How Do We Solve the School Budget Deficit Problem?

School budget deficits, alternative revenue streams, social commerce

The problem appears to be that cycle of the economy is higher taxes to pay for higher costs. Now before you storm the Bastille, higher taxes appear to be off the table for now. However Freeport just was reported to be looking at a 9% increase in taxes.

This could be coming at you very soon. There is only so much magic going around. Think three-card monte… who’s got the revenue, who’s got the revenue?

Well how do we solve this Gordian knot? What has to give and how did this happen? Well it appears that tax bases have been shrinking and salaries keep going up. Now salaries going up is going to be a given and continuous. Revenue bases shrinking aren’t going away either, that is traditional bases. What has to change, in my humble opinion is how we actually generate revenue.

The biggest generator of revenue today is actually technology. Apple, Inc. generated just 1 billion less than ExxonMobil last year. Instagram was purchased for $1 billion USD. Facebook, Google and LinkedIn just IPOed and have valuations higher than most producers of physical products. The question is should school districts be keeping the same model just refocusing on different revenue streams?

Think about possibly tapping into the world of social commerce. How can this be done? Well just think about it. Students and families are on diverse forms of social media and generating those valuations. How about building a social network that actually funds the schools that create such a network. It is called revenue sharing and it is possible. Take a look at a beta prototype site currently running and see what you think. Can this solve the problem?

Full disclosure here – I built it and own it but it shares revenue with school districts at 70% of revenue after production expenses.  There is no cost to schools, it is free - period. I’ll say it again – it is free this is not sold to schools it simply generates revenue that it shares with each school district and can be customized to look like the district – colors and icons.

Would like to hear your opinion. Honorscholar.com

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Ron January 14, 2013 at 07:37 PM
Since APPLE ,parents and the NYSED administrators know everything let's just dump the teachers and let the State Ed teach the parents via internet conferencing and parents could then in turn on their time educate their own children with the IPAD. Simple.
Patrick Aievoli January 14, 2013 at 08:20 PM
okay if you think that would work... i am not talking about the education process i am talking about funding the education process. teaching occurs between the student and teacher - however that is done. I am talking about using a resource that currently is generated by the community to fund the needs of the community. If the district wishes to buy chalk and boards whatever - to subsidize teachers or to add staff - not my business I just want to use social commerce to help fund school budgets - i pay taxes here as well and my kids are well past k-12. just like to see the money go to the schools not outside sources.
Daniel January 15, 2013 at 09:16 PM
How about just take all sports out of the equation. If you would like to play a sport, pay for it. Ask the parents of the students who play on the hockey "clubs" how much it costs them per year? It is called a club because it is not district funded. This will not solve all of the problems, but it sure will help. I won't even go into the big money saving answer here which is district consolidation. That is just way too much for people to handle or comprehend.
Patrick Aievoli January 16, 2013 at 12:56 AM
Schools have it is called austerity. But then what? What direction is this going? Cutting services and what is the basis of a high school experience? I was an athlete and got nothing but bad knees from it. However sports, music, art, clubs, are all part of society so why work towards elimination? Why not work towards reformation of revenue generation. It is a digital economy now, time we embraced that new economy and learned to work with it to go forward. Elimination is a slippery slope towards where? Again in my opinion.
Robert W January 16, 2013 at 01:22 AM
Get rid of every unfunded state mandate. If it's so important let the state fund it! Consolidate school districts! Do we need 127 superintendents on Long Island? Get rid of every title that has assistant in it! My districts high school has 1 Principal and 4 assistants 1 for each grade! Restructure contracts. If the job requires a masters degree fine. No extra money for plus 30 in irrelevant credits! Have new employees pay for part of healthcare and pensions. The money is there however its not for the children but the greedy adults!
Mike kimmel January 16, 2013 at 01:42 AM
They do pay for their healthcare and pension!!! Come on bro, stop embarrassing yourself. You are right about the credits though.
leslie January 16, 2013 at 02:00 PM
Colleges should pay high schools for bringing them exceptional students, deverse students etc.. ..... yea too radical...
Patrick Aievoli January 16, 2013 at 02:48 PM
Actually that is exactly the concept. Colleges would advertise on the website and literally pay to have their message delivered to the students. Instead of paying the publication/media the ad monies would go back to the school district via a donation from the website revenues. You are exactly right, the funding gets directed tot he school district through this manner. Over 4200 colleges in the US and a very competitive space right now. Also any online courses would generate a revenue stream back to the school district. I completely agree and that is what I am proposing. Please take a look - see article for link.
leslie January 16, 2013 at 05:25 PM
lol! You caught me, I did not read the article before posting my comment.....Funny.... Back to the subject though:. We , as taxpayers, are delivering the colleges a "product" that they are making money off of.
Patrick Aievoli January 16, 2013 at 05:39 PM
Again I agree. That's the whole point. Stop misdirecting the funds to the pubs/media. It is possible to generate funding directly to the schools. It is free - NO COST - and helps generate funds to the schools. I am doing this at 70% to schools - after production costs. The 30% goes to build the next school site. Once that is finished the 30% goes specifically to a student scholarship fund. My opinion stop giving the funding to FB, YouTube, Twitter, Instagram... get it?
Daniel January 16, 2013 at 09:36 PM
I was an athlete as well. I played travel hockey and club hockey. Nobody in HS even knew there was a hockey team. It was a few hundred dollars a year. You want solutions, start with cutting the budget. Sports can still be part of the HS experience, but the focus of school should be education. You have to start cutting somewhere, and athletics should be the first to be reformed, not eliminated. Pay to play, that's all.
Patrick Aievoli January 16, 2013 at 09:41 PM
Kind of agree but the direction is finite. Cutting is great, efficiency is great but the machine needs funding that grows not a plan with a finite approach. This is where you end up anytime you go backwards and not forwards. Sooner or later you have to change the components not the skeleton. I guess it is like try to lose weight. You can just cut off a limb but it might be better to change your diet, since the other solutions leaves a non-working device? Sooner or later the cuts go too deep?
Daniel January 16, 2013 at 09:57 PM
I understand 100% your point. The thing is, this is Long Island. People love to complain and in the end nothing changes. And as a graduate of Hills West, I can personally tell you how out of their minds the parents in this community may be. The scare tactics are insane, cut the budget and our schools will not be the same blah blah blah. It has been the same conversation for a while. There needs to be shared sacrifice and even if that does ever happen, the change will be gradual. Your proposition although a very legitimate one, would not be feasible until major changes are undertaken first.
Patrick Aievoli January 16, 2013 at 10:02 PM
completely agree with shared sacrifice. But again wrong direction with the "cuts" concept. The reason for the diminished budgets is simply that the tax revenues are not there from business sources. Last year alone online sales were up 56% this is where the money is going. Nobody can afford higher taxes, so the revenue streams have to change. Higher Ed is suffering as well with any tuition driven school they also need to tap into alternative revenue streams. The well is going dry. A linear base of simply taking money is over everybody and everything thing has to be a revenue stream, new century, new economy. The linear path is done a new cyclical path has to be structured just like a farmer you feed the field to get the produce.
Tom January 20, 2013 at 05:12 AM
Teachers SALARY are the biggest problem, instead of them "negotiating" a contract and then RAISING the school budget and our taxes to pay for their raises maybe just maybe the the school budget can be passed and then the teachers salaries can be sone within the budget, shouldnt be to hard given the fact they only work 9 months of the year and are off every weekend and holiday.
Peter T January 20, 2013 at 06:16 AM
There are 100's of school districts in NY state almost totally financed by the state (Example Waterloo's budget is $60 million, state aid 53 million). And why is that you ask? For the last 45 years we in NY state have rule and regulated much of upstate out of business when it came to industry. So Long Island has been making up their funding every since. Solution? Start slashing all those poverty creating NY business regulations and consider fracking. ( fracking brings in over a billion in tax revenue in Pa)
Patrick Aievoli January 20, 2013 at 12:45 PM
Albeit both comments have some value but in my opinion here is where both of the opinions fall short. Again we are talking about cutting because of limited supply and in the other we are talking about focusing again on a finite form of revenue. The overall goal is to change the thinking from elimination and finite streams of revenue to streams of revenue that grow and are self-sustaining. Social commerce is growing at leaps and bounds and sustains itself. It is just in its infancy and is a driving economic force that can be implemented at any level, local, state and global. Cutting salaries and tapping into a new source of finite energy for sale has an endpoint. We need to think of solutions that expand over time not contract and ultimately fail. Please see my follow up post on social commerce from a local business person. http://huntington.patch.com/blog_posts/proving-the-power-of-social-commerce
Patrick Aievoli January 20, 2013 at 01:17 PM
For the record my father's job encompassed spraying asbestos. Back in the 70's the dangers were not well known. He came home with it on his clothes I am sure. So we didn't know those dangers as well at first. We did when he passed from lung cancer. Second I have been an academic living on Long Island for 25 years (one income for most of those years) and honestly I do not know what it is to not work summers or vacations or to come home at 3:00 and be finished. My father had a saying "if your hands are cold I will buy you gloves but for God's sake son get them out of your pockets because we have work to do"... I believe words to live by.


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