Galt Joint Union High School District. Governor s May Revision

Transcription

1 Galt Joint Union High School District Governor s May Revision

2 Themes for the May Revision We still have three major problems in education finance: 1. Low levels of funding probably last in the nation now 2. Volatility of funding year-to-year funding levels are totally unpredictable 3. Uncertainty of funding estimates of funding are wildly uncertain from January to May to Budget enactment and beyond We will have all three of these problems until: The economic condition of the state improves and expansion begins State revenues and spending reach an equilibrium Education spending rises in priority at the state level There is a stable, predictable source of ongoing funding for education

3 The May Revision The May Revision is in keeping with the general theme of the Governor s January Budget Proposal Big cuts, already enacted, for the non K-12 Education side of the Budget Elimination of redevelopment agencies and redirection of property tax Realignment of programs from the state to the local level Extension of temporary taxes by vote of the people Relatively level funding for K-12 education Some things have changed Tax revenues have increased, independent of tax extensions The Governor has had no success getting Republican support for taxes

4 The May Revision Some things remain the same The State Budget is still dependent upon future events extension of taxes The State Budget is balanced only if revenues are increased by some future event Electioneering will continue with education funding threatened if new revenues do not materialize Education funding is the hot button for voters to approve taxes Voters will not extend taxes to increase welfare payments or to increase funding for prisons so we can expect education to remain part of the electioneering

5 Stability for Education Is this a more stable Budget for education? We think Yes Less reliance on tax extensions only $4 billion at election risk instead of $12 billion More reliance on ongoing revenues of $6.6 billion Cuts to non-k-12 Education side proposed in January have been made $13.4 billion Proposition 98 has risen, deferrals have lowered, but could be reinstated if needed Less exposure to suspension of Proposition 98 and no political will to suspend Overall, we are much safer in May than in January However, we need continued vigilance through enactment and beyond

6 Risks to the Revised Budget Proposal In January, the key risk to the Governor s Budget was voter approval of three temporary taxes by July 2011 The Legislature did not agree to put the issue before state voters The Legislature, however, did agree to shift $1.9 billion in special fund revenues (Proposition 63 for mental health and Proposition 10 for the First 5 Program) to General Fund programs, another major risk The May Revision, however, reverses $1 billion from the Proposition 10 redirection because of pending litigation

7 Risks to the Revised Budget Proposal New risks to the state spending plan accompany the May Revision: Tax proposals worth $4 billion could be rejected by the Legislature or state voters Litigation challenging special fund shifts, social services grant cuts, and realignment proposals Economic and revenue risks Turmoil in the Middle East could raise oil prices, triggering inflation and impairing the recovery The European debt crisis could boost interest rates and limit access to capital Consumers could pull back on spending

8 Revenue Limits The May Revision acknowledges a statutory cost-of-living adjustment (COLA) for revenue limits of 2.24%, up from the estimated 1.67% COLA in January The Deficit Factor for school districts and charter schools is %, up from % in January The Deficit Factor in the Governor s January Budget was too high, resulting in an cut of $22 per ADA in The May Revision corrects this error and the per-pupil revenue limit funding will indeed be flat

9 Base Revenue Limit After Deficit Factor $7,000 $7,511 $7,511 Apply the deficit of % to the undeficited base revenue limit $6,000 $5,000 $1,484 $4,000 Funded Base Revenue Limit Galt Joint Union High School District $3,000 $2,000 $6,027 Funded revenue limit = $7, x ( ) = $7, x = $6, $1,000 $ Base Revenue Limit Before Deficit Base Revenue Limit After Deficit

10 Proposed May Revise Funding vs Enacted Budget Flat Funding The Governor s May Revise funds the 2.24% statutory COLA ($164 for GJUHSD) BUT - also increases the Deficit to % for The funded base revenue limit is FLAT between and $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $7,347 -$1,320 $6,027 Funded Base Revenue Limit % Deficit $7,511 -$1,484 $6,027 Funded Base Revenue Limit Actual Proposed Deficit

11 Projected vs. Actual Funding Per ADA

12 K-12 Revenue Limits Galt JUHSD Average Unified District for Base Revenue Limit per ADA (A) Proration Factor (B) Funded Base Revenue Limit (C) = (A) x (B) Base Revenue Limit $7, * $6, COLA per ADA $ Base Revenue Limit $7, ** $6, Net Funded Revenue Limit (Line 1, Column C) $6, Dollar Change (Line 3, Column C, Minus Line 4, Column C) $ Percentage Change (Line 5, Column C, Divided by Line 4, Column C) 0.00% * = ( deficit factor) ** = ( deficit factor)

13 Key Major Budget Assumptions for Projected Budget Following are key budget assumptions for based on the Governor s May Revision: ADA 2, Projected P-2 ADA (Funded at 2, ADA P-2 Projected ADA COLA 2.24% Deficit Reserve from Ending Fund Balance Tax Extension Not Approved Step and Column Health and Welfare Staffing Levels Operating Costs $330 Per ADA $175,991 Certificated, $37,649 Classified -0- no increase Based upon Projected Master Schedule. No COLA Based upon budget levels with adjustments as presented to board. One-Time Federal Funding Budgeted Revenue and Expenses removed from budget as one-time in General Funded Positions funded from Jobs Bill Funds in added back into budget. Fund Balance Reserves 3% General Fund Reserve budgeted

14 District Budget Overview Based on Governor s May Revision Budget Proposals PLAN B IF TAX EXTENSION NOT APPROVED ($330/ADA REVENUE LIMIT CUT) Projected Budget Structural Deficit On-Going -841,299 Revenues: Revenue Limit Flat Funding -0- Federal ARRA Removed -535,369 State Flexibility Transfer Removal -417,092 Expenditures: Add Back One Time Furlough Days (3 Days) -204,636 Staffing Reserve Master Schedule -218,308 Add Back Salaries(GF) Paid with Federal Jobs Bill Funds -443, Projected Step & Column -213,640 Remove Federal One-Time Expenditures (ARRA/Jobs Bill) 665, Budget Reductions Not Implemented -5, PROJECTED DEFICIT -2,213,458

15 District Budget Overview Based on Governor s May Revision Budget Proposals PLAN B IF TAX EXTENSION NOT APPROVED ($330/ADA REVENUE LIMIT CUT) Projected Budget PROJECTED DEFICIT -2,213,458 Board Approved Budget Reductions / Adjustments as of May 2011 Reduction in School/ Dept. Supplies Budget 20% 134,000 Board Approved Flexibility Transfers 456,042 Certificated Reductions FTE 486,716 Classified Reductions FTE 347,369 Certificated Management -.40 FTE 45,000 Elimination of General Funded Freshman Sports Programs 17,525 Field Trip Rates Increased Rates 29,600 Total Board Approved Budget Reductions / Adjustments 1,516, PROJECTED DEFICIT -697,206

16 District Budget Overview Based on Governor s May Revision Budget Proposals PLAN B IF TAX EXTENSION NOT APPROVED ($330/ADA REVENUE LIMIT CUT) Projected Budget PROJECTED DEFICIT -697,206 Less: Reserve from Fund Balance for -726,000 $330/ADA Funding Loss No Tax Extension PROJECTED DEFICIT (Including $330/ADA Loss) -1,423,206 Available Fund Balance Reserves To Cover Deficit (ONE-TIME): Prior Years Flexibility Transfers Reserves 772, Unappropriated Fund Balance Savings 939,592

17 Next Steps Balanced budget must be adopted by the district prior to June 30, 2011 Galt JUHSD Special Board Meeting June 28, 2011 State Budget will most likely not be in place by then Developing the budget requires: Clarifying assumptions How much revenue? How will expenditures change? Guidance from Sacramento County Office of Education (SCOE) Reserve of $330/ADA from Ending Fund Balance Reserve For Economic Uncertainties 3% Minimum Once the State Budget is adopted, the district makes adjustments to its budget within 45 days

18 Questions?