Budget Update

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Budget Update

• January 5th, 2009

2
Whats out there

• Three plans being floated
• Governors
• Democratic
• Republican
• Plans broken out by Revenues and Cuts

3
Data Sources

• Information for this presentation has been taken
  from Sacramento Bee articles from December
• Republicans, Democrats and Gov. Arnold
  Schwarzenegger now each have a plan to help
  reduce the state's roughly 40 billion deficit
  estimated between now and June 30, 2010.
  Estimates for Schwarzenegger's Nov. 6 plan have
  been updated to reflect later implementation
  dates.
• Other information has been taken from various
  news releases through the Ed Coalition

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Governors Plan Nov. 6th

• Revenues 13 Billion
• Cuts 9.3 Billion
• Total 22.3 Billion
• Projected budget shortfall - 40 Billion
• Governors plan short by - 17.7 Billion

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Governors Plan

• Revenue 13 billion
• 9.1 billion by raising the sales tax by 1.5
  cents on the dollar for three years.
• 1.4 billion by imposing sales taxes on some
  services and activities that currently aren't
  taxed, such as golf fees, amusement parks,
  sporting events, veterinary treatment, and
  vehicle repair.
• 1.2 billion by imposing a 9.9 percent per barrel
  tax on oil extracted from California.
• 829 million by raising the excise tax on alcohol
  by 5 cents a drink.
• 451 million by raising annual vehicle
  registration fees by 12 per vehicle.

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Governors Plan

• Cuts 9.3 billion
• 3.2 billion by cutting K-14 education.
• 1.4 billion by reducing monthly grants to the
  federal minimum for low-income aged, blind and
  disabled on Supplemental Security Income/State
  Supplemental Program.
• 1 billion by reducing welfare grants by 10
  percent, cutting benefits at 60 months for some
  recipients and requiring reviews every six
  months.
• 782.1 million by furloughing state employees one
  day a month and eliminating Columbus Day and
  Lincoln's Birthday as paid state holidays.

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Governors Plan

• Cuts 9.3 billion - continued
• 719.5 million to Medi-Cal by eliminating some
  treatment options, limiting benefits for some
  legal immigrants and raising the income
  eligibility requirements to pre-2000 levels.
• 608 million by eliminating parole supervision
  for all but those who have committed serious,
  violent or sexual crimes.
• 494 million by cutting transit grants.
• 311.3 million in cuts to in-home supportive
  services workers.
• 264 million in cuts from UC and CSU.

8
Governors Plan - Education

• Eliminates the 0.68 COLA
• Reduces revenue limits by 4.5 to 5
• Categorical fund flexibility

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Democratic Plan Nov. 25th

• Revenues 8.1 Billion
• Cuts 9 Billion
• Total 17.1 Billion
• Projected budget shortfall - 40 Billion
• Democrat plan short by - 22.9 Billion

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Democratic Plan

• Revenue 8.1 billion
• 5.7 billion by restoring the vehicle license fee
  to 2 percent of the vehicle's depreciated value.
• 2.4 billion through an income tax increase by
  freezing the 2008 brackets rather than letting
  them adjust with inflation.

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Democratic Plan

• Cuts and shifts 9 billion
• 4.5 billion cut to K-12 schools and community
  colleges.
• 657 million in savings by cutting state employee
  pay (details to be negotiated through collective
  bargaining)
• 132 million from UC and CSU.
• 656 million grant cuts to recipients of SSI/SSP
  program for low-income elderly, blind and
  disabled.
• Cut prisons 568 million

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Democratic Plan

• Cuts and shifts 9 billion - continued
• 100 million to cuts cost of living for CalWORKS.
• 750 million general fund cut for local law
  enforcement (although 510 million would be
  restored by using special funds).
• 112 million in cuts to regional centers for the
  developmentally disabled.
• 156 million in local transit funds.

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Democratic Plan - Education

• Eliminates the 0.68 COLA
• Categorical fund flexibility
• Reduces charter school block grant funding

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Democratic Plan - Education

• Reduces current year appropriations for various
  categorical programs by 1.8 Billion. Largest
  cuts include
• Instructional Materials 417 million
• Deferred Maintenance 277 million
• Professional Development 273 million
• School Library 230 million
• High Priority Schools 114 million
• Art and Music 109 million

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Republican Plan Dec. 15th

• Revenues 6.5 Billion
• Cuts 15.6 Billion
• Total 22.1 Billion
• Projected budget shortfall - 40 Billion
• Republican plan short by - 17.9 Billion

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Republican Plan

• Revenue 6.5 billion, including
• 2.1 billion by asking voters to redirect
  Proposition 10 funds approved for early childhood
  programs.
• 3.9 billion by asking voters to redirect
  Proposition 63 funds approved for mental health
  programs.
• 484 million through various fund transfers and
  loan payment delays.

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Republican Plan

• Cuts 15.6 billion
• 10.6 billion cut to K-12 schools and community
  colleges.
• 1.3 billion by reducing grants to recipients of
  SSI/SSP program for low-income elderly, blind and
  disabled.
• 1 billion by suspending cost-of-living increase
  for welfare recipients, cutting grants by 10
  percent and limiting eligibility.
• 802.5 million by furloughing state employees one
  day a month and eliminating Columbus Day and
  Lincoln's Birthday as paid state holidays.

18
Republican Plan

• Cuts 15.6 billion - continued
• 738 million in cuts to UC and CSU by cutting 10
  percent across the board, increasing
  student-faculty ratio and eliminating in-state
  tuition for undocumented immigrants.
• 716 million to Medi-Cal, including eliminating
  certain benefits, reducing eligibility and
  lowering hospital reimbursement rates.
• 459.6 million by eliminating funding for transit
  agencies.
• 269.5 million in cuts to In-Home Supportive
  Services program.

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Republican Plan

• Cuts 15.6 billion - continued
• 205 million cut to the judiciary.
• 57.4 million to prisons by expanding use of GPS
  for parolees.
• 26.2 million in cuts to the Legislature,
  including a 5 percent cut to legislators' pay.
• 85.5 million in cuts to regional centers for the
  developmentally disabled.

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Republican Plan - Education

• 2.8 Billion this current year
• Reduces revenue limits
• Reduces deferred maintenance
• 7.85 Billion 09/10
• Further reduces revenue limits
• Reduces after school programs
• Categorical flexibility

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Interesting to note

• Finally, here's some sobering budget math If
  you took every cut Republicans proposed (from
  eliminating transit funds to cutting payments for
  the aged, blind and disabled to 10.6 billion
  from schools) and added it to every tax the
  Democrats propose to raise (tripling the car tax
  and suspending the indexing of tax rates), you'd
  still only solve 23.7 billion of the nearly 40
  billion deficit.
• (From Sacramento Bee, December 16th )

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How might this affect us?

• No way of knowing how the cuts will be assessed
  (which programs, funds, revenue limits, etc.)
• VERY rough guesstimation is to look at a per
  student cost to California
• Estimate 6.2 million K-12 students in CA
• Estimate RBJUHSD ADA of 1850
• Not too accurate, but allows a sense of scale

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Plan comparision impact

• Governors plan
• 3.2 Billion 516 / student
• About 0.95 million to RBJUHSD 4.8 cut
• Democratic plan
• 4.5 Billion 726 / student
• About 1.4 million to RBJUHSD 7 cut
• Republican plan
• 10.6 Billion 1710 / student
• About 3.2 million to RBJUHSD 16 cut

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Next?

• Governor will release his new plan on January 9th
  addressing the nearly 40 billion budget
  shortfall
• Legislature will need to act quickly, but hasnt
  shown any willingness to do that so far
• Keep in mind, all these cuts are in addition to
  loss of revenue due to declining enrollment

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What we are prepared to do . . .

• Use MAA funds to cover costs of certificated
  retiree salaries and benefits for those who
  notify us by January 15, 2009, that they will be
  retiring by June, 2011. Potential savings to our
  on-going costs is unknown, but a conservative
  estimate is 200,000, or 1.05 of our total
  budget.

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What we are prepared to do . . .

• Reduce personnel costs via staff reductions,
  retirements, and reassignments by 680,000, which
  equates to 3.62 of our total budget
• List other possible cuts and the potential
  savings
• Continue to use the Joint Working Committee to
  facilitate this process

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• Questions?