Another week has gone by in this crazy COVID-19 world, and local governments have still done little to find additional revenue or cut expenses to fix their woefully out-of-balance budgets. The magical bailout from the federal government isn’t coming any time soon, and all municipalities, including school districts, need to prepare for the worst. Every week that goes by while waiting for elected officials to make the tough decisions to mitigate deficits extends the path to recovery, moving the finishing line further and further away.
Here are a host of additional suggestions for creative ways to muster the resources necessary to help local governments survive.
Media Location Fees
Film and TV production are exploding as streaming services race to provide new and original programming. Netflix alone has a $17.3 billion budget for content in 2020. HBO was recently looking for a site in Nassau County to film a new series about the Gilded Age, and was willing to pay $500,000 a year for a multi-year land lease.
Long Island is a desirable filming location with a wide range of beaches, mansions, courtrooms, and even jails, that are needed for productions. Location scouts like to work with municipalities that make it easy to film, keeping paperwork to a minimum. The first town or county on Long Island to create a top-notch website with images for every possible filming location, and allows companies to submit permits online, will see a large bump in film permit revenue, along with increased economic activity from the legions of employees it takes to film a major production.
Banking
Every local government, for several months a year, has large predictable bank balances from tax collections, which make government deposits a dependable profit center for banks. Because of this, local governments should work together to put out an RFP for one bank, to provide the best possible interest rates on deposits, and waive all account service fees.
Also, fees for underwriting bonds are highly negotiable, as are fees for the rating agencies that are needed to help bring the bonds to market. Municipalities paying for bond ratings are among the biggest conflicts of interests in the public sector, and local governments need to shop for better underwriting fees if their municipalities’ current relationships aren’t willing to be more competitive.
Credit Card Processing Fees
The credit card processing fee on government transactions can be as high as 100 basis points above the roughly 2 percent fee that credit card companies receive for the privilege of allowing online payments. Credit card processing is a highly competitive field, and several local governments working together on a joint bid can lower processing costs as much as 50 basis points per transaction.
The Cost of Paper
Every intergovernmental communication, including all board and committee meetings, should be conducted electronically. Not only will going paperless save on the obvious costs of paper, toner, printer and copier leases, it will save on the storage costs to archive all the paper generated.
Pork Projects
In January 2019 Newsday reported that Nassau County “has earmarked nearly $15 million since 2013 for projects for legislators’ districts, including statues, a tractor to maintain museum grounds, Wi-Fi and weight room equipment in schools and a roller hockey rink.” During a financial crisis all pork spending should be eliminated.
School District Busing
New York state law mandates district busing for students who attend private school within a 15-mile radius of their home school district. On average, Long Island school districts spend well over $2 million per year to bus their students out of the district. There are roughly 30 school districts on Long Island that own and operate their own bus fleets. Since these school districts already bus their own students through a neighboring district to a private school, then why not pick up other districts’ students along the way?
I helped foster this exact busing program during my time on the Roslyn School board. Busing just 10 students a year, from neighboring districts to the same private schools where we were already transporting our own students, generated Roslyn an extra $100,000 annually. And, because we charged half the rate of the private bus companies, the districts we worked with saved 50 percent on the cost of busing students out of district. If all of Long Island’s 124 school districts worked together on a shared private school busing initiative, taxpayers would save several tens of millions of dollars.
Broadcast Rights for High School Sports
While I was on the Roslyn School Board, I noticed Cablevision was paying Long Island school districts $2,000 a year per district for the right to broadcast their sporting events on MSG Varsity, a stand-alone cable channel. This was a brilliant move by Cablevision. For less than $250,000 a year, they had original sports programming that enabled them to retain customers, cross sell services and collect advertising revenue.
I believed the price Cablevision paid to be extremely low, so I engaged two Harvard graduate students to conduct a study to ascertain what individual Long Island public-school broadcast rights were really worth. The final study reported they were worth as much as $80,000 per district. In short, public-school broadcast rights were being given away for pennies! There are 124 school districts on Long Island. They should all work together to create their own high school sports channel and use profits from advertising to lower taxes.
Everyday local governments wait to make necessary changes to their budget, their deficits widen. Most municipalities haven’t begun to roll up their sleeves and do the hard work necessary to make up for the shortfall in revenue. Since federal bailout money isn’t coming any time soon, we all need to ask our elected representatives, “What are you waiting for?”
