1. Budget Crisis 08-09

2. Planned on $104 billion Current estimate is $8 - $15 billion less Equals a 7 to 14% shortfall Caused by major economic downturn, poor fiscal management and legislative neglect Planned on $104 billion Current estimate is $8 - $15 billion less Equals a 7 to 14% shortfall Caused by major economic downturn, poor fiscal management and legislative neglect Problem #1- State Revenues

3. State Revenue Indicators Unemployment 2006 4.9%; 2007 5.9% and in 2008 7.7% Foreclosures 2007 11,033; 2008 47,171 Home Building down 56.2% Tax revenues down $1 billion in last 3 months and expect to further decline Unemployment 2006 4.9%; 2007 5.9% and in 2008 7.7% Foreclosures 2007 11,033; 2008 47,171 Home Building down 56.2% Tax revenues down $1 billion in last 3 months and expect to further decline

7. Impact of Problem #1 Governor is recalling Legislature Expectation: Increase sales tax Mid year cuts = $320 to $640 per student Equals $10 - $20 million cut to SVUSD Governor is recalling Legislature Expectation: Increase sales tax Mid year cuts = $320 to $640 per student Equals $10 - $20 million cut to SVUSD

8. Problem #2 - 2009-10 COLA Originally budgeted at 5.6% Now planning on 0% Equals a $7.7 million revenue cut In addition to $5 million in cuts already planned for 2009-10 Means cutting $12.5 million in addition to any mid- year cuts Originally budgeted at 5.6% Now planning on 0% Equals a $7.7 million revenue cut In addition to $5 million in cuts already planned for 2009-10 Means cutting $12.5 million in addition to any mid- year cuts

9. What will we do to address these problems? Reduce salary obligations through Early Retirement Plan ???? Seeking a waiver from SBE to use Categorical carryover for unrestricted purposes ???? Inform Bargaining Units Form Budget Reduction Committee Reduce salary obligations through Early Retirement Plan ???? Seeking a waiver from SBE to use Categorical carryover for unrestricted purposes ???? Inform Bargaining Units Form Budget Reduction Committee

10. Addressing the problems - continued Educate our parents and community about what we are faced with Ultimately, without relief, we will be forced to eliminate all non-essential programs... Educate our parents and community about what we are faced with Ultimately, without relief, we will be forced to eliminate all non-essential programs...