200809 Proposed Budget

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2008-09 Proposed Budget
Encinitas Union School District
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Introduction
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• What a difference a few months makes!
• Politics have definitely moved toward support of
  education
• Economics have gotten worse and made the Budget
  problem more difficult
• As expected, the politics are trumping the
  economics again
• Gone are the cuts that caused the greatest public
  outcry
• No call for suspension of Proposition 98
• No early release of prisoners
• No closure of state parks
• Most other cuts proposed in January remain
• Revenue projections are improved by assuming
  more debt or a sales tax increase and other
  lesser methods
• The long-term structural deficit remains

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May Revision Features
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• No suspension of Proposition 98
• Special education gains deferred maintenance
  losses
• Cost-of-living adjustment (COLA) is up, but so is
  the deficit factor
• Lottery proposal stretches out resolution of the
  Budget problem

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January vs. May Proposals
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January Proposals Withdrawn
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• The January Governors Budget set no priorities
  among the many state programs
• Instead, almost all areas of the State Budget
  were targeted for an across-the-board 10 cut
• The May Revision withdraws this approach to
  budgeting
• The January Proposal to close 48 state parks is
  withdrawn the May Revision adds 13.2 million
  and raises park fees to keep all parks open
• Early release of 22,000 inmates is withdrawn
  revised inmate and parolee population projections
  yield sufficient savings to avoid the early
  release of inmates

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New May Revision Proposals
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• Health and Human Services programs are targeted
  for greater reductions than proposed in January
  673 million more
• Medi-Cal benefits are reduced for newly qualified
  immigrants and outlays for emergency services are
  reduced because of monthly eligibility
  requirements for undocumented immigrants
• Medi-Cal eligibility is made more stringent as
  the income threshold is moved closer to the
  federal poverty level
• SSI/SSP grants for the aged, blind, and disabled
  are not increased for the federal COLA in January
  2009
• Instead, the state will lower General Fund
  support and capture the increase
• The SSI/SSP Cash Assistance Program is eliminated

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New May Revision Proposals
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• California Work Opportunity and Responsibility to
  Kids (CalWORKs) grants receive no COLA in
  2008-09 and are cut 5 on a year-over-year basis
• State contribution to In-Home Support Services
  (IHSS) workers is limited to the state minimum
  wage
• Special Fund balances of various health and
  social services programs are transferred or
  loaned to the General Fund
• The Department of Corrections and Rehabilitation
  is slated for 174 million in reductions related
  to a new parole supervision program

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State Lottery Proposal
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• Governor proposes borrowing 15 billion from Wall
  Street against future increased profits from
  State Lottery
• 10 billion of funding would go for a reserve to
  use during fiscal crisis
• 5.1 billion would be used for the 2008-09 Budget
• 1.2 billion currently for education continues,
  but is at risk
• Lottery revenue for up to 32 years would go to
  investors to repay loan
• Requires voter approval-most likely in November
  2008

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Stand-By Sales Tax
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• The Governors May Revision acknowledges the
  risks surrounding the Lottery proposal
• Voters may reject it
• It may be challenged in court
• Wall Street may not embrace it
• As a back-up plan, the Governor proposes a 1
  increase in the sales tax, which would yield
  about 6 billion annually
• The Department of Finance would determine whether
  the sales tax trigger is pulled, based on
  balances available in the RSF

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Stand-By Sales Tax
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• The sales tax would remain in effect until the
  RSF has accumulated a fund balance equal to 15
  of General Fund tax revenues (about 15 billion)
• The tax expires June 30, 2011
• The May Revision indicates that, after the tax
  expires, Californians will receive rebates equal
  to the amount of sales tax collected
• No details are available, but the Director of
  Finance suggested direct rebates to taxpayers or
  a temporary reduction in the sales tax rate

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Mandate Reimbursements
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• The January Budget contained conflicting funding
  proposals
• It provided no funding for reimbursement claims
  in 2008-09, but by appropriating 1,000 for each
  of 38 education mandates, it required school
  districts to continue to provide the services
• It provided 150 million for deferred mandate
  claims, in accordance with the terms of the 2004
  Budget Act
• The May Revision makes no change to either
  proposal

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Revenue Stabilization Fund
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• Proceeds from the Lottery borrowing would be
  deposited into a newly created Revenue
  Stabilization Fund (RSF)
• The RSF would receive the proceeds from the bond
  sale
• Transfers out of the RSF are authorized only
  during years in which General Fund revenues under
  perform the ten-year average growth rate
• This condition will be met in 2008-09
• The RSF also affects Proposition 98, although
  written details are not yet available

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Proposition 98 Funding Per Pupil
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Revenue Limits COLA and Deficits
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• The statutory COLA is 5.66 with a deficit of
  5.357, eliminating the proposed 2.4 reduction
  proposed in January
• The following includes the increases to the base
  revenue limit that are funded at zero

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Revenue Limit Deficit Factor
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Supplemental Hourly Programs 2008-09
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• May Revision includes 6.5 reduction to overall
  funding for supplemental hourly programs, but not
  all programs are equally affected
• Mandated programs Grade 7-12 CAHSEE and Grade
  2-9 Retention slight increase
• Non mandated programs K-12 Core and Grade 2-6
  At Risk take reduction for all four programs
• In addition, the May Revision attempts to spread
  the distribution of the deficit across

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Special Education
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• Good News Proposed January Cut Restored
• May Revision provides 234 million above the
  January Proposed Budget
• Reverses 6.5 cut and makes adjustment for local
  property taxes and growth
• The increased state funding also meets the
  federal maintenance-of-effort requirement for
  special education program

• Bad News No COLA
• Not funding the 5.66 COLA on the state/local
  share of funding means a loss of 26.34 per ADA

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Special Education Supplement to Base
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• Federal funding for special education is expected
  to increase by almost 13 million in 2008-09
• The Supplement to Base is estimated to be 2.15
  per ADA provided to SELPAs
• As of 2007-08, the Supplement to Base is no
  longer rolled into the statewide target rate for
  the Special Disabilities Adjustment (SDA)
• 2008-09 Budget proposes to continue this trend

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Charter Schools
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• General Purpose rates are based on statewide
  average revenue limits
• CDE will recalculate the General Purpose rates at
  each apportionment
• Final amounts could vary by 20 per ADA (or
  more)
• Categorical block grant rate reflects 6.5 cut
• Estimated 2008-09 funding rates for charter
  schools, after cuts, are

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Categorical Programs
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• January proposed cuts are restored for revenue
  limits and special education, but other
  categorical programs are not so fortunate
• May Revision continues to include, on average,
  6.5 reduction to most state categorical programs
  with no COLA
• A few exceptions
• High Priority Schools Grant Program 400 per
  student at eligible schools
• After School Education and Safety Grants same
  rate and maximums as approved in grant award
  letter
• Quality Education Investment Act rates
  according to settlement agreement

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Categorical Programs
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• It is important to note that, included among the
  programs to be cut, there are many that may
  primarily support staff
• Economic Impact Aid
• Physical Education Teacher Incentive Grants
• K-3 Class-Size Reduction
• Home-to-School Transportation
• AB 825 Block Grants
• The May Revision includes a number of proposals
  to mitigate the impact of budget reductions on
  school agency operations and, importantly, the
  ability to meet fiscal solvency requirements

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Federal Funding Update
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2008-09 Budget Assumptions
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2008-09 Budget Assumptions
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2008-09 Budget Assumptions
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• Annual Property Liability Premium of 220,430
• Total Regular Ed. FTE budgeted is 239 (based on
  5,273 students)
• Step and Column is budgeted for Certificated and
  Classified employees
• No salary increases included for any bargaining
  units
• Staffing _at_ 201 for K-3 and 311 for 4-6
• Maintain retiree benefits as they now exist
• Employer Labor Related Costs
• STRS 8.25
• PERS 9.428
• Social Security 6.20
• Medicare 1.45
• SUI 0.3
• Workers Comp. 2.068
• Health Welfare 10,236

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2008-09 Budget Assumptions
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• Utilities Increase of 15
• Funding of 32,000 for safety monitor positions
• Transfer of 267,500 toward state match for the
  Deferred Maintenance Program
• Site allocation of 32.50 per prior year CBEDS
  enrollment (will be adjusted at 2008-09 CBEDS)
• Site allocation of 5.00 per prior year CBEDS
  enrollment for Media books and supplies
• 10 days of teacher sick leave per FTE
• Custodial supplies of 280 per classroom
• Routine Restricted Maintenance to be funded at 3
  of total General Fund expenditures
• Transportation expense of 498,102

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Average Daily
Attendance
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Unrestricted General FundRevenues, Expenditures,
and Changes in Fund BalanceJune 30, 2008
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Unrestricted General Fund Revenues
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Unrestricted General Fund Expenditures
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Unrestricted General Fund Analysis of Ending
Fund BalanceJune 30, 2008
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Restricted General FundRevenues, Expenditures,
and Changes in Fund BalanceJune 30, 2008
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Restricted General Fund Revenues
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Restricted General Fund Expenditures
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General Fund Expenditures(Unrestricted
Restricted)
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District Expenditures by Function
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Child Nutrition FundJune 30, 2008
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Deferred Maintenance FundJune 30, 2008
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Special Reserve-Non Capital FundJune 30, 2008
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Special Reserve Fund For Post Employment
BenefitsJune 30, 2008
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Building FundJune 30, 2008
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Capital Facilities Fund 25-18June 30, 2008
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Capital Facilities Fund 25-19June 30, 2008
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Special Reserve-Capital Outlay FundJune 30, 2008
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Paul Ecke Central Trust FundJune 30, 2008
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Self Insurance FundJune 30, 2008
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