May Budget Review 2010-2011

May 20, 2010

Ramona Unified School District

Tonight’s DiscussionUpdate on the Progress of the 2010-2011

BudgetReview Assumptions of the Budget Reduction

PlanRevised AssumptionsMay ReviseOther Funds

This report ONLY looks at the revenues and expenses of 2010-2011, not at any carryover or ending balances

What We Know An analysis of the Governor’s January Budget

ProposalReduction to revenue limit

Negative COLA (-0.38%)$201 per ADA reduction

Loss of revenues due to decline in enrollmentEstimated increase in operating costsFormulated Budget Reduction Plan

Number of retirees (early retirement program)FTE layoffs for both Certificated and Classified

employeesReduction of site and department allocationsReduction in maintenance funding

May Budget Revision has been submittedA formal analysis has not been completed

Total Budget Reductions

Budget Shortfall $8,278,129

Budget Reductions $8,366,003

Loss of ARRA Funding $225,000

New Budget Reductions $8,141,003

Budget Gap $137,126

The UncertaintiesActual Enrollment in August 2010

How many students, what grade levels, and which schools will they attend

Economy

May Revision of State BudgetHow will the details of the revised budget proposal

affect RUSD?How will the Legislators react?How long will it take to come to a vote?

What will be the actual expenditures for the current year? Will have an effect on carryover dollar amounts

Total Revenues $46,837,093Total Expenses $49,428,144Difference $ (2,591,051)

The $2,600,000 deficit will be backfilled in by savings from the current year’s Budget Reduction Plan, which will increase the 2009-2010 ending balance

This ending balance, along with dollars from the reserved fund, will backfill in the deficit

2010-2011 May Budget Update

Biggest change affecting this revision is new information on salaryInformation on salary advancements from

Human Resources Department – which, in turn, is incorporated into the Budget

Normal, expected process

Changes from April

May 14, 2010, the Governor presents his May Budget Revision to his January budget proposal

This morning, staff attended a workshop, presented by School Services of California, Inc., which provided more detailed information on the Governor’s May Revision proposalInformation learned has not been fully analyzed

and is not incorporated into the current budgetNext slides convey some of the major themes of this

morning’s presentation, and credit for these slides is given to School Services of California, Inc.

May Revision

Education fares better than the rest of the Budget

The rest of the Budget is absorbing even heavier cuts in order to protect education from deeper cutsBut remember – the nearly $2.5 billion taken

from education in January still remainsChildcare takes a huge cutSocial and health programs that serve K-12

students and their families are hit even harderCalifornia Work Opportunities and

Responsibility to Kids (CALWORKs), which is California’s main avenue to welfare payments, is on the chopping block

Overview of the State Budget

For the most part, the May Revision contains no further cuts to K-12 education? Cuts proposed in January remain Targeted proposed administration cut is eliminated Cuts to childcare eliminate subsidized slots for 142,000

children No new federal dollars

No new taxes are proposedMajor additional cuts to the non-education

portions of the Budget are proposedExpect the Legislature to have great difficulty

voting for the choices before themDespite the Governor’s call for an on-time

Budget, SSC does not expect that to happen

May Revision Features

The revised Budget gap is projected to be $19.1 billion, slightly smaller than the $19.9 billion gap in the January Budget

The Governor proposes to close the gap without raising taxes$12.4 billion in cuts$3.4 billion in additional federal funds (down

from $6.9)$3.4 billion in borrowing fund shifts, asset

sales, and surcharges

Major May Revision Proposals

Program cuts make up the majority of the Governor's May Revision proposals including:$1.1 billion in savings from elimination of

CALWORKs $637 million in savings from cuts to the In-

Home Support Services for the disabled$750 million in savings from Medi-Cal, the

State’s primary healthcare program for low-income residents

$244 million in savings from transferring state prisoners to county jails

$602 million in savings from reduced county mental health services

These cuts will be debated and could threaten the education budget if reduced

Major May Revision Proposals

The -0.38% COLA is revised to -0.39%About $0.61 per ADANot significant

The January Budget proposed cutting $1.5 billion from revenue limits and targeting the reduction to school administration

This proposal called for a $201 per ADA reduction to revenue limits

Revenue Limit Funding

May Revision drops the nature of the cut, allowing for local discretion in how the cut will be implemented

The $1.5 billion cut remainsDOF is considering a 3.85% reduction to each

district’s un-deficited base revenue limitThis reduction could range from $225 to $280

per ADA, a change from $201 per ADA

Could result in an additional $150,000 to $483,000 reduction to revenues to Ramona

If the 3.85% is applied to the deficited revenue limit, the cut would be close to the original $201 per ADA

Targeted Administrative Cut

The May Revision is silent on the Governor's proposal for teacher reform

SB-955 (Huff) does contain the proposals

Per diem sub pay is included in this Senate Bill

President pro Tempore Steinberg has taken this Bill out of play after it passed the Senate Education Committee, giving this Bill a cooling off period

Per Diem Sub Pay

Court challengesLate budget, which could delay some of the

budget saving proposalsEconomy and revenue risks

“We will not pass a budget that eliminates CALWORKs” - Senate President pro Tempore Darrell Steinberg (D-Sacramento)

“New taxes are off the table with Republicans” – Assembly Minority Leader Martin Garrick (R-Solana Beach

Risks to the Revised Budget Proposal

Other FundsFood Services

Revenues $2,064,500Expenses $2,115,329Ending Balance $513,399

Capital Facilities (Dev. Fees)Revenues $239,000Expenses $265,215Ending Balance $8,422,165

Cash with Fiscal Agent $ 5,573,456Remaining Balance $ 2,848,709

Other FundsSelf Insurance Fund (Fund 670)

Revenues $566,000Expenses $565,000Ending Balance $260,523

Required Reserve Fund (17)Revenues $ 89,000Expenses/Transfers $889,000Ending Balance $2,422,942

May Revision What does this proposal mean to Ramona

Unified?Input the revised numbers into the June Budget

Continue to look at and revise assumptions?

What’s Next