Transcript Slide 1

UPLAND UNIFIED SCHOOL DISTRICT
Charting a Safe Course
During a State Fiscal Crisis
STATE AND FEDERAL
BUDGET UPDATES
Presented by
Gary Rutherford, Ed.D.
Superintendent
February 24, 2009
OVERVIEW AND DISCLAIMERS
 Following a long delay, the 2008-09 and 2009-10
state budget package finally came together
amidst a whirlwind of deal-making and political
drama
 Budget bill language has only recently become
available – our initial analysis is derived from
briefing with legislative staff, budget language
and analyses from state fiscal consultants
 The information contained in this report is
subject to further clarification as information
becomes available
THE STATE OF THINGS
 Even with a budget package finally in place, the state’s
financial condition remains critical. The structural
problems at the state level have not been addressed
($11 billion in borrowing, over-stated revenue
projections, depends on voter approval).
 Factors education leaders will continue to consider:
State’s credit rating is at junk bond status
State revenues are projected to continue dropping
through 2009 and into 2010
 K-Adult Education will experience historic mid-year
and budget year reductions
 If revenues continue to drop, additional 2009-10
reductions are possible
 We are monitoring cash flow status on a weekly basis
 We may have a clearer picture by May Revise


THE BUDGET “CORRECTION” PACKAGE
 Adopted budget is a two-year package:
 2008-09
mid-year K-Adult reductions and deferrals
 2009-10 reductions and deferrals
 Lowers the Prop 98 funding level in the current and
budget years
 Requires voter approval of five special election
proposals
 All must pass in order for the plan to hold together
 One includes future restoration of Prop 98
maintenance factor (Prop 1C)
 Special election scheduled for May 19, 2009
K-ADULT FUNDING: 2008-09
 Reduces current year Prop 98 funding by more
than $6 billion – via mix of reductions, deferrals
and re-designation of funds
 2008-09 funding cuts to K-12 = $1.9 billion
 Eliminates
the .68 COLA (no COLA for 2008-09)
 50% from revenue limits (about $160 per ADA)
 50% from a 15% ($944 million overall) acrossthe-board cut to specified categorical
programs
REVENUE LIMIT FUNDING: 2008-2009
Jan. 2009
2008-09
Feb. 2009
2008-09
$6,138
PROPOSED
ADOPTED
.68%COLA
$5,544
2007/08
LEVEL
4.56%CUT
2.63%CUT
$5,656
5.66%
COLA
$5,862
Nov. 2008
2008-09
Impact on UUSD: 2008-2009
Summary of Proposed State Cuts
 Elimination
of .68 COLA
 4.5% Additional Cut
SUBTOTAL
$429,000
$3,278,887
$3,707,887
Summary of Adopted State Cuts
 Elimination
of .68 COLA
 2.63% Additional Cut
SUBTOTAL
$429,000
$1,875,011
$2,304,011
K-ADULT FUNDING: 2009-10
 Eliminates $2.5 billion in Prop 98 funding from
5.02% COLA for school districts and county
offices – no COLA FOR 2009-10
 Additional $530 million reduction to Prop 98 base
due to revised 2008-09 base
 $265 million through cuts to base revenue limit
 $265 million through cuts to categorical
programs
 $114.2 million savings from elimination of the
High Priority School Grant Program
5.02%
COLA
5.66%
COLA
4.56%CUT
2.5%CUT
$6,447
5.02%
COLA
5.66%
COLA
2.63%CUT
.958%CUT
Cumulative loss from statutory
level = $947 per ADA)
$5,500
ADOPTED
Cumulative loss from statutory
level = $1,041 per ADA)
$5,406
PROPOSED
REVENUE LIMIT FUNDING: 2009-2010
$6,447
Impact on UUSD: 2009-2010
Summary of Proposed State Cuts
.68 Cut carried forward
 4.5% Cut carried forward
 2.5% Additional Cut
 Previously identified Cuts
SUBTOTAL

$429,000
$3,278,887
$1,782,331
$3,900,000
$9,390,218
Summary of Adopted State Cuts
.68 Cut carried forward
 2.63% Cut carried forward
 0.958% Additional Cut
 Previously identified Cuts
SUBTOTAL

$429,000
$1,875,011
$712,932
$3,900,000
$6,916,943
Impact on UUSD: Base Revenue Limit
Summary of Adopted State Budget
2008-2009 Adopted Mid Year Cuts
 Elimination of .68 COLA
 2.63% Additional Cut
SUBTOTAL
$429,000
$1,875,011
$2,304,011
2009-2010 Adopted Budget
 .68 Cut carried forward
 2.63% Cut carried forward
 0.958% Additional Cut
 Previously identified Cuts
SUBTOTAL
$429,000
$1,875,011
$712,932
$3,900,000
$6,916,943
The State Solution:
Categorical Cuts and Flexibility
 Categorical programs are divided into three tiers to
protect some and provide flexibility to others
 TIER I: No funding reduction, no program flexibility,
no statutory requirements waived
 TIER II: Funding reduction of about 15% from 200809 levels; NO flexibility; must be operated according
to current requirements
 TIER III: Funding reduction of about 15%; maximum
flexibility to shift spending for any educational
purpose
 Changes start this year and continue until 2012-13
The State’s Solution:
Categorical Cuts and Flexibility
 TIER I: Child Development, Child Nutrition, EIA,
K-3 CSR, Prop 49 after school, Special Ed, Home
to School Transportation, QEIA
 TIER II: State Testing, ELAP, plus ten others not
significant in UUSD
 TIER III: All other state categoricals, including
Adult Ed, supplemental grants for music, PE,
arts, school counseling, PAR, ROP, instructional
materials (textbooks), Gr. 9 CSR, GATE, CAHSEE
support, CBET, and dozens of others…
There were SOME changes in…
 Reduced penalties for K-3 Class Size Reduction
 Accessing prior year categorical balances
(sweep ups) from 2007-08 only for any
educational purpose – with 8 programs excluded
 Routine Restricted Maintenance Transfer (reduce
transfer from 3 to 1 percent until 2012-13)
 Deferred Maintenance – Eliminates local .5%
statutory match until 2012-13
 Mega Item categorical flex provision - replaced
with broader flexibility package
 Instructional materials timelines suspended for
two years – must maintain Williams compliance
There were NO changes to…
 Current law regarding Reserve for Economic
Uncertainty (3 percent)
 Minimum number of minutes and the minimum
school year remains 180 days
 K-Adult mandated cost reimbursement program
remains in place – the district will continue to
process claims and maintain records
The Nation’s Solution:
The Federal Stimulus Package
 K-12 will benefit primarily from:
 State Fiscal Stabilization Fund (UUSD est. TBD)
 IDEA - Special Education (UUSD est. $2,530,000)
 Title I – Restricted (UUSD est. $1,135,000)




It is one-time money
Districts won’t see funds until after July 1, 2009
Unable to factor into 2008-09 budget solution
May not be able to include in 2009-10 budget by
June deadline; hope to be able to add in fall
 Awaiting instructions from Feds, CDE & County
What does all this mean?
 The cuts to the base revenue limit were not as
deep as the Governor’s proposal – but they are
still the largest reductions in public education’s
history and the impact will be devastating
 The flexibility to shift state categorical funds to
address these losses is not as broad as
proposed by the Governor – limiting district’s
ability to shift funds to protect our core
programs and meet local priorities
 In summary, the combination of the cut in the
district’s income and the updated “menu” of
solution options is no better and no worse than
earlier projected. The district has some very
difficult decisions to make and implement
More questions than answers…
 How will the district’s Supplemental Early
Retirement Program affect lay-off decisions?
 What does the change in penalties for K-3 CSR
mean to districts?
 How much of the federal money will make it
through to districts – and how much discretion
will there be to spend what we receive?
 What will happen in the May Special Election…
and what is the State’s back-up plan?
Q: How will Upland USD respond?
A: We will “stay the course.”
1) Enhance the bottom line by the spending
and hiring freeze implemented in
November (this is one-time money)
2) Conservative, planned deficit spending
using supplemental reserves, again a
temporary ‘fix’
3) Exercise categorical flexibility in state
budget with discretion; factor in Federal
Stimulus Package once confirmed
How will Upland USD respond?
4) Identify additional revenue sources
5) Identify additional cuts in spending
6) Seek negotiated solutions with employees
 Hope for the best; plan for the worst
 Communicate and stay focused
 Advocate, advocate, advocate
www.capta.org
www.protectourstudents.org
www.csba.org
NEXT STEPS
Early
March
- Issue lay-off notices to 78.5 certificated
non-management employees
- Issue release/reassignment letters to
all certificated administrators
Mid
March
- Issue lay-off notices to classified
employees (number & positions TBD)
April
- Make decision re: SERP program
participation
Ongoing
- Monitor budget & revisit lay-off actions
May
- Analyze Governor’s May Revise
By June
- Adopt 2009-10 Budget
www.upland.k12.ca.us
Email: [email protected]