2009/10 budget development state adopted budget

2009/10 Budget 2009/10 Budget DevelopmentDevelopment State Adopted Budget State Adopted Budget

Board Board MeetingMeeting

March 3, March 3, 20092009

Prepared by: Dr. Cathy Nichols-Washer Mr. Douglas Barge & Staff

LODI UNIFIED SCHOOL DISTRICTLODI UNIFIED SCHOOL DISTRICTBusiness ServicesBusiness Services

Y: Business Services/Budget/2009/10/Adopted/Meetings/C02-23-09/2009-10 State Adopted Budget C02-19-09

Executive SummaryExecutive SummaryState will be increasing taxes

State will be reducing allocations to education

State will be borrowing to make it all happen

This is another one of those risky State budget plans

Federal resources may help

Revenue Limit resources have improved over previous reporting but are still down $482/student this year alone

Categorical resources have lost ground this year and next

The District is still facing some difficult decisions

i.i.

Table of ContentsTable of Contents

Introduction State Funding Resources The Budget Cuts / Revenue Limits State Categorical Resources Building a Strategy Closing Remarks Appendix

ii.ii.

1

2 - 4

5 - 6

7 - 18

19 – 20

21

A

DescriptionDescription Page No.Page No.

IntroductionIntroduction On the morning of February 19, 2009, the State Legislature

finally adopted a budget plan covering the next eighteen months

The plan covers 2008/09 and 2009/10 It calls for tax increases to provide more revenues for the State,

borrowing, and budget cuts

But before we get too excited: The voters will be given a say

Combining both State and Federal resources will be difficult with the number of unknowns still remaining

11

Resources for the StateResources for the State $14.4 B in “Temporary” (24 months) revenues

Increase sales tax by one (1) cent Increase Vehicle License Fee to 1.00% Increase State income tax by 0.25% Reduction of the dependent care tax credit Income tax surcharge of 2.50%

Could be extended to 2012/13 if voters approve spending cap change

Special election is scheduled for May 19, 2009

22

State BorrowingState Borrowing

$6 B in Revenue Anticipation Warrants (RAW) Three conditions must exist to sell RAWs

The State must have a sustainable, balanced budget with all required statutory changes enacted prior to selling the RAWs

The must have a plausible plan for repaying the RAWs in the subsequent year

There will have to be legislation enacted prior to the sale of the RAWs that protects the RAW holders

$5 B from Lottery securitization

$0.4B Transfers and loans from special funds

33

Education Cuts for 2008/09Education Cuts for 2008/09

Reduces current year Prop 98 appropriation

Program reductions $2.3 B Previously funded COLA (.68%)

Remaining Half Revenue Limit Half Categorical Programs

44

The Budget CutsThe Budget CutsRevenue LimitsRevenue Limits

iii.iii.

K-12 Revenue LimitsK-12 Revenue Limits

COLA4.98%

Adopted Adopted 2008/092008/09

Base

* Net result is a permanent loss in on-going funding* Net result is a permanent loss in on-going funding


Base

2008/09 2008/09 AdoptedAdopted

Base

COLA4.98%

.68% COLA .68% COLA

Cut .96%

COLA5.66%

COLA5.02%

Cut2008/09

13.094%

New info.

COLA4.98%

2008/09 2008/09 BudgetBudget

Base

.68% COLA

Cut 4.57%

55

OriginalOriginalGovernors Governors ProposedProposed FinalFinal

Cut 2.63%

K-12 Revenue LimitsK-12 Revenue Limits

COLA4.98%


Base

* Net result is a permanent loss in on-going funding* Net result is a permanent loss in on-going funding

GovernorsGovernors2009/102009/10

Base

.68% COLA

Cut 2.52%Cut 2.52%

COLA5.66%

COLA5.02%

Cut2008/09

16.16%

Cut 2.63%

New info.


Base

Cut .96%Cut .96%

COLA5.66%

COLA5.02%

Cut2008/09

13.094%

66

State Categorical State Categorical ResourcesResources

iv.iv.

New

Bud

get

15%

New B

udge

t

15%

New B

udge

t

State Categorical FundingState Categorical Funding

Tier ITier I Tier IITier II Tier IIITier III

77

FlexFlex

Adopt

ed

2008/092008/09 2008/092008/09

Adopt

ed

2009/102009/10 2008/092008/09

Adopt

ed

2009/102009/10

4.9%

2009/102009/10

4.9%

Tier ITier I – – NoNo Funding Cuts Funding Cuts No program flexibility & No ability to waive statutory

requirements

Programs are:

88

1. Economic Impact Aid (EIA)

2. K-3 Class Size Reduction

3. Prop 49 After School Programs (Bridge)

4. Special Education

5. Quality Education Investment Act (QEIA)

6. Transportation

7. Child Nutrition

8. Child Development

Tier IITier II – Funding Cuts – Funding Cuts Funding will be reduced 15%

No program flexibility Must be operated under statute

Programs current available to Lodi USD:

99

1. Ag – Vocation Education

2. Charter School Facilities Grant

3. English Language Acquisition Program

4. Partnership Academies

5. State Testing

Tier IIITier III – Funding Cuts – Funding Cuts

Funding will be reduced 15%

100% flexibility – Can be used for any purpose

2008/09 Fiscal Year Next four years

Programs are:

1010

1. CSR 9th Grade

2. Deferred Maintenance

3. Instructional Materials Fund

4. GATE

5. High Priority Schools & II/USP (*)

* Not continued into 2009/10* Not continued into 2009/10

Tier IIITier III – Funding Cuts – Funding Cuts Programs are (continued):

1111

6. Instructional Improvement Block Grant

7. Teacher Credentialing Block Grant

8. Professional Development Block Grant

9. Pupil Retention Block Grant

10.School Safety Consolidated (Carl Washington

11.School & Library Improvement (SIP)

12.Administrator Training Program

13.Adult Education

14.Arts & Music Block Grant


1212

15.California High School Exit Exam (CAHSEE Intervention)

16.Cal-Safe

17.Certificated Staff Mentoring Programs

18.Child Oral Health Assessment

19.Community Based English Tutoring (CBET)

20.Community Day Schools

21.Counselors, Grades 7-12 (SB 1802)

22.National Board Certification

23.Peer Assistance and Review

24.Regional Occupational Center/Programs


1313

25.Professional Staff Development (SB 472)

26.Specialized Secondary Programs

27.Supplemental Hourly Programs

28.Charter School Categorical Block Grant

K-3 Class Size ReductionK-3 Class Size Reduction

20.5 No Penalty

21.0 5.0%

21.5 10.0%

22.0 15.0%

25.0 20.0%

Over 25.0 30.0%

21.9 10.0%

Student/TeacherNew

No Penalty?

20.0%

40.0%

80.0%

PriorUp To

1414

* Funding will be based on a class size of 20 students. District would not receive any funding for excess students.

Categorical SweepsCategorical Sweeps

Ending Fund Balances as 6/30/08 from some programs:

Does not apply to:

1. Economic Impact Aid

2. Instructional Materials

3. Special Education

4. Quality Ed. Investment Act

5. California High School Exit Exam

6. Supplemental Instruction

7. Transportation

1515

1. Tier III programs only

Other FlexibilityOther Flexibility

Routine Maintenance Reserves

Only required to set aside 1% vs. 3% of the General Fund For 2008/09 Next Four years Program would have to be built back up over time

Deferred Maintenance

No local contribution required (0.5%) for 2008/09 Next Four years

1616

Education Cuts for 2009/10Education Cuts for 2009/10

Estimated 5.02% statutory COLA would not be funded

Reduces Prop 98 spending levels by $530 M Half Revenue Limit (a total deficit of 13.094%) Half Categorical Programs (4.90%)

Tier II & III Programs

Special Education (SELPA) will be increased by $10.92 per 2008/09 P-1 ADA

Eliminates High Priority Schools Grant Program

1717

Federal StimulusFederal StimulusHow much will be available to help District directly?

Unrestricted SupportSpecial Education

State Bailout

Federal Funding

School Improvement Grant

Title I

•Lots of questions

•How much?

•When will it arrive?

•Is there flexibility?

•What kind of projects?

•Can we reduce District support to Special Ed.?

•Can we use dollars to help with class sizes?

•Can we use Title I to help with class sizes?

Title IFlexibility

1818* No School Renovation, Repair resources per SI&A

Building a StrategyBuilding a Strategy

v.v.

Creating CapacityCreating Capacity Capacity is the ability to retain staff and programs

Categorical capacity may be possible after considering the impact of the reductions in Tier III

Where is there other capacity: JAESC Reductions Funded with Categorical Resources Deferred and Routine Restricted Maintenance Federal Support for Special Education Title I – New Federal Dollars Prior Year Sweeps K-3 Class Size Reduction Penalties

1919

Addressing SuggestionsAddressing Suggestions The Food Service Program lives within its income subventions

Cutting the program would cause a loss of revenues to the General Fund making our problem worse

Reducing the number school days below 180 days would be catastrophic financially According to the California Department of Education, Education Code requires that a

penalty be applied to the State funding allocations for a drop in days from 180 to 175 If the drop in days continued into the next year there would be a total loss of State

funding Any drop below 175 days would cause a total loss of State funding

The Bridge Program is a voter approved State program This program will not help the District financial situation if the program were eliminated

Quality Education Investment Act (QEIA) results from a settlement of a lawsuit between CTA and the State If the District choose to remove itself from the program 100% of the State funding

would have to be returned

2020

Closing RemarksClosing Remarks The next step in the process is to calculate the impact

of the new State budget plan on our District

Examine the use of the flexibility options provided

See how the Federal flexibility folds into a strategy for building a balance budget

Rolling that strategy into our process and timelines

We expect to bring that work back to the Board at the next study session

Finally, cash flow is still a problem

2121

The End/BeginningThe End/Beginning

vi.vi.

AppendixAppendix

A. State Ballots

B. Timelines

v.v.

The May 19 BallotThe May 19 Ballot Proposition 1A

This measure will securitized the Lottery Take school out of the Lottery & allow the State to sell bonds Schools will see an increase in Prop 98 Funding to accommodate the

loss of Lottery revenues

Proposition 1B

State spending cap

Proposition 1C

Education funding for the maintenance factor

A1A1

The May 19 BallotThe May 19 Ballot

Proposition 1D

Allows the State to divert the use of Prop 10 monies

Proposition 1E

Allows the State to divert the use of Prop 63 monies

A2A2

TimelinesTimelines

Board report on State adopted budget plan Superintendent’s Budget Advisory Committee

(SBAC) meeting Board report on the Impact to the District of the

State adopted budget SBAC meeting SBAC meeting SBAC meeting – Recommendation to the Supt. Board Meeting - Superintendent recommendations State’s May revisions to the budget assumptions Board Meeting - Final adjustments to the budget Board Meeting – Budget is adopted

3/03/093/04/09

3/09/09

3/11/093/18/093/25/094/07/09Mid-May

MayJune

B1B1

Events Dates

2009/10 budget development state adopted budget

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