SAN DIEGO UNIFIED SCHOOL DISTRICT

Transcription

1 SAN DIEGO UNIFIED SCHOOL DISTRICT The Budget Picture: An Initial Assessment Board Of Education Presentation January 22, 2008

2 Purpose This Brief Kicks Off Budget Development Examine The State s Evolving Fiscal Crisis Highlight The Impacts On The Education Budget Mid-Year Cuts Reductions Our First Look At A Major Challenge Provide Initial Assessment Of Potential Effects On District Funding Depict The Budget Development Timelines State Process District Process Summarize Concerns Take-Away Thoughts 2

3 State Fiscal Crisis Revenues Vs. Expenditures Governor Has Described The State s Problem As Not A Revenue Problem But As Expenditures Growing Out Of Control. Spendin g More Than We Have Chart Provided By California Governor Budget Office 3

4 State Fiscal Crisis Multi-Year Problem??!! Must Act Does Not Appear To Be A Short-term Dilemma Chart Provided By California Governor Budget Office 4

5 State Fiscal Crisis Massive Budget Imbalance The State s General Fund Has To Be Overhauled Chart Provided By California Governor Budget Office 5

6 Governor s Approach To Declare A Fiscal Emergency In Response To $14.5B Deficit Invoke Prop 58 1 st Application Of 2004 Law New Political Territory Apply Across-The-Board Cuts Salami Slice Approach No Precision Suspend Proposition 98 Slash K-12 Education > $4B ~10% Distribute Dramatic Reductions To All Programs & Stakeholders Cut for Most Education Higher Education (Colleges) Loses $1.1B Program Social Services Suspend SSI/SSP COLA Reduce CALWORKS s Health Services Shrink Medi-Cal Decrease $2.7B Infrastructure Close 48 Of 278 State Parks Prisons Early Release Of 26K Inmates Decrease $378.9M 6

7 State Education Budget Strategy Great Uncertainty Governor Proposes Suspending Prop 98 in 2008/09 Will The Legislature Approve With A 2/3 Vote? Governor Proposes A Net Cut In Special Education Of $189M Does This Violate Federal Maintenance Of Effort Requirement? Governor Proposes A New COLA Factor Using Consumer Price Index For Wage Earners And Clerical Workers (CPI-W) Who Will Support A COLA With A Lower Yield? 7

8 Mid-Year Education Cuts Smaller State Tax Revenues Cause Proposition 98 Minimum To Drop $1.4B Proposal Is To Cut Only $400M $360M From K-12 and $40M From Community Colleges Plan A Is To Identify Sufficient Categorical Funding That Is Either Surplus Or Not Yet Allocated Plan B If Insufficient Categoricals, Tap Revenue Limit Funds Maximum Exposure Of About $60 Per ADA Initial District Actions Board Authorized Central Office Hiring Freeze Overtime Reduction Travel/Conference Limitations $360M About A 1% Revenue Limit Deficit Possible SDUSD Impact Loss of $6M-$8M 8

9 2008/09 Education Budget Reductions Compared With Full Funding For COLA And Growth For Programs In , The Governor s Proposal Cuts K-12 Education By $4.4 Billion These Cuts Average About $740 Per ADA From Full Funding Levels Saying It Another Way... Governor s Proposal Is For Funding To Be About $1.8 Billion Less Than Current Year, Equal To Average Cuts Of: $129 Per ADA From Revenue Limits $30 Per ADA From Special Education $146 Per ADA From Categoricals Caution These Are Rough Statewide Averages There Will Be District Variation Total Loss Of About $305 Per ADA From Current Year Levels! Information Provided By School Services of California 9

10 Impacts to 2008/09 SDUSD Budget Unrestricted General Fund (GF) Most Flexible Money Cut Programs Pos Neg Revenue Limit Class Size Reduction Mandated Costs Hourly/Supplemental Deferred Payment/Cash Flow 10

11 Impacts To 2008/09 SDUSD Budget Restricted General Fund (GF) Some Of The Programs Impacted: Categorical Cuts No COLA 6.5% Rollback Special Education Instructional Block Grant Targeted Instructional Improvement Block Grant Economic Impact Aid Child Nutrition Community Based English Tutoring English Language Acquisition Program Arts and Music Block Grant Teacher Credentialing Block Grant Gifted And Talented Education Transportation High Priority Schools Grant School & Library Improvement Block Grant Pupil Retention Block Grant Supplementary Secondary School Counselors Professional Development Grant 11

12 Impacts to 2008/09 SDUSD Budget Other Funds Governor Recommended Cuts Include: Cuts Extend Beyond The General Fund Adult Education Receives COLA And Growth But Then Offset By 10.9% Cut Child Development Receives No COLA Reductions In Services Expected Food Services Proposal To Reduce Meal Reimbursement Rate By 2 Per Meal 12

13 1 st Interim Total Potential Impact To The District 1 st Interim Deficit Projected $7M Costs Modified By Labor Settlements Governor s Budget Proposal Unrestricted GF Restricted GF Other Funds (Except GF) Very Preliminary Reduction Number Applying Initial State Rationale And Calculations Approx $70M Loss Certainty The State Strategy Will Evolve The Reduction Target Will Evolve 13

14 State Budget Process Timeline January 10 - Governor Presents His Budget Proposal Governor Declares a Fiscal Emergency Legislature Has 45 Days To Act Mid Feb - LAO Issues Analysis Of Governor s Proposal With Options Feb 23 - Legislature Acts On Fiscal Emergency Declaration May 15 - Governor Issues May Revise Updating State s Finances & His Proposal June 15* - Statutory Target Date For Legislature To Adopt State Budget June 30* - Statutory Target Date For Governor To Act On State Budget July/Aug/Sept/???? Governor/Legislature Finalize State Budget *Legislature/Governor Have Met The Statutory Targets Only 4 Times In Last 20 Years. 14

15 District Budget Process Timeline January 10 Governor Presents His Budget Proposal Governor Declares A Fiscal Emergency Legislature Has 45 Days To Act Feb/Mar/Apr/May Board Holds Budget Workshops To Review/Assess/ Probe/Receive Comments On Potential Reductions Mar 11 Board Meeting Actions Adopt Second Interim Report Decide PKS (Certificated) Notice(s) May 15 Governor Issues May Revise Updating His Proposal May/June Board Gives Direction For Refinement Of District Budget June 24 Board Adopts District Budget May Be Qualified Or Negative 2 nd Interim Certification July/Aug/Sept/???? Board Adopts Revised District Budget To Accommodate Final State Actions 15

16 Our Challenge The San Diego Triangle How Is The Triangle Shaped With Budget Cuts Tax Hikes Both? Governor SDUSD How is the Triangle Balanced How Do We Reach Consensus & Communicate? Senate Assembly How Will The Reduction Strategies Evolve? Who Will Have The Most Leverage Governor Legislature Others? What Are The Right/Final Numbers Must Take Current Ones At Face Value! Timeline Disconnect We Must Act Sooner Than Sacramento! 16

17 Conclusions Take-Aways Our District Is Confronted By Major Financial Hurdles In Developing The Budget The State s Fiscal Crisis Complicates/Exacerbates Our Predicament The Budgetary Shortfalls And Impacts Are Multi-Year Potential $400M Mid-Year Cut $4.4B Reduction Apply 4.94% COLA Offset With 7% Deficit Factor Our Initial Estimate Calls For $70M in Cuts THIS IS THE FIRST, NOT LAST NUMBER! Staff Must Take Near-Term Actions Independent Of The State Prepare 2 nd Interim Projection Develop Cut Proposals Consider Employee Notices We Should Proceed With Open-Ended Discussions Of Options At Board Workshops This Is An Iterative Process Discuss Refine Review Approve The Budget Crisis Is Sweeping In Scope Cannot Isolate It! Negatively Impacts Central Office, Schools, Services, Staff, Students, Neighborhoods All Stakeholders Must Collaborate Be Flexible Focus On The Greater Good! 17