UPDATE Department of Education s budget background and process for the 2017-2019 Fiscal Biennium BOARD OF EDUCATION Finance and Infrastructure Committee August 16, 2016 Education breeds confidence. Confidence breeds hope. Hope breeds peace. Confucius HawaiiPublicSchools.org OFS 1
FY17 General Fund Appropriations: $7B University of Hawaii, 433,580,935, 6.2% Public Safety, 250,146,623, 3.6% Thirteen Smaller Depts, 213,015,528, 3.0% Accounting and General Services, 105,185,479, 1.5% Agriculture 15,316,858 Attorney General 31,716,325 Business, Econ. Dev. & Tourism 13,543,802 Defense 21,139,755 Hawaii Health System Corp, 107,440,000, 1.5% Human Services, 1,220,287,153, 17.3% Health, 463,510,089, 6.6% Education, 1,567,678,982, 22.3% Budget and Finance, 2,566,132,529, 36.5% (includes debt service & fringe costs for all depts.) TOTAL of 13 Smaller Depts EDN - Charter Schools, 75,933,916, 1.1% EDN - Public Libraries, 33,661,055, 0.5% 2 Governor 3,816,705 Hawaiian Home Lands Human Resources Development Labor & Industrial Relations Land & Natural Resources 23,925,340 17,476,205 18,745,118 34,566,698 Lt. Governor 1,081,703 Subsidies to Counties 2,500,000 Taxation 27,687,019 Transportation 1,500,000 213,015,528 2
FY17 All Means of Finance: $13.7B Labor & Industrial Relations, 472,627,929, 3.4% Human Services, 3,304,666,056, 24.1% Hawaii Health System Corp, 677,519,754, 4.9% Public Safety, 272,731,954, 2.0% Health, 1,025,266,690, 7.5% Transportation, 970,496,250, 7.1% Education, 1,934,307,482, 14.1% University of Hawaii, 1,123,058,394, 8.2% Budget and Finance, 2,619,248,478, 19.1% (includes debt service & fringe costs for all depts.) Thirteen Smallest Depts, 727,062,604, 5.3% Business, Econ. Dev. & Tourism, 344,855,259, 2.5% Accounting and General Services, 230,448,715, 1.7% Agriculture 51,593,696 Attorney General 95,922,803 Commerce & Consumer Affairs 78,584,094 Defense 134,396,901 EDN - Charter Schools 77,938,466 EDN - Public Libraries 39,026,299 Governor 3,816,705 Hawaiian Home Lands 61,552,735 Human Resources Development 23,237,486 Land & Natural Resources 128,655,600 Lt. Governor 1,081,703 Subsidies to Counties 2,500,000 Taxation 28,756,116 TOTAL: 13 Smaller Depts 727,062,604 HawaiiPublicSchools.org OFS 3 3
General Fund Appropriations by EDN EDN Title / Function 100 School Based Budgeting 150 Special Education 200 Instructional Support 300 State Administration 400 School Support 500 School Community Services 700 Early Learning EDN FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-12 100 774,244,048 772,086,697 753,950,947 705,214,266 775,148,488 150 361,156,533 355,373,685 368,188,673 306,635,452 322,144,665 200 34,454,113 33,297,750 29,037,169 21,956,188 45,745,674 300 50,381,509 55,557,715 51,432,190 42,924,189 43,344,985 400 170,290,488 169,455,447 184,814,106 171,841,402 174,109,976 500 11,035,725 8,792,776 8,674,528 4,861,955 5,072,889 700 TOTAL 1,401,562,416 1,394,564,070 1,396,097,613 1,253,433,452 1,365,566,677 EDN FY2012-13 FY2013-14 FY2014-15 FY2015-16 FY2016-17 100 772,510,601 817,507,508 812,888,595 880,317,495 919,739,606 150 313,456,272 321,843,969 325,508,663 351,492,656 357,369,736 200 43,767,584 45,120,095 47,429,820 50,586,338 52,202,121 300 41,945,114 42,276,161 43,343,959 46,984,179 48,599,682 400 173,929,086 170,665,305 171,218,522 195,206,685 183,909,690 500 2,500,000 2,500,000 2,500,000 2,992,223 2,862,275 700 3,255,152 3,076,182 2,995,872 TOTAL 1,348,108,657 1,399,913,038 1,406,144,711 1,530,655,758 1,567,678,982 4 4
Historic EDN funding levels: General Fund 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000-100 150 400 200 & 300 500 700 EDN Title / Function 100 School Based Budgeting 150 Special Education 200 Instructional Support 300 State Administration 400 School Support 500 School Community Services 700 Early Learning 5 5
HIDOE Appropriations: All types & levels 81% 14% 4% 1% General funds: Used to authorize the expenditure of State tax revenues not specifically set aside by law for a special purpose. Primary sources are the State income tax and general excise tax. Federal funds: Used to authorize the Department to expend revenues from the federal government received by the Department for a variety of specific purposes. Examples include the Individuals with Disabilities Education Improvement Act (IDEA) or USDA National School Lunch Program. Special funds: Used to authorize the expenditure of revenues collected by HIDOE for purposes identified in State law (includes Revolving & Interdepartmental Transfer Funds). Example: The School Food Services Special Fund into which school lunch receipts are deposited to be used by the School Food Services program. Trust funds: used to authorize the expenditure of revenues received by schools or offices that are designated for specific persons or classes of persons who have a vested beneficial interest in the use of the funds. Example include Donations & Gifts Trust Fund. FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-12 General funds 1,401,562,416 1,394,564,070 1,396,097,613 1,253,433,452 1,365,566,677 Federal funds (ceiling) 262,206,533 261,847,302 374,991,570 305,716,386 311,496,353 Special funds (ceiling) 64,659,825 67,782,450 75,406,544 79,055,420 88,045,223 Trust funds (ceiling) 6,300,000 13,750,000 13,750,000 13,716,215 32,990,000 Total All MOF 1,734,728,774 1,737,943,822 1,860,245,727 1,651,921,473 1,798,098,253 FY2012-13 FY2013-14 FY2014-15 FY2015-16 FY2016-17 General funds 1,348,108,657 1,399,913,038 1,367,369,920 1,530,655,758 1,567,678,982 Federal funds (ceiling) 284,547,256 259,250,749 250,994,824 258,012,049 265,034,049 Special funds (ceiling) 96,535,944 95,339,367 95,339,367 96,755,747 83,954,451 Trust funds (ceiling) 32,919,060 24,290,000 24,290,000 17,640,000 17,640,000 Total All MOF 1,762,110,917 1,778,793,154 1,737,994,111 1,903,063,554 1,934,307,482 6 6
Historic appropriation levels: All types 1,800,000,000 1,600,000,000 General Funds 1,400,000,000 1,200,000,000 1,000,000,000 800,000,000 600,000,000 400,000,000 Federal Funds 200,000,000 Special Funds - FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-12 FY2012-13 FY2013-14 FY2014-15 FY2015-16 FY2016-17 Trust Funds 7 7
Select Federal programs & awards ESEA Title I Part A Improving Basic Programs Operated by Local Educational Agencies ESEA Title II Improving Teacher Quality State Grants IDEA Individuals with Disabilities Act Impact Aid Title VIII of ESEA under NCLB & moved to Title VII under ESSA Program FY08 FY09 FY10 FY11 FY12 Title I 39,638,957 44,336,607 43,230,443 42,598,821 47,475,260 Title II 13,393,817 13,623,462 13,622,554 13,659,126 11,243,906 IDEA 38,429,941 38,919,867 40,659,422 40,623,704 40,480,793 Impact Aid 45,068,203 55,515,943 38,057,476 42,967,608 52,162,808 Program FY13 FY14 FY15 FY16 FY17 Title I 45,748,115 47,597,859 53,190,912 47,116,137 53,315,000 Title II 11,191,809 10,582,856 10,582,325 10,547,951 10,349,000 IDEA 40,833,044 38,610,911 40,150,801 40,227,772 41,556,000 Impact Aid 80,459,617 41,185,755 33,735,263 40,322,711 tbd HawaiiPublicSchools.org OFS 8
Historic federal awards: 4 major programs 90,000,000 80,000,000 70,000,000 Title I Title II IDEA Impact Aid % of Students with High Need(s) 70% 65% 60% 60,000,000 50,000,000 40,000,000 30,000,000 55% 50% 45% 20,000,000 40% 10,000,000 35% 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 30% HawaiiPublicSchools.org OFS 9
ALLOCATION Governor and B&F APPROPRIATION As of 8/14/16 Legislature ALLOCATION PLAN Budget Execution Governor and B&F School or Office BUDGET REQUESTS Board of Education START NEEDS CAS Program Manager Budget Lead PROPOSAL Deputy AS Budget Review Team Executive Leadership Group FB2017-19 budget process May: web-based budgeting tool released June: Set up budget process & timeline with Supt Leadership. July: Program Managers review & rebuild budgets, needs assessment Aug 12: Proposals due for current and new requests Aug-Sept: Summarize requests, evaluate & strengthen documentation for current service budgets Aug 15-22: New requests to be evaluated and justified Aug 19: Target date for issuance of B&F Biennium Budget Instructions Sept: Prepare presentation for BOE Review Sept 20 or Oct 4: FIC and BOE action on recommendations 10 10
Budget Process Overview DATE BUDGET ACTIVITY BOE UPDATE OR ACTION Late Spring Summer Department prepares its Budget Recommendation Late Summer Finance Director issues Budget Preparation Early Fall Instructions Updated on Budget Process Early-Mid Fall Board approved budget submitted to the Approves Department s Budget Department of Budget and Finance for approval Request November Governor makes final decisions on the DOE's budget requests Updated on Governor s decisions Late December Governor submits Executive Budget Request to the Legislature March House of Representatives draft their version of the budget Updated on House Draft April Senate draft their version of the budget Updated on Senate Draft Late April Early Late June July 1 Legislature finalizes the budget & appropriates funds Governor allots (releases) funds in increments based on revenue projections, and may restrict funding to departments Fiscal Year begins and HIDOE begins expending allotted funds Updated on Conference Draft Approved Department s Restriction Plan if one is necessary 11 11
Council on Revenues General Fund Tax Revenue Projections Hawaii Revised Statute 37-112 To ensure a balanced budget, the governor and legislature shall use the latest Council on Revenues (COR) estimates as their base estimate for general fund tax revenues for next six years. If the revenue estimate used by governor or legislature differs they shall make that fact public with the reasons for using the differing revenue estimate. Hawaii Revised Statute 37-111 The COR is established in the State Constitution and Hawaii Revised Statute ( 37-111) Made up of seven individuals 3 selected by the Governor, 2 selected by the Senate, 2 selected by the House. Reports its latest revenue forecast to the governor and the legislature on June 1, September 10, January 10, and March 15 of each year. HawaiiPublicSchools.org OFS 12 12
Council on Revenues Recent General Fund Tax Revenue Projections COR Meeting Date 09/03/15 01/07/16 03/10/16 05/24/16 Actual FY16 Collections (as of 6/30/16) 9/2/16 Next Scheduled Meeting (tentative) Used by: Governor to submit FY2016-17 Supplemental Budget Request House to prepare the House Draft of Supplemental Budget Senate to prepare the Senate Draft of the Supplemental Budget and the Conference Committee to negotiate final FY17 appropriations Considered by Governor in restricting or releasing FY17 Allocations Considered by Governor in releasing FY17 Allocations & setting the FB2017-19 Budget Instructions. Considered by Governor in releasing FY17 Allocation and making decisions on the FB2017-19 Budget FY16 % FY16$ FY17 % FY17$ 6.0% 6,079,249,000 5.5% 6,413,608,000 6.7% 6,119,395,000 5.5% 6,455,962,000 6.7% 6,119,395,000 5.0% 6,425,365,000 6.1% 6,084,985,000 5.0% 6,389,234,000 8.0% 8.0% 6,193,952,000 (est. of revenue announced by Exec) 6,193,952,000 (est. of revenue announced by Exec.) 5.0% tbd 6,503,650,000 (using latest COR %) tbd 13 13
General Fund Appropriation History $1,800 $1,600 20% $1,400 $100 $131 0% $1,200-20% (in millions) $1,000 $800 $600 $1,402 $1,395 $1,396 $1,253 $1,366 $1,348 $1,400 $1,403 $1,431 $1,436-40% -60% $400 $200-80% $- FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FB15-17 CB (pay raises) $100 $131 Appropriation $1,402 $1,395 $1,396 $1,253 $1,366 $1,348 $1,400 $1,403 $1,431 $1,436 IF Support Matched CPI 0.0% 0.5% 2.6% 6.4% 9.0% 11.0% 12.6% 13.7% 16.0% 18.5% DOE Enrollment 171,712 170,498 170,830 169,987 172,104 173,658 175,476 170,482 170,971 172,096-100% Source: CPI-Honolulu data from DBEDT, 2016 2nd Qtr Economic Outlook & FY17 enrollment is projected enrollment. 14
General Fund Appropriations from Executive Budget Bills, FY08-17 8,000,000,000 7,000,000,000 7,036,572,289 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 Total Appn in Executive Budget 5,273,531,614 Total GF Appn less All Fringe and Debt Service 3,711,226,110 4,528,068,573 2,000,000,000 Total GF Appn to DOE 1,567,678,982 1,000,000,000 1,401,562,416 - FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 15
CIP Categories Capacity: New Schools, Classroom Additions, Temporary Facilities, Repurposing existing facilities to create capacity Condition: Repair & Maintenance, Electrical/Technology Infrastructure, Hazardous Material Removal, Structural Improvements Program Support: Gender Equity, New Restrooms, ADA Compliance, Support Program Spaces, Playground Equipment Equity: Science Facilities, Special Education, Energy Improvement, Right-sizing of spaces, Physical Education, Noise Abatement Heat Abatement: Ventilation, Mechanical Cooling, Night Flushing, etc. HawaiiPublicSchools.org OFS 16
R&M backlog since 2001 800,000,000 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 - Jan- 01 Jun- 01 Nov- 01 Apr- 02 Sep- 02 Feb- 03 Jul- 03 Dec- 03 May- 04 Oct- 04 Mar- 05 Aug- 05 Jan- 06 Jun- 06 Nov- 06 Apr- 07 Sep- 07 Feb- 08 Jul- 08 Dec- 08 May- 09 Oct- 09 Mar- 10 Aug- 10 Jan- 11 Jun- 11 Nov- 11 Apr- 12 Sep- 12 Feb- 13 Jul- 13 Dec- 13 May- 14 Oct- 14 Mar- 15 Aug- 15 Jan- 16 Jun- 16 HawaiiPublicSchools.org OFS 17
CIP funding, appropriations $500,000,000 $450,000,000 $435,494,000 $400,000,000 $350,000,000 $314,193,000 $318,472,000 $337,624,000 $300,000,000 $250,000,000 $200,000,000 $241,331,000 $237,372,000 $287,908,000 $150,000,000 $149,536,000 $100,000,000 $131,112,000 $50,000,000 $0 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 HawaiiPublicSchools.org OFS 18
Questions? 19 19