Transcript 2009-10 FIRST INTERIM REPORT

Governor’s
Proposed Budget
2010-11
Steve Bolman
Deputy Supt., Business and Administration
Midge Hoffman
Director, Budget & Accounting
The Economy
• Signs indicate that
most of the nation is
recovering…California
not so much
– California
Unemployment at
12.3% compared to
10% for the U.S.
– DOF estimates rate to
remain above 10%
through 2011
Employment Trends
December 2007 to November 2009
Government
Leisure & Hospitality
Financial Service
-206
-283
-28
-70
-118
Manufacturing
Construction
Industrial Sectors (Jobs in Thousands)
Recovery
The Economic Cycle
Stabilization
December
2007
Spring
2010
5-year return
to December 2007
2015
Governor Vows to Protect
Education!!!
• Education will
take less than
it’s share of
pro-rata cuts in
2010-11
Priorities
• Governor states that
prison expenses will
no longer be higher
than higher education
expenses, but speaks
nothing about K-12
and the fact that it is
next to dead last in
funding in the Nation
GOOD NEWS!!!
• No Mid-Year
cuts for 200910!!!
• Decrease in
Prop 98 offset
by sweep of
underutilized
K-3 CSR funds
GOOD NEWS!!!
• FUNDED
COLA for
2010-11!!!
BUT WAIT, THIS GOOD NEWS
DIDN’T LAST VERY LONG…
• If only it were real
• …the COLA is
being ‘funded’
because it’s
negative
• -.38% cut to the
Revenue Limit
GOOD NEWS THAT DIDN’T
LAST
• The previous 2010-11
COLA reported was
.5% positive…a
negative swing of .88%
– Elementary
– Secondary
– Cherry Valley
–
TOTAL
- $109K
- $318K
- $17K
- $444K
2011-12 COLA
• 2011-12 COLA rebenched to 1.8% from
2.4% - <.6%> decrease
– Elementary
– Secondary
– Cherry Valley
–
TOTAL
- $ 66K
- $182K
- $ 10K
- $258K
• Cumulative Loss for
2010-11 & 2011-12 =
$1.15 Million
It feels good to be
“Protected”…or does it?
• “Protected”
doesn’t mean
no new cuts
NO CUTS FOR THE ‘PROTECTED’
EDUCATION BUDGET ???
• The one-time
revenue limit cut of
$252.83 per ADA in
2009-10 is deleted
for 2010-11 … BUT
• This is being
replaced by
another on-going
cut …
NO CUTS FOR THE ‘PROTECTED’
EDUCATION BUDGET ???
• The $1.5 B cut is to
come from “District
Administration”
– $191 Elementary
– $231 Secondary
• An additional loss of
$1.5 M for the District
• This on-going additional
cut won’t increase the
revenue limit deficit
factor – there’s no
payback
NO CUTS FOR THE ‘PROTECTED’
EDUCATION BUDGET ???
• No basis in reality for
this figure
• Only gives the
‘appearance’ that the
Governor is keeping cuts
from the classroom
• Would eliminate 3 out of
every 4 positions in the
District Office
NO CUTS FOR THE ‘PROTECTED’
EDUCATION BUDGET ???
• For example, The Business Office
Staff is comprised of:
–
–
–
–
–
–
2 Payroll
2 Accounts Payable
1 Budget Tech
1 District Accountant
1 Purchasing Coordinator
1 Business Manager
• NOW, PICK TWO PEOPLE TO
PRODUCE PAYROLL,PAY
BILLS, MAKE DEPOSITS,
BUY BOOKS & SUPPLIES,
BALANCE & MANAGE THE
BUDGET,MAKE SURE WE
HAVE CASH, ENSURE
INTERNAL CONTROLS AND
SO ON…
Revenue Update - Losses
Since 1st Interim
2009-10
506,199
2010-11
Elementary
$
Secondary
$ 1,294,045
$ 1,197,129
$ 1,301,941
Cherry Valley
$
$
$
82,541
$ 1,882,785
$253/ADA
$
496,647
2011-12
85,865
$
565,488
97,431
$ 1,779,641
$ 1,964,860
$245/ADA
$278/ADA
Revenue Limit Changes
Per-ADA Revenue Change
15%
Average
Increase to the
Base Revenue Limit Per ADA
10%
5%
0%
-5%
-13.9% from
2007-08
-10%
-15%
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Year
Revenue Limit Changes
Average Unified District
$7,000
$6,411
$6,150
Dollars Per ADA
$6,000
Projected Statutory COLA
Flat Funding
Actual Funding
$6,387
$566
Loss of COLA
$5,821
$5,821
$5,668
$5,000
$482
Loss of baseline dollars
$4,981
$1,430
$4,000
2007-08
2008-09
2009-10
$5,014
$1,373
2010-11
$807
District Options/Flexibility
• Reduce calendar by 5
days through 2012-13
• Tier III Categorical
funding can continue to
be used with flexibility
through 2012-13
• Eliminate Deferred
Maintenance Transfer
• Reduce Reserve for
Economic Uncertainties
State Problems & Solutions
Problems and Solutions (in billions)
$19.9
$19.9
$1.0 Build Reserve
$0.6 Fund Shifts
$2.3 Lost Budget Solutions
$3.9 Alternative Funds
$1.4 Caseload Growth
$6.9 Operating
Shortfall in 2009-10
Budget Act Revision
$3.4 Revenue Decline
$6.9 Federal Funds
$8.5 Expenditure
Reductions
$4.9 Adverse Court
Decisions
Reason for Shortfall
Proposed Solutions
Problems with
Assumptions – Pick your
Metaphor…
• More Gimmicks
• Funding Shifts may
be legally challenged
• May not see $6.9 B
from the Federal
Government
• When will the State
figure out they’re out
of smoke & mirrors?
Trends with Revenue Cuts
2009/2010
2010/2011
2011/2012
TOTAL INCOME
$64,391,563
$61,419,468
$61,105,833
LESS TOTAL EXPENSES
$67,197,801
$66,133,400
$66,399,713
NET INCREASE (DECREASE)
$ (2,806,238)
$ (4,713,932)
$ (5,293,880)
PLUS BEGINNING BALANCE
$12,786,321
$ 9,980,083
$ 5,266,151
EQUALS ENDING BALANCE
$ 9,980,083
$ 5,266,151
$
Less RESERVES
(3,062,888)
(2,877,089)
(2,775,650)
UNAPPROPRIATED
$ 6,917,194
$ 2,389,062
$ (2,803,380)
(27,729)
Average Daily Attendance
COLA
Elementary ADA
2009/2010
2010/2011
2011/2012
4.25%
-0.38%
1.80%
18.355% Deficit
18.355% Deficit
18.355% Deficit
2,002
2,027
2,034
350
350
350
Secondary ADA
(funded)
5,058
4,886
4,683
Total ADA
7,410
7,263
7,067
(32)
(147)
(196)
Cherry Valley ADA
Net Change over
Prior Year
Trends with 2.75% Salary
Cut for All Employees
2009/2010
2010/2011
2011/2012
TOTAL INCOME
$64,391,563
$61,419,468
$61,105,833
LESS TOTAL EXPENSES
$67,197,801
$64,914,400
$65,180,713
NET INCREASE (DECREASE)
$ (2,806,238)
$ (3,494,932)
$ (4,074,880)
PLUS BEGINNING BALANCE
$12,786,321
$ 9,980,083
$ 6,485,151
EQUALS ENDING BALANCE
$ 9,980,083
$ 6,485,151
$ 2,410,271
Less RESERVES
(3,062,888)
(2,840,519)
(2,739,080)
UNAPPROPRIATED
$ 6,917,194
$ 3,644,632
$ (328,810)