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Encinitas Union School District

Encinitas Union School District. 2010-11 Proposed Budget. Governor’s Budget 2010-11. 1. The May Revision is, by statute, the Governor’s last chance to provide his Budget proposals to the Legislature It may differ from January only slightly, or be dramatically different

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Encinitas Union School District

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  1. Encinitas Union School District 2010-11 Proposed Budget

  2. Governor’s Budget 2010-11 1 • The May Revision is, by statute, the Governor’s last chance to provide his Budget proposals to the Legislature • It may differ from January only slightly, or be dramatically different • Overall, the State Budget situation has gotten worse • Federal dollars, upon which the January Budget depended, have been slow in coming • Inaction by the Legislature has caused planned savings to slip away • Costs of some programs have risen more than anticipated • Revenues are still falling below the state’s already low forecasts • Education was protected somewhat, relative to other programs, in January • In May, education continues to be better protected than other programs • It was anticipated that the best we could hope for was no new cuts, and that is, for the most part, what it’s been proposed

  3. Governor’s Budget 2010-11 2 • 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 cuts • But there is no “free ride” – the nearly $1.5 billion taken from education in January remains unrestored • Child care takes a huge cut • Social and health programs that serve K-12 students and their families are hit even harder • California Work Opportunities and Responsibility to Kids (CalWORKs), which is California’s main avenue to welfare payments, is on the chopping block • The Budget reflects two major unresolved problems: • California’s finance system serves the state poorly in both good and bad times • The current economic woes remain unresolved

  4. Governor’s Budget 2010-11 3 • Proposition 98 continues to provide little short-term protection • The Proposition 98 guarantee continues to fall and is therefore technically “overfunded” • Education funding, at this point, is totally at the discretion of the state • In the longer term, Proposition 98 benefits education • Restoration of the base is required • During the good years ahead, Proposition 98 will drive higher levels of • funding • But until then, California faces a continuation of difficult budget years

  5. 2010-11 Governor’s Proposal – May Revise 4 • For the most part, the May Revision contains no further cuts to K-12 education • Cuts proposed in January remain • Targeted proposed administrative cut is eliminated • Cuts to child care eliminate subsidized slots for 142,000 children • No new federal dollars • No new taxes are proposed • Major additional cuts to the noneducation portions of the Budget are proposed • The Legislature is expected to have great difficulty voting for the choices before them

  6. Major May Revision Proposals 5 • 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 this gap without raising taxes • $12.4 billion in cuts • $3.4 billion in additional federal funds • $3.4 billion in borrowing fund shifts, asset sales, and surcharges • A few programs are proposed for increases from the January Governor’s Budget: • Restores $140 million for state parks • Restores $46 million for Cal Grants • Withdraws proposal to cut $112 million for University of California (UC) and California State University (CSU) enrollment growth

  7. Major May Revision Proposals 6 • Program cuts make up the majority of the Governor’s May Revision proposals, including: • $1.1 billion in savings from the elimination of CalWORKs, the state’s • welfare program for the poor • $637 million in savings from cuts to the In-Home Support Services program for the disabled • $750 million in savings from Medi-Cal, the state’s primary health care 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

  8. Potential Issues to the May Revised Budget Proposal 7 • In January, there were several major risks to the Governor’s Budget proposals: • Federal funds – no guarantee that $6.9 billion could be secured • Voter approval – required for fund shifts • Economy and revenues – the economy and revenues could underperform forecasts • Some of these risks have in fact materialized: • Only $3.4 billion in federal funds are expected to be received • Fund shifts requiring voter approval will not be placed on the ballot • Current-year revenues have fallen short by $1.6 billion

  9. Potential Issues to the May Revised Budget Proposal 8 • The May Revision, if enacted as proposed, contains other – but equally significant – risks • Court challenges – rebenching Proposition 98, elimination of CalWORKs, state worker pay cuts, health care reductions, and other cuts could face court challenges • Late Budget – a late Budget would delay implementation of program reductions, resulting in the loss of budgeted savings • Economic and revenue risks – the state and national economies face the possibility of a “double dip” recession, especially in light of the turmoil in overseas economies • These risks in turn could threaten California’s access to the capital markets, pushing borrowing costs even higher

  10. Revenue Limit Funding 9 • Base revenue limit (BRL) funding under the May Revision would receive the following adjustments: • Funding for growth and a “fully funded” statutory cost-of-living adjustment (COLA) of -0.39%, essentially unchanged from the -0.38% estimate in January • No change in the deficit factor from the Governor’s January Budget Proposal • 18.355% for K-12 school districts • To implement the $1.5 billion cut to revenue limits, the DOF, was considering a 3.85% reduction to each district’s undeficited revenue limit

  11. Revenue Limit – Without Deficit 10

  12. Special Education 11 • The May Revision provides a fully funded negative COLA of -0.38% for special education (AB 602) on the state share of funding • Growth is funded at $3.6 million, or $463.67 per ADA • There are several proposed adjustments for 2010-11, including: • $1.1 million decrease in ongoing federal aid (technical adjustment) • $634 million decrease in one-time American Recovery and Reinvestment Act (ARRA) funding • $65 million remains in the May Revision for the Behavior Intervention Plans on the mandate settlement • Will add approximately $10.92 per ADA to AB 602 base • However, legislative action is required before funding will occur

  13. Flexibility Opportunities Continue 12 • The flexibility options introduced in 2008-09 continue without changes • 42 Tier III flexible categorical programs • Including suspension of deferred maintenance match requirements and instructional materials adoption timelines • Relaxation of K-3 Class-Size Reduction (CSR) funding penalties • Lowering of reserve for economic uncertainty requirements • Shorter school year • The May Revision proposes no changes to existing flexibility – nor does it offer answers to questions about the future of flexibility • Tier III flexibility continues through 2012-13 • K-3 CSR funding penalties remain relaxed through 2011-12

  14. Recap of Flexibility Plus Updates – Tier III Categorical Programs 13 • Funding for 42 programs are permitted to be shifted to any other education purpose as of 2008-09 through 2012-13 • In addition, SBX3 4 stated that a public hearing is required as a condition of exercising the allowed flexibility. The following programs and amounts will be applied toward the District’s obligation for the “Fair Share” repayment. These Tier III Programs are as follow: • Deferred Maintenance $186,043 • Physical Education $ 87,710 • Arts & Music Block Grant $ 27,356 • Gifted & Talented (GATE) $ 13,909 • State Instructional Materials – IMFRP $300,940 • Peer Assistance & Review (PAR) $ 7,296 • Math & Science Staff Development $ 26,973 • Teacher Credential Block Grant $ 16,974 • Staff Professional Development $ 39,167 • Targeted Instruction (SLIP Supplemental) $ 97,393 • School & Library Block Grant (SLIP) $179,893 • English Language Acquisition (ELAP) $ 8,104 • Community Based Tutoring $ 6,640

  15. Federal Budget Proposals 14

  16. Deferrals 15

  17. What are the Budget Assumptions for EUSD for 2010-11? 16

  18. 2010-11 Key Budget Assumptions 17 • Following are key budget assumptions for 2010-11 based on the Governor’s Budget:

  19. 2010-11 Key Budget Assumptions 18

  20. 2010-11 Key Budget Assumptions 19 • Annual Property Liability Premium of $254,242 • Total Regular Ed. FTE budgeted is 226 • Step and Column is budgeted for Certificated and Classified employees • No salary increases included for any bargaining units • Staffing @ 20:1 for K-1, 22:1 for 2nd -3rd, and 31:1 for 4-6 • Maintain retiree benefits as they now exist • Employer Labor Related Costs: • STRS 8.25% • PERS/PERS Reduction 13.02% • Social Security 6.20% • Medicare 1.45% • SUI 0.72% • Workers Comp. 1.802% • Health & Welfare $10,680

  21. 2010-11 Key Budget Assumptions 20 • Utilities Increase of 12% • Funding of $37,500 for safety monitor positions • State Funding of Deferred Maintenance of $186,043. District match will be suspended for one more year • Site allocation of $34.50 per prior year CBEDS enrollment (will be adjusted at 2010-11 CBEDS) • Site allocation of $5.50 per prior year CBEDS enrollment for Media books and supplies • 10 days of teacher sick leave per FTE • Custodial supplies of $325 per classroom • Routine Restricted Maintenance to be funded at 2.5% of total General Fund expenditures if district match toward Deferred Maintenance Fund is suspended for one more year • Transportation expense of $487,666

  22. Average Daily Attendance 21

  23. Unrestricted General FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 22

  24. Unrestricted General Fund Revenues 23

  25. Unrestricted General Expenditures 24

  26. Components of the Ending Fund BalanceJune 30, 2010 25

  27. Multi Year Projection 26

  28. Multi Year Projection 27

  29. Restricted General FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 28

  30. Restricted General Fund Revenues 29

  31. Restricted General Fund Expenditures 30

  32. General Fund Expenditures(Unrestricted & Restricted) 31

  33. District Expenditures by Function 32

  34. Child Nutrition FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 33

  35. Deferred Maintenance FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 34

  36. Special Reserve – Non Capital FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 35

  37. Special Reserve - Post Employment Benefits FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 36

  38. Capital Facilities FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 37

  39. Special Reserve – Capital Facilities FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 38

  40. Paul Ecke Central Trust Fund Revenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 39

  41. Self Insurance FundRevenues, Expenditures, and Changes in Fund BalanceJune 30, 2010 41

  42. July July August August Who Knows? Who Knows? Questions

  43. Thank you

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