Governor’s 2010-11 Budget Announcement January 20, 2010 Richard Nicoll, Ph.D., Superintendent Bryan Richards, Director,

1. Mt. Diablo Unified School District Governor’s 2010-11 Budget Announcement January 20, 2010 Richard Nicoll, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services

2. STATE CAPITOL

3. State Fully Funds COLA! • However, the COLA is NEGATIVE. • That means a 0.38% DECREASE in funding; ($24) per ADA (which works out to about ($19.59)/ADA when deficited) or ($636,226) • Additionally, we have to subtract the positive COLA previously projected of $848,666 • Total effect of negative COLA is $1.5M

4. “One Time” Deficit to Continue! • This year we have a one-time additional deficit of $252.83 per 2008-09 FUNDED ADA (2007-08 actual P-2 ADA) or about $254.06 per current funded ADA • Starting next year it will become ongoing and be $201 per current year funded ADA • This deficit is to be applied to “administrative” costs. Unclear how districts such as MDUSD that have already cut administration will be affected by this, nor is “administrative” defined in the proposal.

5. Declining Enrollment Steepens! • At adoption we projected a decline of 184.23 ADA • At CBEDS we adjusted downward by 471.01 ADA to a decline of 655.24 ADA due to enrollment decline • At P-1 we are actually down 719.95 ADA so we have projected the P-2 ADA downward again by an additional 64.71 ADA • We are now down 2.17% from prior year

6. Funded Revenue Limit 2009-10 vs. 2010-11 Graph courtesy of School Services of California, Inc.

7. 2009-10 K-12 Revenue Limit – MDUSD *0.81645 = 1 - .18355 (deficit factor) Chart courtesy of School Services of California, Inc.

8. 2010-11 K-12 Revenue Limits – MDUSD *0.81645 = 1 - .18355 (deficit factor) Chart courtesy of School Services of California, Inc.

9. The 10/11 revenue limit cut increases from $1,175 to $1,366/ADA

10. Piling it on (what has changed since 1st interim?) • Loss of COLA/funding negative COLA $1.5M • Additional student attendance decline $0.3M • Additional cut of $201/ADA $6.5M • Total decline in revenue limit $8.3M • Decline in other State revenues $0.3M • Total State revenue decline $8.6M Note: All of these cuts are ONGOING

15. Multi Year Projection • Undesignated + Tier 3 @ 6/10 $13,279,341 • Operating Deficit 2010/11 (21,821,373) • Adjustment in 2% reserve 26,853 • Unappropriated Balance 6/11 ( 8,515,179) • Operating Deficit 2011/12 (27,059,026) • Adjustment in 2% reserve 67,882 • Unappropriated Balance 6/12 ($35,506,323)

16. $35,506,000 across 2 years is only the start to fixing the real problem • Unappropriated Balance 6/12 ($35,506,323) • Projected Deficit in 2012/13 ($24,431,947) • Unappropriated Balance 6/13 ($59,924,712) • Projected Deficit in 2013/14 ($28,170,814) • Unappropriated Balance 6/14 ($88,182,084) • Projected Deficit in 2014/15 ($27,781,521) • Unappropriated Balance 6/15 ($115,933,241) Average deficit is $25,852,936 per year

17. How much less must we spend? • Enrollment declines projected to continue through 2014 at rates between 0.71% and 1.26% per year • We must decrease ongoing annual spending by a minimum of $25.85M by 7/1/2010 for the 2010/11 school year OR, • Cut at least $35,506,323 over two years by 2nd interim and plan for even deeper cuts later to solve the rest of the structural deficit. However, the amount of backlog will grow at over $9M per year • As promised, the deficits got bigger when the State cut more

18. What next?More fromSacramento • Governor’s Budget January 8 & emergency session declared to put budget on agenda • School Services update January 12 • LAO will issue review of budget to legislature • State budget talks begin in legislature

19. Meanwhile back in Concord… • We must adopt a balanced budget by June 30th • Budget Calendar will come to board January 26th • We must plan an additional contingency if the State doesn’t fund the COLA when it returns to a positive number in 2011-12 (an additional $3,020,000 ongoing cut)

20. Thank you and tune in next time for… STATE CAPITOL