Berryessa Union School District

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Berryessa Union School District. Governor’s Proposed Budget for 2011-2012. The Governor’s Proposals for 2011-12. So, how does the Governor propose to dig the state out of this economic quagmire? Cuts – lots of them - PowerPoint PPT Presentation

Text of Berryessa Union School District

  • Berryessa Union School DistrictGovernors Proposed Budget for 2011-2012

  • The Governors Proposals for 2011-12So, how does the Governor propose to dig the state out of this economic quagmire?Cuts lots of themBut with the acknowledgement that education has already taken more than its fair share of cutsRealignmentTo restore local control of service delivery and save the state moneyContinuation of taxesTemporary taxes would be extended by five yearsBasically the Governor has two plans:If the taxes are extended, the cuts are as budgeted in JanuaryEducation would be flat funded for 2011-12If the taxes are not extended, an estimated additional $9 billion in cuts would be needed, including large cuts to education

  • Proposition 98 and The Education BudgetBecause of suspension, Proposition 98 is not a factor in 2010-11, except for marking the maintenance factorFor 2011-12, there is no proposal to suspend Proposition 98But if the temporary taxes are not extended, Proposition 98 drops by $2.3 billionAnd the Governor indicates he expects education to take that hitAdditionally, another $6 billion in solutions would need to be foundWith extension of taxes education is flat-funded for 2011-12No midyear cuts are proposed, so we keep the funding level in the enacted 2010-11 Budget through 2011-12Mandates are funded to the tune of $89 millionThe maintenance factor, to be collected in some future good year, continues to grow

  • Californias Economic OutlookCalifornias economy was hit hard during the recessionSubprime loans and the collapse of housing led the downturnThe states 12.4% unemployment rate is the third highest in the nationSince the employment peak, the state has lost 1.3 million jobsConstruction employment was hit hardestUCLA says the state is well positioned for the recoveryUCLA identifies education, health care, exports, and technology as leading the wayRegional differences: Coastal cities will thrive, while the Inland Empire and Central Valley will struggleThe Governors Budget, however, expects the labor market to be a continuing challengePayroll employment is not projected to reach prerecession levels until 2016, eight years from the beginning of the recession

  • Risks to the Budget ProposalFlat funding for K-12 education is dependent upon voters approving the extension of the current temporary taxesThe Legislature must place this proposal on the ballot, requiring two-thirds vote in each houseTwo Republicans in each house must agree will be a tough sell!Voters may turn this down even if it gets on the ballotLegislature must approve shifting special funds (Proposition 63 for mental health and Proposition 10 for First 5 Program)Two-thirds vote is requiredThe Legislature must approve the local government realignment proposal and place the tax extension proposals on the ballot to pay for realignment

  • Risks to the Budget ProposalCourt challenges could thwart full implementation of the program reductions and fund shiftsLast November, voters protected local government funding by adopting Proposition 22This measure is at odds with the Governors Proposal for redevelopment funds and transportation bondsThe economic recovery could stall and revenues could underperform the forecastProblems in Europe could threaten Californias export marketMassive federal deficits could rekindle inflationA trade war with China could weaken exports and spur inflationThe recovery rate could simply be slower than expected

  • Budget Contingency PlanThe Governors Budget assumes that the temporary taxes are extended by the voters for five more yearsThe Budget also proposes that additional reductions be made in the event that the tax extensions are not approvedThis leaves schools in a position of needing at least two plansOption 1 flat funding continues the funding level contained in the enacted Budget for 2010-11 into 2011-12Option 2 a $2 billion reduction in funding results in a loss of about $330 per ADA for the average districtDistricts will need to plan for both eventualities until the fate of the tax extensions is determinedAdditionally, economic changes between now and enactment of the 2011-12 Budget could also cause a revision, up or down

  • K-12 Education Took Biggest CutsGeneral Fund Expenditures by Major Program AreaSource: 2011-12 Governors Budget Summary

    Dollars in Billions% Change 2007-08 to 2010-112007-082008-092009-102010-11K-12 Education $42.5 $35.5 $34.6 $36.3 Higher Education $11.8 $11.7 $10.6 $11.6 Health and Human Services $29.7 $30.9 $25.0 $27.0 Corrections and Rehabilitation $10.2 $10.3 $8.2 $9.3 Natural Resources $1.9 $2.0 $1.9 $2.0 8.3%

  • Proposed 2011-12 Funding vs. 2010-11Enacted BudgetThe Governors Budget does not fund the 1.67% estimated COLA ($107 for unified districts)The funded base revenue limit drops approximately $19 per ADA from the 2010-11 level

    19.608% Deficit$6,493-$1,273-$1,14817.963% Deficit$6,386

    Chart1

    52381148

    52201273

    Series 1

    Series 2

    $5,238Funded Base Revenue Limit

    $5,220Funded Base Revenue Limit

    Sheet1

    Series 1Series 2

    2010-11 Actual52381148

    2011-12 Proposed52201273

    To resize chart data range, drag lower right corner of range.

  • 2011-12 Berryessa Revenue Limit

    Average Unified District for 2011-12Base Revenue Limit per ADA (A)Proration Factor(B)Funded Base Revenue Limit (C) = (A) x (B)1.2010-11 Base Revenue Limit6059.670.82037*4971.172.2011-12 COLA per ADA102.003.2011-12 Base Revenue Limit6161.670.80392**4953.494.Net 2010-11 Funded Revenue Limit (Line 1, Column C)4971.175.Dollar Change (Line 3, Column C, Minus Line 4, Column C)-17.686.Percentage Change (Line 5, Column C, Divided by Line 4, Column C)-0.36%Per ADA Reduction if Tax Extensions fail = $330.00 resulting in net funded RL of $4,623.49 * 0.82037 = 1 - 0.17963 (2010-11 deficit factor)** 0.80392 = 1 - 0.19608 (2011-12 deficit factor)

  • Planning AheadThe Governors Budget Proposal provides flat funding for educationLEAs must be prepared to make adjustments to the budget based on:Local factors Declining enrollmentReserve levelsState factorsEconomyElection outcomeWe recommend using the current State Budget Proposal, SSC Dartboard, and local assumptions as budgets are developed for next fiscal yearIt will be important to have contingency plans in place, as change is inevitablePlan A current proposalPlan B improvements to proposal what will be restored?Plan C reductions to proposal what will be cut?Plan D ?

  • District Budget Overview (Unrestricted) Based on Governors 2011-12 Budget Proposal -$19 per ADA

    Option A assumes special elections taxes pass in June2010-11Adopted Budget2010-11 Adjusted Budget2011-12 BudgetNet ChangeBeginning Fund Balance5,366,2026,508,9626,038,445-470,517Revenues:Revenue Limit37,468,89839,691,28038,623,876-1,067,404FederalState5,059,5625,069,7334,958,333-111,400 Other Local 2,880,2772,787,7459,417Flexibility Transfers1,841,8381,841,8381,841,838 Expenditures44,520,69844,502,78145,151,818649,037Other Financing Sources300,000+/- Revenues to Expenses-5,440,779-5,358,3325,503,520145,188Ending Fund Balance2,955,3006,038,4453,604,316-2,434,129

  • Our Multi-Year Projection Option A -$19 per ADAUnrestricted General Fund

    2010201120122013Beginning Balance5,5946,5096,0383,604Total Income48,88149,39148,22149,863Total Expenditures44,11844,50345,15248,945Contributions (xfr)-3,848-5,358-5,504-5,652Ending Balance6,5096,0383,604-1,130Required Reserve1,8321,8381,7601,881Undesignated Res3,9694,0921,735-3,119

  • District Budget Overview (Unrestricted) Based on Governors 2011-12 Budget Proposal -$330 per ADA

    Option B assumes special elections taxes fail in June2010-11Adopted Budget2010-11 Adjusted Budget2011-12 BudgetNet ChangeBeginning Fund Balance5,366,2026,508,9626,038,445-470,517Revenues:Revenue Limit37,468,89839,691,28035,994,664-3,696,616FederalState5,059,5625,069,7334,958,333-111,400 Other Local 2,880,2772,787,7459,417Flexibility Transfers1,841,8381,841,8381,841,838 Expenditures44,520,69844,502,78145,151,818649,037Other Financing Sources300,000+/- Revenues to Expenses-5,440,779-5,358,3325,503,520145,188Ending Fund Balance2,955,3006,038,445975,104-5,063,341

  • Our Multi-Year Projection Option B - $330 per ADAUnrestricted General Fund

    2010201120122013Beginning Balance5,5946,5096,038975Total Income48,88149,39145,59247,257Total Expenditures44,11844,50345,15248,945Contributions (xfr)-3,848-5,358-5,504-5,652Ending Balance6,5096,038975-6,365Required Reserve1,8321,8381,7601,881Undesignated Res3,9694,092-894--8,354

  • Next StepsBalanced budget must be adopted by district prior to June 30, 2011State Budget will most likely not be in place by thenDeveloping the budget requires:Clarifying assumptionsHow much revenue?How will expenditures change?Once the State Budget is adopted, the district makes adjustments to its budget within 45 days

  • AssumptionsOption A and Option B scenarios assume:Flexibility for CSR goes away in 2012-13Step and Column increases are 1.5% each yearHealth and Welfare increases 5% each yearAssumes Revenue Limit deficit of 19.608% each yearUnrestricted Lottery $111 per ADAADA declines to 7,968 in 11-12 and to 7,897 in 12-13

  • Questions?