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Governor’s Proposed Budget & Considerations Under Study
2010-2012
Upland Unified School DistrictJanuary 12, 2010 rev. 1/19/10
GOVERNOR’S PROPOSED BUDGETJanuary 8, 2010
“Proposal protects education” Q: Does the music match the words? A: It depends…
No mid-year cuts to K-14, in spite of a major budget gap Prop 98 guarantee funded in 2009-10 & 2010-11, but the formula leads to cuts of $2 billion in 2010-11 – real cuts must be madeProposal promises to “fully fund” the statutory COLA, but COLA is actually negative and results in a funding lossHigher costs + Loss of one-time revenueBOTTOM LINE: The assumptions upon which this report have been prepared appear to be in-line with the Governor’s initial budget proposal until more is known
GOVERNOR’S PROPOSED BUDGETThe devil’s in the details . . . This proposal includes:
Imposes cuts for central office administrative costs Eliminates the regulations giving laid off teachers the first priority in substitute assignments at their per diem rate
Moves the March 15th layoff notice provision to 60 days after adoption or amendment of the state budget
Changes in the law that would allow the LEA to lay off, assign, reassign, transfer, and rehire teachers without regard to seniority, but “in the interest of retaining the best teachers.” (subject to local collective bargaining)
References to other comprehensive school reforms to eliminate “statutory and regulatory barriers to student achievement.” The proposal provides few clues on this.
“Eliminates barriers” to contracting out district services
GOVERNOR’S PROPOSED BUDGETCommentary
Legislative Analyst’s Office, January 12, 2010
The LAO stated that, while it is reasonable to assume the state will secure some new federal funding and flexibility, the chances that California will receive all of what the Governor seeks from Washington is almost non-existent. The LAO believes that the federal relief will be BILLIONS less than the Governor built into his budget proposal.
School Services of California, January 12, 2010
Based on information provided by California’s Department of Finance, revenue limits could be reduced by an additional $201 per ADA for unified districts on top of the negative COLA and deficit factor.
First Interim Budget (Dec. 2009)
2009-10 2010-11 2011-12Revenues $83,056,528 $85,990,733 $86,019,486
Expenditures $96,694,067 $90,995,982 $86,242,974
Increase/Decrease
In Fund Balance
($13,637,539) ($5,005,249) ($223,488)
Beginning Fund Balance $21,854,621 $8,217,082 $3,221,833
Ending Balance $8,217,082 $3,211,833 $298,8345
Less: Restricted Reserves ($7,421,428) ($2,879,879) ($2,737,289)
Unrestricted Balance $795,654 $331,954 $251,056
Solvency Solutions Needed for Positive Ending Balance
$9,652,187 $8,048,861 $4,610,418
The $12 million question: How will we make this next round of crippling
cuts???
The $12 million answer: Through a
combination of Cabinet Cuts, Board
Decisions and Negotiated Solutions.
Level 1: Cabinet Funding DecisionsBUDGET ACTION 2009-10 2010-11 2011-12
Spending Freeze $150,000 -0- -0-Utilize ARRA – federal stimulus funds
$2,716,000 $1,389,383 -0-
Utilize State Categorical “Tier III” provision
-0- $1,328,391 $1,000,000
Utilize “Categorical “Sweep” provision (07-08 balances)
$1,100,000 $1,000,000 $690,000
D.O. administrative staff cuts and reallocations
$295,000
Eliminate state categorical contribution to summer school (federal funds only)
-0- $161,000 $161,000
Reduce deferred maintenance transfer
$100,000 $100,000 $100,000
TOTAL $4,361,000 $4,273,774 $2,051,000
Level 2: Board Considerations
CONSIDERATION 2010-11 2011-12
Increase from 24:1 to 29:1 in Grades K-3 (Estimate of 23 FTE)
$825,133
Certificated bargaining unit retirement incentive (calculated based on 60% replacement)
$450,000 $450,000
Eliminate instrumental music program (2 FTE)
$201,749
Eliminate elementary PE (3.6 FTE, 4 aides)
$324,141
Freeze step and column salary increases for all employees (becomes a deferred expense)
$700,000
Reduce district contribution to stipends for extra-curricular (current $446,000)
$100,000 $100,000
Level 2: Board Considerations cont.
CONSIDERATION 2010-11 2011-12
Eliminate district contribution toward County Probation Officer
$25,000
Eliminate bus transportation at secondary schools
$60,000
Reduce custodial services to every other night cleaning (1 FTE=$57,298)
TBD TBD
Reduce health tech staffing at schools (1 FTE = $43,073)
TBD TBD
Reduce school library techs (1 FTE = $21,488)
TBD TBD
TARGET AMOUNT: $2,300,000
Level 3a: Negotiable SolutionsExtend Current MOU Agreements through 2012
MOU AGREEMENT 2010-11 2011-12
Increase average class size from 29 to 31 in Gr. 4-12
$795,000
Reduce work year by two days for all employees
$500,000
TARGET AMOUNT $1,295,000
Level 3b: Negotiable SolutionsNew Considerations for 2010-12
CONSIDERATION 2010-11 2011-12
Further cut work year for all employees by up to 6 additional days (reduce student days from 180 to 175; plus eliminate 1 pre-service day)
$250,000
per day
6 = $1.5 m
Maintain current general fund contribution toward employee health and welfare benefits
$908,804
Eliminate release time provision for grades 4-6 due to equitable class size in K-6
This savings is reported in Level 2: Elementary PE ($324,141)
Eliminate step and column increases for the next two years
$700,000
Across-the-board salary rollback
(1% = $483,000)
TBD TBD
TARGET AMOUNT: $3,000,000
SUMMARY OF CONSIDERATIONS
2010-11 2011-12
Estimated Target: $8,048,861 $4,610,098
LEVEL 1: Cabinet Decisions $4,273,774 $2,051,098
LEVEL 2: Board Target $2,300,000
LEVEL 3a: MOU Agreements $1,295,000
LEVEL 3b: Negotiable Target $3,000,000
Estimated Totals: $10,868,774 $2,051,000
TOTAL: $12,919,774
SUMMARY OF CONSIDERATIONSFor $15 million in reductions
Cabinet
Board
MOU
Negotiable
New Cuts
Beware of the “Revenue Cliff” If not addressed, the loss of State flexibility provisions, combined with the expenditure of Federal Stimulus Funds, will leave millions of dollars in ongoing, but unfunded, expenses.
Fiscal experts are predicting that the state economy will not fully recover until 2015. The prospect of mid-year as well as additional annual reductions must be considered.
Bold action, taken early, allows the district and its employees to weather the storm and control its destiny – while providing options to make positive corrections if the scenario improves.
Next Steps Continue to work with:
Employee Associations- Budget Road Shows at all schools/depts- Open negotiations
Parent Groups, Community Partners- “Budget Watch” publication- Town Hall Meetings:
January 21, 7 p.m. at UJHSFebruary 1, 7 p.m. at PJHS
Deadlines: Education Code (42127, 42130)
By March 15, 2010: Adopt 2nd Interim Budget
By June 30, 2010: Adopt Final District Budget for 2010/11 thru 2012/13
