand requests for tickets. We put a few tickets aside for other elected officials such as Fred, but for the most part we released the tickets to the public and had a lottery. It was the only fair way to do it.