Budget Update

1
Budget Update

• August 17, 2009

2
Agenda

• State Budget
• Impact on Sweetwater
• Federal Stimulus
• Tier III Categorical
• Future Planning

3
Events That Led to Final State Budget

• January Governor unveils budget plan
• February Legislature approves 17-month budget
• April additional 21.3 billion gap
• May Voters reject ballot measures
• June Governors May Revise
• July Final Budget approved is it final?

4
State Budget for 2009-10

• 16.1 billion in program cuts
• 3.49 billion in revenue accelerations and fees
• 1.05 billion in fund shifts
• 2.18 billion in local government borrowing
• 1.35 billion one-time deferring state employee
  June payroll until July 1st

24.16 Billion in Solutions
5
State Budget

• Mid Year Cuts
• Many pieces of the state budget are accounting
  maneuvers
• What happens in California economy
• Significant Cash Deferrals
• More shifts in when districts receive cash
• Affects required Prop 98 funding

6
State Revenues
BILLIONS
20 Drop
8 Drop
7
State Budget Top Three

• Education takes biggest hit, 48 - 14.9 billion
• Higher Education including CCs in second place,
  10.97 - 3.4 billion
• Employee Compensation, 6.5 - 2.0 billion

8
State Budget - Education

• COLAs Unfunded
• 5.66 for 2008-09
• 4.25 for 2009-10
• Revenue Limits
• Final 2008-09 deficit 7.844
• 2009-10 deficit - 18.355

9
State Budget - Education

• How did the state deal with the shortfall in
  08-09?
• Recapture unallocated categorical
• Reallocate to district in 09-10
• One-time reduction to revenue limit in 09-10 of
  250 per ADA
• Maintenance Factor
• Provides that 11.2 billion will be restored to
  education

10
Revenue Limit COLAs
Projected by the US Department of Commerce
Projected COLA
Funded COLA
11
Impact on Sweetwater

• District already cut 11.5 million in adopted
  budget
• Revenue limit deficit results in additional 17.3
  million reduction on going
• One time reduction to revenue limit of 250 per
  ADA - 10.0 million
• Total reduction in 2009-10 - 38.8 million!

12
Base Revenue Limit Calculation
Statutory Revenue Limit
552 short
1,347 short
Funded Revenue Limit
Represents loss per ADA does not include 250
one-time
13
Closing out 2008-09

• Swept allowable categorical balances from 07-08
• Sweep balances in 08-09
• Both Adult and Food Service funds will be able to
  pay Indirect Costs (approx 1.0 million)
• Balance to come from the Reserves

14
Federal Stimulus

• IDEA Special Education 7,400,000
• 50 can be used for encroachment
• Title I 4,300,000
• Reduce Supp Counselors at Title I schools and
  replace with Title I (approx 1.3 million)
• Fiscal Stability 19,300,000
• 2nd Round of Fiscal Stability may be up to 5.0
  million

15
Tier III Categoricals

• Tier III categoricals have become unrestricted
  and can be used for any educational purpose
• Totals 13.7 million - 4.0 unallocated
• Allocated 1.0 million for Support to Schools
• Available to balance budget or use to advance
  instruction - 3.0 million

16
Balancing 2009-10

• Currently short 27.3 million
• Available to balance
• Title I Stimulus 1,275,000
• IDEA Stimulus 3,500,000
• Fiscal Stability 19,300,000
• Tier III Categoricals 2,900,000
• Savings from Summer School 4,000,000
• 30,975,000

17
Future Planning

• Save remaining Stimulus Funds for 2010-11
• Use of Tier III categoricals again
• Begin to look at On-Going Reductions until
  economy turns around
• Furlough Days
• Summer School
• Decisions regarding positions that become vacant
  (not certificated)
• Other potential reductions

18

• Questions