1. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Proposed Operating Budget William R. Hite, Ed.D. Interim Superintendent of Schools

2. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Operating Budget Development Basis School System Vision All children of Prince George’s County Public Schools will graduate college-ready. School System Mission Will advance the achievement of its diverse student body through community engagement, sound policy governance, accountability, and fiscal responsibility. 1

3. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Operating Budget Development Basis School System Strategic Plan The Bridge to Excellence Master Plan, a dynamic strategic plan, guides the design and implementation of programs and services necessary to improve performance and achieve the mission. School System Five Core Beliefs: 1.Children ARE our business and THEY come first; 2.Parents are our partners; 3.Victory is in the classroom; 4.Continuous improvement in teaching, leadership and accountability is the key to our success; and 5.EVERY member of this community shares the responsibility for successful schools. 2

4. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Economic Outlook The next few slides will discuss some economic issues that the County and State will face in the upcoming fiscal year. 3

5. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Housing Market Outlook The County housing market has been continuously dropping in recent months. Monthly sales volume for existing homes dropped by 51% on average in FY08. In the first two months of FY09, it shows a further 32% drop. Sales prices for existing homes dropped by 9.1% on average in FY08. In the first two months of FY09, it shows a further 12% drop. Transfer and Recordation taxes decreased by $85 million (38%) in FY08 and are expected to drop by another $31 million (23%) in FY09. 4

6. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Real Estate Sales Chart –Prince Georges County Maryland 5

7. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Real Estate Price Chart –Prince Georges County Maryland 6

8. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org State of Maryland-Unemployment Rate Employment decreased by 12,757 during September 2008 and October 2008; thus the number of job seekers increased. The combined effect of these two trends was an increase in the average monthly unemployment rate from 4.6% for the month of September to 5% in the month of October. The national unemployment rate in October 2008 was 6.5%. Information provided by the Maryland Department of Labor 7

9. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Maryland Economic Forecast The economic slowdown has a substantial impact on the expectations for the individual income tax and the sales tax. Individual income tax receipts are expected to increase 5.3% in fiscal year 2009 to $7.310 billion, a decrease of $135.0 million. Growth of 5.3% in 2010, to $7.698 billion, is forecast. Estimated payments are forecast to grow in low single digits with the slow economy and very low growth in capital gains. The weaknesses in Maryland's economy appear likely to have the greatest impact on sales tax collections. General fund sales tax collections are forecast to grow 3.1% in fiscal year 2009 to $3.787 billion, a reduction in the forecast of $265.3 million. In fiscal year 2010, growth of 3.8% to $3.933 billion is expected. Baseline receipts are expected to drop 1.8% in 2009, but will increase by 4.8% in 2010. The recent increase from 5% to 6%, along with changes to the distribution of sales tax revenues, adds almost five percentage points of growth to general fund receipts for fiscal year 2009. 8

10. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Revenue Outlook Following the national economic downturn the State of Maryland Board of Revenue Estimates projecting a revenue shortfall of approximately $1.9 billion for FY10:  State potential reduction and rebase of formula grants. (Geographic Cost of Education Index-GCEI)  Reduction in State Aid resulting from State actions to reduce its $1.9 billion projected deficit.  Reduction in County revenue due to the strained housing market, including a steep rise in foreclosures and drop in housing sales decreasing the Transfer & Recordation Tax revenues.  Loss of telecommunication tax revenues. (Question F on the election ballot) 9

11. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Revenue Outlook (continued) County Revenue at MOE Includes GCEI funding @ 60% Underlying expenditure growth (compensation, fringe benefits, inflation) exceeds revenue rate of growth, resulting in a projected FY10 budget gap. 10

12. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Financial Charts The next few slides will display various financial charts relating to PGCPS (i.e. revenue and enrollment changes, expenditure changes, redirected resources, and improvements.) 11

13. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Revenue and Enrollment 12

14. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Expenditures and Enrollment 13

15. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Revenue and Expenditure Changes 14

16. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Proposed Operating Budget FY 2009FY 2010 ProposedChange Operating Budget$1,679,504,028 Approved $1,663,924,151 Estimated$1,675,090,910 ($4,413,118) $11,166,759 Student Enrollment (Pre-K - 12)129,595 (Actual)128,728 (Projected) (867) Projected Staff (FTE) Operating TOTAL 18,975.24 (Original) 18,988.24 (Revised) 18,119.71 18,119.71 (855.53) (868.53) Facilities208 0 15

17. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Revenue Change from FY 2009 Approved & Estimate SourceAmount Change Approved % ChangeAmount Change Estimate % Change State Aid$29,146,8781.03%$29,146,8781.03% Federal Aid $1,953,6071.02% $1,953,6071.02% Board Sources ($1,428,242)0.92% $151,6351.01% Country Contribution ($5,185,361)0.99% $8,814,6391.01% Prior Year Fund Balance ($28,900,000)(100.0%) ($28,900,000)(100.0%) Total Revenue Change ($4,413,118)(0.3%)$11,166,7591.01% 16

18. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Proposed Operating Revenue SourceAmount% of Total State Aid$951,855,15356.8% Federal Aid $96,347,3245.8% Board Sources $17,571,7581.0% County Contribution$609,316,67536.4% TOTAL REVENUE$1,675,090,910100.0% 17

19. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Major Expenditure Changes Major ChangesAmount Mandatory Changes (e.g., maintain existing workforce, fund employee benefits, risk management and utilities, and new schools) $70,800,192 Redirected Resources - (e.g., normal workforce turnover, removal of one-time expenditures, enrollment derived changes include staffing and supplies, and reductions in central and non-classroom support positions and supplies ) ($106,074,303) System Wide Improvements $30,860,933 Total Expenditure Major Changes ($4,413,118) 18

20. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Major Expenditure Changes Mandatory/Cost of Doing Business Mandatory Changes/Cost of Doing Business Staff FTE Amount (millions) FY 2009 Revisions After Budget Adoption - Additional Redirected Resources related to reduction of County Revenues - Additional Redirected Resources related to reduction of Board sources -Additional Instructional and Critical Support positions 13.00 ($14) ($1.6) Maintain Existing Work Force – Full-Time/Part-Time Salaries$58.7 Employer Obligations – (Social Security, Retirement, Risk Management, Life Insurance and Health Insurance) $20.2 Other Essential Support- (Utilities,, lease purchase, and Internal Services) $.8 Nonpublic Place$1.4 New Schools10.50 _______ $5.3 Total Mandatory/Cost of Doing Business Changes23.50$70.8 19

21. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 List of Improvements Description of ActivityFTEAmount Increase to support end of unit testing.$200,000 Textbook consumables.$5,603,467 Evaluation of FIRST GRANT. Increase in funding to support the matching funds required for the Pay for Performance Grant (improve quality of instruction- Implement Board of Education Theory of Action). $220,000 Fund 5 additional ESOL teachers in order to support the growing ESOL population and in order to provide teachers to all schools with ESOL students. 5$392,915 Full-time position is required for services to employees for compliance with the American Disabilities Act. ADA requests are rapidly increasing from year to year and an additional position is needed to oversee these tasks. 191,137 To provide for the relocation of the television studio to ISSC.$500,000 To provide for the expansion of close captioning requirements for the school system. $25,000 Increase in funding to support funds for a grant funded positions critical to the operation of the division. 1$53,426 20

22. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 List of Improvements (Continued) Description of ActivityFTEAmount Incremental increase$9,086,026 Lease Purchase of Textbook ($8.2 million)$1,803,804 Homeless Education Office Enhancement.$11,180 The expansion of the Autism initiative will help to increase the percentage of students, ages 6-21, who receive IEP services in Environments A and B. Specifically, to support the education of students identified with autism in their least restrictive environment. 27$1,537,467 Renovations to ISSC building.$1,000,000 Phase II of Energy Performance ($65 mill lease purchase).$6,590,119 Plant Operations Enhancement$2,000,000 Additional custodial positions to support RICA facility reopening4$246,452 Increase in funding to support the matching funds required for the Pay for Performance Grant (improve quality of instruction-Implement Board of Education Theory of Action). $1,500,000 Funds to support special education students who can not be serviced in a school setting. These funds will maintain current service levels and support 30 FTE(s) - new placements. $1,395,720 Total38$30,860,993 21

23. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Recommended Reductions Description of ActivityFTEAmount Salary Lapse / Work Force Turnover($15,308,560) Central Office and Program Reductions(189)($30,682,721) Benefits($654,441) Consolidation of 6 schools(75)($5,242,376) Reduction of Assistant Principals at small schools(23)($2,780,700) Instructional Coaches(25)($2,370,579) Staffing Formula Adjustment(200)($15,716,600) Prior Year Program Corrections - Paraprofessionals(44.50)(1,558,205) Parent and Community Engagement – Parent Liaisons(146)(7,704,795) Instructional Support(90)(9,726,210) Increase Student Teacher Staffing ratio Elementary(106.53)(8,371,447) School Operating Resources(2,977,065) America’s Choice – High Schools(18)(2,980,604) Total(917.03)($106,074,303) 22

24. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org FY 2010 Areas of Concern County Maintenance of Effort- Potential Waiver from MSDE. State revenue GCEI reduction. Teacher retirement fund. 23

25. PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS www.pgcps.org Public Hearings & Work Sessions Three Public Hearings  January 5, 2009 – Laurel HS, 7:00 p.m.  January 12, 2009 – Forestville Military Academy, 7:00 p.m.  January 15, 2009 – Oxon Hill HS, 7:00 p.m. Board of Education Budget Work Sessions, Sasscer Administration Building  January 27, 2009, 6:00 p.m.  February 2, 2009, 6:00 p.m.  February 9, 2009, 6:00 p.m.  February 18, 2009, 6:00 p.m. (Adoption date) 24