2003-05 Governor’s Budget

1. 2003-05 Governor’s Budget Department of Education K-12 School Funding Linda Ames Department of Administrative Services Budget and Management Division March 25, 2003

2. 2003-05 Governor’s Budget State School Fund Budget Comparison

3. 2003-05 Governor’s BudgetGeneral Fund & Lottery Fund Expenditures ($11,404 million)

4. 2003-05 Governor’s BudgetDepartment of EducationGeneral Fund and Lottery Funds

5. 2003-05 Governor’s BudgetState School FundTotal State Resources: $5,051.4 Million

6. 2003-05 Governor’s BudgetK-12 School FundingState and Local Resources: $7,319.4 Million

7. 2003-05 Governor’s BudgetK-12 School FundingState and Local Resources: $7,319.4 Million

8. 2003-05 Governor’s Budget School Funding as Percent of State Resources Note: “State Resources” include education lottery bonds, MUPL, Education Stability Fund, as well as General Fund and Lottery Funds.

9. 2003-05 Governor’s Budget State School Fund by Fund Type Includes $211 accrued resources as General Fund in 2001-03 through the Sixth Special Session.

10. 2003-05 Governor’s Budget State School FundReductions in 2001-03 • $112 million – Eliminate School Improvement Fund. • 2002-03 School Year. • $20 million – 2002-03 School Year. • $95 million – As a result of Ballot Measure 28 failing. • $46 million – Implemented January 2003 by Administrative Rule. • $8 million – Estimated SSF portion of MUPL Shortfall. • Total Reductions of $282 million. • -5.4% of biennial state funding. • -10.6% of state funding for 2002-03 school year. Note: Does not include a $17.7 million reduction that was offset with additional Common School Fund resources.

11. 2003-05 Governor’s BudgetState School FundChanges to 2001-03 Funding

12. 2003-05 Governor’s Budget State School Fund • Continues all reductions through the Fifth Special Session. • All cuts are in 2002-03, so are doubled in 2003-05. • Reduction of about $500 million. • Eliminates all salary increases [Cost-of-living adjustments (COLAs), steps], increases in health benefits, and inflation on Services and Supplies. • Reduction of about $550 million. • Funds student growth and PERS increase. • Adds back $100 million. • Priority of restoring school days/programs. • Within limited resources, supports education as high priority. • Funds current local option equalization grants ($550,000).

13. 2003-05 Governor’s Budget Budget Process for 2003-05 School Revenue Forecast Committee • Executive Order 99-15. • Second biennium this process has been used. • Data-based process to estimate resources needed for current program level. • Provides forecast information to school districts for planning purposes. • Membership includes technical staff as well as education stakeholders.

14. 2003-05 Governor’s Budget Budget Process for 2003-05 School Revenue Forecast Committee • Develop forecasts: • Student Growth. • Property taxes and other local revenues. • Growth in Personal Service costs, including COLA’s, steps, turnover, increases in health benefits and PERS. • Major improvement this biennium: • Department of Education developed model for Personal Services costs. • Model incorporates actual teacher salary data, current benefit costs, and retirement data. • “Current program” costs with no cuts: $6.0 billion state funds. • “Current program” costs with cuts through the Fifth Special Session: $5.5 billion state funds.

15. 2003-05 Governor’s BudgetBiennial General Operating Revenue(Dollars in Millions)

16. 2003-05 Governor’s BudgetState School FundState Funding by Year Note: Chart does not include 2001-02 School Improvement Fund of $108 million.