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Budget Crisis 08-09

Budget Crisis 08-09 . Problem #1- State Revenues. Planned on $104 billion Current estimate is $8 - $15 billion less Equals a 7 to 14% shortfall Caused by major economic downturn, poor fiscal management and legislative neglect. State Revenue Indicators.

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Budget Crisis 08-09

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  1. Budget Crisis 08-09

  2. Problem #1- State Revenues • Planned on $104 billion • Current estimate is $8 - $15 billion less • Equals a 7 to 14% shortfall • Caused by major economic downturn, poor fiscal management and legislative neglect

  3. State Revenue Indicators • Unemployment 2006 4.9%; 2007 5.9% and in 2008 7.7% • Foreclosures 2007 11,033; 2008 47,171 • Home Building down 56.2% • Tax revenues down $1 billion in last 3 months and expect to further decline

  4. Impact of Problem #1 • Governor is recalling Legislature • Expectation: • Increase sales tax • Mid year cuts = $320 to $640 per student • Equals $10 - $20 million cut to SVUSD

  5. Problem #2 - 2009-10 COLA • Originally budgeted at 5.6% • Now planning on 0% • Equals a $7.7 million revenue cut • In addition to $5 million in cuts already planned for 2009-10 • Means cutting $12.5 million in addition to any mid-year cuts

  6. What will we do to address these problems? • Reduce salary obligations through Early Retirement Plan ???? • Seeking a waiver from SBE to use Categorical carryover for unrestricted purposes ???? • Inform Bargaining Units • Form Budget Reduction Committee

  7. Addressing the problems - continued • Educate our parents and community about what we are faced with • Ultimately, without relief, we will be forced to eliminate all non-essential programs...

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