Dear Editor: 

Two years ago, it was easily predicted that the growth of the Edgecomb school budgetwas unsustainable.  Few listened, particularly the school board.  Simply put, that prediction was based upon the simple mathematics referred to as Compound Annual Growth Rate (referred to by the acronymCAGR).  It’s the phenomenon that leads to great wealth if someone reliably saves a small amount every week for many years or to great poverty if one doesn’tpay-off their credit cards each month.  In each case, the compounding of the interest acceleratesthe growth of the funds (or debts).  As anexample, a CAGR of 10% will approximately double the total balance in 7 years. 

Consider now the Edgecomb school budget. A simple calculation shows that the school expenses have been growing at a CAGR of 9% since FY2022.  It should be no surprise that since FY2022 the school’s expenseshave increased by 57% ....  but the really bad news …. at this rate … in four more years they will have risen 100%.  Given that there is no conceivable method by which Edgecomb could double its revenue in 8 years ….Costs will have outrun resources.  The growth of the school budget is predictably unsustainable!

In many organizations the painful solution is often large layoffs.  That’s why we see corporations like Amazon (who have huge free cash flow and seem very profitable) suddenly laying off 46,000 employees.  It's analogous to the seventh person getting into a lifeboat that only can hold six ... all seven drown. The painful part of the process is selecting who the seventh person is ... who must drown so the other six survive.  That's where we are in Eddy School. 

This is certain: 

 --Failure to end runaway spending threatens the very survival of the Eddy school.

--The school board’s recently proposed 19% increase is not a solution andwill significantly magnify the problem.

--The longer we wait, the more painful will be the solution. The time for action is now! 

Kathryn Rohr MD 

Edgecomb