Presentation is loading. Please wait.

Presentation is loading. Please wait.

ESCONDIDO UNION SCHOOL DISTRICT GOVERNOR’S BUDGET PROPOSAL AND IMPACTS ON EUSD FEBRUARY 11, 2010.

Similar presentations


Presentation on theme: "ESCONDIDO UNION SCHOOL DISTRICT GOVERNOR’S BUDGET PROPOSAL AND IMPACTS ON EUSD FEBRUARY 11, 2010."— Presentation transcript:

1 ESCONDIDO UNION SCHOOL DISTRICT GOVERNOR’S BUDGET PROPOSAL AND IMPACTS ON EUSD FEBRUARY 11, 2010

2 U.S. ECONOMIC OUTLOOK THE RATE OF JOB LOSS HAS SLOWED SINCE THE RECESSION BEGAN, THE U.S. HAS LOST 7.6 MILLION JOBS IN MANY STATES, HOME SALES HAVE BOTTOMED OUT, AND ARE ON THE RISE CONSUMER SPENDING WAS UP 2.8% IN THE THIRD QUARTER OF 2009 – AND GDP WAS UP 2.2 % THE STOCK MARKET HAS RECOVERED ABOUT 60% FROM ITS MARCH 2009 LOW

3 U.S. ECONOMIC OUTLOOK Source: U.S. Bureau of Economic Analysis, November and December 2009

4 THE ECONOMIC CRISIS IS NOT OVER IN CALIFORNIA AND WILL BE THE TOUGHEST YEARS OF THE RECESSION UNEMPLOYMENT WILL BE KEY, AND IT REMAINS HIGH – 12.4% IN CALIFORNIA COMPARED TO THE NATIONAL AVERAGE OF ABOUT 10.0% THE RECOVERY WILL BE SLOW – IT WILL TAKE SEVERAL YEARS TO ATTAIN LEVELS OF FUNDING AGAIN

5 Employment Trends – December 2007 to November 2009 Metropolitan Areas Source: California Employment Development Department Government Financial Service Leisure & Hospitality Industrial Sectors (Jobs in Thousands) Manufacturing Construction

6 RECOVERY TAKES A LONG TIME Recession Recovery Forecast

7 THE ECONOMIC CRISIS IS NOT OVER IN CALIFORNIA WHILE A RECOVERY IS IN SIGHT, STATE REVENUES HAVE CONTINUED TO CONTRACT INCOME AND SALES TAX COLLECTIONS LAG IN A RECOVERY – DOWNWARD PRESSURE ON PROPERTY TAXES TOO REAL ESTATE, CONSTRUCTION, AND TOURISM ARE ALL DOWN SIGNIFICANTLY IN DECEMBER 2009, CALIFORNIA LOST 38,800 JOBS, OR 46% OF THE 85,000 JOBS LOST ACROSS THE COUNTRY FEDERAL FUNDS WON’T BE AVAILABLE FOR A LARGE BAILOUT SUCH AS RECEIVED IN 2009

8 THE STATE BUDGET CALIFORNIA’S MOST RECENT BUDGET GAP IS ABOUT 19.9 BILLION – OVER EIGHTEEN MONTHS- $6.9 ATTRIBUTED TO , AND $12.3 PROJECTED FOR THE GOVERNOR AGAIN PROPOSES A COMBINATION OF BUDGET SOLUTIONS – FUNDING SHIFTS, SPENDING CUTS, AND FEDERAL BACKFILL CALIFORNIA RECEIVES 78 CENTS PER 1 DOLLAR OF FEDERAL TAXES PAID – A “FAIRNESS ISSUE” EVERY SEGMENT OF GOVERNMENT IS SEVERELY AFFECTED

9 THE STATE BUDGET GAP THE LEGISLATIVE ANALYST’S OFFICE (LAO) STATES THAT THE BUDGET PROBLEM IS LARGELY DUE TO 2009 BUDGET SOLUTIONS THAT FAILED TO MATERIALIZE: $2.4 BILLION – COURT DECISION THAT DENIED USE OF EXCESS GASOLINE TAXES AND TRANSPORTATION ACCOUNT FUNDS $1.1 BILLION – FEDERAL DEPARTMENT OF CORRECTIONS RECEIVER NOT BUDGETED FOR $972 MILLION – NO DEPT. CORRECTIONS SAVINGS $1 BILLION – NO SALE OF STATE COMPENSATION INSURANCE FUND $1.1 BILLION IN FEDERAL FLEXIBILITY FOR MEDI- CAL DID NOT OCCUR

10 THE STATE BUDGET GAP

11 THE GOVERNOR PROPOSES SHIFTING FUNDING SOURCES FOR VARIOUS PROGRAMS – REVISITING PROPOSALS SIMILAR TO THOSE ALREADY REJECTED BY VOTERS IN MAY PROPOSES TO USED $1 BILLION OF COMBINED FUNDS FROM PROPOSITION 10 (EARLY CHILDHOOD DEVELOPMENT), AND PROPOSITION 63 (MENTAL HEALTH FUNDS) WOULD REQUIRE VOTER APPROVAL – SCHEDULED FOR JUNE 2010 ELECTION?

12 THE STATE BUDGET GAP THE GOVERNOR PROPOSES TO ELIMINATE THE SALES TAX ON GASOLINE, AND SUBSTITUTE IT WITH AN EXCISE TAX THAT WOULD NOT FLOW THROUGH THE STATE’S GENERAL FUND PROPOSED TO PROVIDE MORE FLEXIBILITY TO TRANSPORTATION FUNDING – AND WOULD SAVE STATE MONEY ON ROADS NEGATIVELY AFFECTS THE FUNDING BASE UPON WHICH PROPOSITION 98 IS CALCULATED

13 THE STATE BUDGET GAP HEALTH AND HUMAN SERVICES PROGRAMS ARE HIT VERY HARD $2.4 BILLION WITH FEDERAL MONEY – MUCH HIGHER WITHOUT FEDERAL AID STATE EMPLOYEE REDUCTIONS - $1.6 BILLION – INCLUDES SALARY ROLLBACKS AND HIGHER EMPLOYEE RETIREMENT CONTRIBUIONS DEPARTMENT OF CORRECTIONS - $1.2 BILLION PROPOSITION 98 - $2.4 BILLION - $.9 BILLION IN SWEEPS, AND $1.5 BILLION IN REDUCTIONS

14 THE STATE BUDGET GAP THE GOVERNOR IS CALLING ON THE FEDERAL GOVERNMENT TO INCREASE FEDERAL REIMBURSEMENTS TO CALIFORNIA BY $6.9 BILLION – MAJOR RISK TO THIS BUDGET PLAN! IF THIS DOESN’T HAPPEN A CONTINGENCY PLAN WILL BE TRIGGERED: ADDITIONAL CUTS TO HEALTH AND HUMAN SERVICES PROGRAMS – CALWORKS, MEDI- CAL ADDITIONAL REVENUES - WOULD POSTPONE SOME BUSINESS TAX CREDITS AND EXTEND REDUCTION OF DEPENDENT CARE CREDIT

15 THE EDUCATION BUDGET JUST HOW PROTECTED ARE WE?

16 THE EDUCATION BUDGET THE GOVERNOR HAS MADE A POINT TO “PROTECT EDUCATION” – AND HE HAS TO THE EXTENT THAT: NO DISTRICT-LEVEL MID-YEAR CUTS FOR NO PROPOSITION 98 SUSPENSION (NONE NEEDED) UNLIKE , WHEN EDUCATION TOOK MORE THAN ITS PROPORTIONATE SHARE OF THE REDUCTIONS, IN , THE PROPOSED CUTS ARE LESS THAN OUR PROPORTIONATE SHARE

17 THE EDUCATION BUDGET BECAUSE THIS WILL AGAIN BE A “TEST 1” YEAR (41.2%) FOR CALCULATING THE PROPOSITION 98 GUARANTEE, NO MAINTENANCE FACTOR IS ASSUMED BY THE ADMINISTRATION $11.2 BILLION IN MAINTENANCE FACTOR (FOR AND ) WAS NEGOTIATED DURING LAST YEAR’S BUDGET PROCESS AND WILL BE REPAID “SOMEDAY” REPAYMENT DELAYED UNTIL ? $1.3 BILLION COUNTED AGAINST FUNDING RECEIVED IN , WIPES OUT ADDITIONAL MAINTENANCE FACTOR

18 THE EDUCATION BUDGET FLAT FUNDING UNDER PROPOSITION 98 – AFTER DROPPING MORE THAN 14% SINCE , PROPOSITION 98 FUNDING HAS STABILIZED BUT, THE MINIMUM GUARANTEE IS NOT ENOUGH TO RESTORE THE “ONE TIME” REDUCTION OF $1.5 BILLION ($252.83/STUDENT) INSTEAD, REVENUE LIMITS WILL BE SUBJECT TO AN ONGOING REDUCTION OF $1.5 BILLION, STARTING IN

19 PROPOSITION

20 THE EDUCATION BUDGET THE GOVERNOR’ $1.5 BILLION DECREASE TO PROPOSITION 98 IS TARGETED TO DISTRICT AND COUNTY OFFICE NONINSTRUCTIONAL, OR ADMINISTRATIVE COSTS $1.2 BILLION TARGETED AT SCHOOL DISTRICT ADMINISTRATION $300 MILLION WOULD BE ATTRIBUTABLE TO ELIMINATING BARRIERS TO CONTRACTING OUT FOR SERVICES WOULD APPLY TO ALL ENTITIES, REGARDLESS OF THE REDUCTIONS ALREADY MADE IN THE PAST FEW YEARS – BASE YEAR ?

21 EDUCATION BUDGET THE GOVERNOR PROPOSES TO MAKE SEVERAL CHANGES TO PERSONNEL LAWS RELATED TO CERTIFICATED EMPLOYEES: ADMINISTRATION PROPOSES ELIMINATING THE MARCH 15 LAYOFF NOTIFICATION DATE – AND CHANGING IT TO 60 DAYS AFTER THE STATE BUDGET IS ADOPTED OR REVISED PROPOSES TO CHANGE THE SENIORITY RULES – LAYOFF, REHIRE, AND ASSIGN BASED ON NEED, SKILLS, RATHER THAN SENIORITY CHANGE WOULD NOT SUPERSEDE COLLECTIVE BARGAINING AGREEMENTS IN PLACE

22 EDUCATION BUDGET CURRENT EDUCATION CODE PROVIDES REHIRE AND SUBSTITUTE RIGHTS TO LAID OFF TEACHERS UNDER SOME CIRCUMSTANCES, LAID OFF TEACHERS GET PRIORITY FOR SUB POSITIONS, AND RECEIVE PER DIEM RATE OF PAY GOVERNOR PROPOSES TO ELIMINATE THESE REGULATIONS – THOUGH IT’S NOT CLEAR IF THAT MEANS ELIMINATING JUST THE RIGHT TO PER DIEM PAY, OR IF IT INCLUDES THE PRIORITY FOR SUBSTITUTE JOBS TOO!

23 THE EDUCATION BUDGET- REVENUE LIMITS SMALL NEGATIVE COST-OF-LIVING ADJUSTMENT (-.38%, OR ABOUT -$23/ADA) – DROP OF ABOUT $200 MILLION STATEWIDE HIGH DEFICIT FACTOR OF % STILL APPLIES THE ONGOING $1.5 BILLION CUT WILL TRANSLATE TO ANOTHER REVENUE LIMIT REDUCTION – ABOUT $191/ADA FOR ELEMENTARY DISTRICTS THE DISTRICT IS ANTICIPATING CONTINUED DECLINING ENROLLMENT

24 Revenue Limit Deficit Factors

25

26

27

28 THE EDUCATION BUDGET NO NEW PROGRAMS CATEGORICAL FLEXIBILITY CONTINUES STILL ALLOWS FOR A REDUCTION IN SCHOOL YEAR BY FIVE DAYS FUNDING FOR ROUTINE MAINTENANCE MAY STILL BE REDUCED – BUT YOU MUST MAINTAIN CLEAN AND SAFE FACILITIES DEFERRED MAINTENANCE IS FLEXIBLE QUALITY EDUCATION INVESTMENT ACT (QEIA) PROGRAM IS ONGOING (YR 4)

29 CATEGORICAL PROGRAMS CATEGORICAL PROGAMS WILL BE REDUCED BY THE –038% COLA CLASS SIZE REDUCTION FLEXIBILITY AND REDUCED PENALTIES REMAIN IN PLACE NO NEW CATEGORICAL PROGRAMS ARE PROPOSED FLAT LOTTERY FUNDING IS PROJECTED $110/ADA FOR UNRESTRICTED LOTTERY $13/ADA FOR RESTRICTED, PROP 20 LOTTERY

30 SPECIAL EDUCATION SPECIAL EDUCATION WILL ALSO TAKE THE NEGATIVE COLA “HIT” OF -.38% FEDERAL ONGOING SPECIAL EDUCATION IS DUE TO LOSE $1.1 BILLION – GOVERNOR TRYING TO GET RESTORED $634 MILLION ONE-TIME ARRA MONEY IS GONE THE SE BEHAVIOR INTERVENTION PLANS (BIP) MANDATE SETTLEMENT – GOVERNOR ATTEMPTING TO SETTLE – WOULD ADD $10.92/ADA TO SE FUNDING BASE – REQUIRES LEGISLATIVE ACTION

31 MANDATES AT THE END OF , THE “MANDATE CREDIT CARD” WAS $1 BILLION RECENT COURT RULING DETERMINED DEFERRAL OF MANDATE REIMBURSEMENTS TO SCHOOLS IS UNCONSTITUTIONAL DUE TO THIS RULING, THE ADMINISTRATION PROPOSES ALL BUT THREE MANDATES BE SUSPENDED LAO HAS RECOMMENDED A COMPLETE OVERHAUL OF THE STATE’S MANDATE SYSTEM, AND REPEAL OF ALL BUT THE MOST CRITICAL MANDATES

32 FEDERAL MAINTENANCE OF EFFORT (MOE) AS A CONDITION OF RECEIVING (ARRA) FEDERAL STIMULUS MONIES, THE STATE AGREED TO HOLD K-16 FUNDING LEVELS AT LEVELS, BUT: THE ADMINISTRATION HAS REVISED THE STATE’S APPLICATION THAT WILL ALLOW REDUCTIONS TAKEN IN AND TO MEET MOE REQUIREMENTS BASED ON CURRENT MOE REQUIRMENTS, THE BUDGET FAILS THE TEST BY $540 MILLION – BUT, STATE IS CONFIDENT IT CAN GET REQUIREMENTS WAIVED

33 FEDERAL FUNDING GOVERNOR’S BUDGET INCLUDES ONLY FEDERAL BASE GRANTS – MOST PROGRAMS AT 2009 FUNDING LEVELS PENDING BILL HR 3288 INCLUDES FUNDING FOR PRESIDENT’S NEW INITIATIVES – CALIFORNIA’S SHARE NOT BUILT INTO THE BUDGET PROPOSAL: $400 MILLION FOR TEACHER INCENTIVES $250 MILLION FOR NEW STRUGGLING STUDENT LITERACY INITIATIVE $40 MILLION TO SUPPORT NEW CHARTER SCHOOLS

34 FEDERAL FUNDING ALL FEDERAL STIMULUS MONIES RECEIVED BY THE STATE HAVE BEEN DISTRIBUTED EXCEPTION IS THE POTENTIAL FOR ANOTHER SMALL DISTRIBUTION OF STATE FISCAL STABILIZATION (SFSF) FUNDING LATER IN AMOUNT WILL BE UNDER 10% OF WHAT WAS ALREADY RECEIVED – WE SHOULD EXPECT NO MORE THAN $600,000 REMAINING STIMULUS MONEY WILL BE IN THE FORM OF COMPETITIVE GRANTS – RACE TO THE TOP, SCHOOL IMPROVEMENT GRANTS, INVESTING IN INNOVATION

35

36 PRELIMINARY EUSD BUDGET REDUCTIONS BUDGET REDUCTIONS WILL BE NECESSARY IN EXHAUSTION OF ONE-TIME FEDERAL DOLLARS (FUNDING “CLIFF’) IS CRITICAL TO OUR CURRENT POSITION THE DISTRICT’S CONTINUED DECLINING ENROLLMENT MEANS THAT WE CAN NOT “GROW” OUR WAY OUT OF THE PROBLEM SINCE THE ECONOMY IS CLEARLY NOT RECOVERYING QUICKLY, WE NEED TO POSITION THE DISTRICT FOR A LONG HARD CLIMB BACK

37 PRELIMINARY EUSD BUDGET REDUCTIONS THE DISTRICT IS PROPOSING A PRELIMINARY REDUCTION AMOUNT OF ABOUT $13.5 MILLION GIVEN THE SIGNIFICANT RISKS TO THE BUDGET, THIS AMOUNT COULD GO HIGHER WHILE WE’RE HOPEFUL THIS WILL NOT BE THE CASE, WE ESTIMATE THAT A “WORST CASE” STATE SCENARIO COULD REQUIRE REDUCTIONS AS HIGH AS $17 MILLION

38

39

40

41


Download ppt "ESCONDIDO UNION SCHOOL DISTRICT GOVERNOR’S BUDGET PROPOSAL AND IMPACTS ON EUSD FEBRUARY 11, 2010."

Similar presentations


Ads by Google