Transcript Slide 1

San Jacinto USD
Update on State Budget
The Governor’s Challenges
New Governor, new approach, same difficult economic environment
The Governor faces the biggest deficit ever faced by any governor in U.S.
history
He inherits huge economic problems and a divided Legislature
The State budget cannot be balanced without tax extensions, spending
cuts, and debt
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Risks to the Budget Proposal
“Flat funding” for K-12 education is dependent upon voters approving the
extension of the current temporary taxes and some new taxes.
The Legislature must place this tax extension proposal on the ballot,
requiring two-thirds vote in each house (March)
If Legislature places tax extension measure on the ballot, voters will
decide with majority vote (June)
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State Budget Contingency Plan
Current State budget projections include tax extensions. Further reductions
will be required should the taxes not be extended.
Tax Extensions Pass – “flat funding” – continues the funding level
contained in the enacted Budget for 2010-11 into 2011-12 (actually a $19
per ADA cut) or approximately $161K for SJUSD
Tax Extensions Fail – a $2 billion reduction in funding (results in a loss of
about $349 per ADA or approximately $3 million for SJUSD)
Districts will need to plan for both
Economic changes between now and the enactment of the 2011-12 Budget
could also cause a revision, up or down
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Proposition 98 Funding
Proposition 98 Funding
(In Billions)
$58.0
$56.0
$54.0
$52.0
$50.0
$49.3
$56.6
$48.0
$46.0
$49.1
$49.5
$49.7
2008-09
Test 2
2009-10
Test 1
2010-11
Test 2
$44.0
$2.0 billion
contingent on voter
approval of tax
extensions
$47.3
$42.0
2007-08
Test 3
Source: DOF and LAO
© 2011 School Services of California, Inc.
2011-12
Test 1
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SJUSD Projected vs. Actual Funding Per ADA
$6,474
Fully
Funded
BRL
$5,205
Pass
$4,875
Fail
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2011-12 Apportionment Deferrals
Feb ’12 to Jul ‘12
$2.6 B*
$2.6 B
Apr ’12 to Aug ‘12
$0.7 B
$0.7 B
Insert wimpy
Apr ’12 to Jul ‘12
$0.4 B
Permanent
Deferrals
$0.4 B
May ’12 to Aug ‘12
$1 B
$1 B
May ’12 to Jul ‘12
$0.8 B
$0.8 B
$2 B
$2 B
Infamous P-2 Deferral
New
Deferral
Jun ’12 to Jul ‘12
Jul
2011
From ? to after Sept or Oct ‘12
$2.1 B
$2.1 B
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2012
2012
2012
New Fiscal
Year
*Includes K-12 CSR Deferral
Oct
2012
= Timing To Be Determined
= Ongoing
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SJUSD and SJTA MOU
2009-2010
MOU states … “For every $30 incremental increase to the funded BRL per ADA from
the projected 2010-2011 BRL of $4,998 without any other negative adjustment to the
Revenue Limit, or other State and Federal funds that impact the general fund, the
District agrees the Association will determine the restoration of furlough days and/or
restoration of step and column using the agreed upon ratio of $30 being equivalent to
1 (one) furlough day.”
$5,223 (Adopted budget) - $4,998 (MOU amount) = $225 increase to revenue limit.
This increase has not been received by the district and has been deferred
indefinitely, but no sooner than September/October 2011
$225 per ADA ÷ $30 (MOU incremental increase) = 7 furlough day restoration or a
combination of furlough and step and column restoration
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SJUSD Budget Scenarios
Tax Extensions Pass
$19 per 8,500 ADA loss in funding ($161K)
Required reductions remain close to budget projections
$3.1 million in concessions required by all employee groups over two
year period
Tax Extensions Fail
$349 per 8,500 ADA loss in funding per year ($3 million)
Reductions beyond current budget projections would be required
$6 million more in concessions required by all employee groups over two
year period
1 furlough day for all groups = $182,609*
1% reduction for all groups = $354,045*
*Based on unrestricted general fund
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