2006 – 2007 Budget Outline Keeping the promise by adjusting and aligning our budget

We must align what we do with what we promised. That will take some budget adjustments.

Budget Objectives Slow the pace of current spending Slow the pace of current spending Equalize spending among schools Equalize spending among schools Align budget with goals and priorities Align budget with goals and priorities Frugal spending, healthy reserves Frugal spending, healthy reserves

Prevailing Factors Slower growth means fewer dollars Slower growth means fewer dollars Move staff to where the students are Move staff to where the students are Commitments to improve achievement Commitments to improve achievement Increases in insurance, retirement, fuel, etc. Increases in insurance, retirement, fuel, etc. Providing competitive salaries Providing competitive salaries Promises to taxpayers for frugal spending Promises to taxpayers for frugal spending

I. Growth and Staffing Factors Growth has slowed significantly Growth has slowed significantly The percentage of students on Free and Reduced Lunch has declined The percentage of students on Free and Reduced Lunch has declined Class size averages are below the state requirements Class size averages are below the state requirements Budget Adjustment

II. Employee Factors Employee benefit costs will increase significantly Employee benefit costs will increase significantly Salaries will reflect the longer school day Salaries will reflect the longer school day Supplements and longevity will increase Supplements and longevity will increase Competitive salaries MUST be maintained. Competitive salaries MUST be maintained. Staffing ratios are not aligned with current enrollment Staffing ratios are not aligned with current enrollment Budget Adjustment

III. Other Factors Property insurance rates going up Property insurance rates going up Utility costs and fuel costs going up Utility costs and fuel costs going up Reserve balance must stabilize within the Board adopted range Reserve balance must stabilize within the Board adopted range Budget Adjustment

Data-Driven Decision-Making

Declining Growth in Student Enrollment ,49937,04838,02639,51941,15841,61942, Declining growth in enrollment will reduce state funding $12-$15M

Title I Appropriations F/R Percentage 36.57%33.09% # Schools Served 1210 # of teachers funded 7162

Staffing: Core Courses K Target LOW HIGH We must adjust the current variations of class size to reflect Class Size Amendment requirements.

Class Size Amendment

Estimated Cost of Increases in Health Insurance Increase $3.3 million Retirement Contribution Increase $6.1 million Increase in Supplement Cost $0.7 million Negotiated Steps Increase $2.3 million Salary Increase with longer student day $4.9 million $4.9 million Salary Competitiveness 0 - $12.5 million TOTAL $ $ 29.8 Million

Other Estimated Increases Property Insurance Increase $0.7 million Utility and Fuel Increases $5.2 million Stabilize Fund Balance $19 million Operational Cost to open School “H” $0.8 million

6-Year Trend of Appropriations M250M289M331M Including $5M Fund Reserve 376M Including $19M Fund Reserve 394M % Inc Per Pupil $6363$6624$7314$8042$8977$9381

Fund Reserve We must stabilize our fund reserve at approximately 7.5% each year. Target 7.5%

Our budget will grow from $376 to $394 million 4.8% increase in actual dollars 4.8% increase in actual dollars Per Pupil increase from $8,977 to $9,381 Per Pupil increase from $8,977 to $9,381 Adjustments, not cuts

06-07 Referendum Dollars Continue 2002 Commitments $34.5 million Thirty minute longer student instructional day $8.3 million (teachers’ salaries) Professional development for teachers $3.5 million (teachers’ salaries) Fund Reserve $2 million Technology $1.5 million NeXt Generation High Schools $2 million Increased teacher salaries Reduced class size Reading Coaches and remedial teachers Reduced the dropout rate Increased honors and enrichment courses Restored budget cuts Hired Guidance Counselors Enhanced music and art programs Open a school for at-risk students Security Aides Referendum Commitments

Growth: Schools & Departments During the past five years, school personnel have increased at a rate slightly greater than departments. # Personnel in Schools # the Landings # Personnel in Trans., Facilities Serv., Telecom, Construction & Materials Increase in staff % Increase 36.5%24%28% % of total employees 76 % (up) 5% (same) 5% (same) 19% (down)

Question: Question: Did NeXt Generation Learning cause these budget adjustments? No. Most increases were used for teacher salaries and benefits (professional development 30 hours and extended day) Most increases were used for teacher salaries and benefits (professional development 30 hours and extended day) Professional development is building capacity & the key to improving student achievement. Professional development is building capacity & the key to improving student achievement.

Non-salary parts of NeXt Generation Learning account for less than 1% of the total budget Total Appropriations $377,617,300 NeXt Generation Non-Salary Items $ 2,700,496 Planning Tool, PBD, Phoenix Supp, High School Reform, Excellence, Connect Ed, Facilities Condition Assessment, Raptor

Positions reduced, not dollars Staffing Adjustments Some schools will reduce staff while salaries go up Some schools will reduce staff while salaries go up Some schools will add staff Some schools will add staff All schools will comply with Class Size Amendment All schools will comply with Class Size Amendment Positions adjusted 4% while budget increases 4.8% Positions adjusted 4% while budget increases 4.8% Schools, departments will make recommendations in MaySchools, departments will make recommendations in May We’ll still need teachers district-wideWe’ll still need teachers district-wide

Conclusions We will slow the pace of current spending We will slow the pace of current spending We will equalize spending among schools We will equalize spending among schools We will align budget with goals, priorities, and projected enrollment We will align budget with goals, priorities, and projected enrollment We will spend frugally and maintain healthy reserves We will spend frugally and maintain healthy reserves