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2009/10 Budget Development State Adopted Budget

LODI UNIFIED SCHOOL DISTRICT Business Services. 2009/10 Budget Development State Adopted Budget. Board Meeting March 3, 2009. Prepared by: Dr. Cathy Nichols-Washer Mr. Douglas Barge & Staff.

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2009/10 Budget Development State Adopted Budget

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  1. LODI UNIFIED SCHOOL DISTRICT Business Services 2009/10 Budget Development State Adopted Budget Board Meeting March 3, 2009 Prepared by: Dr. Cathy Nichols-Washer Mr. Douglas Barge & Staff Y: Business Services/Budget/2009/10/Adopted/Meetings/C02-23-09/2009-10 State Adopted Budget C02-19-09

  2. Executive Summary • State will be increasing taxes • State will be reducing allocations to education • State will be borrowing to make it all happen • This is another one of those risky State budget plans • Federal resources may help • Revenue Limit resources have improved over previous reporting but are still down $482/student this year alone • Categorical resources have lost ground this year and next • The District is still facing some difficult decisions i.

  3. Table of Contents Description Page No. • Introduction • State Funding Resources • The Budget Cuts / Revenue Limits • State Categorical Resources • Building a Strategy • Closing Remarks • Appendix 1 2 - 4 5 - 6 7 - 18 19 – 20 21 A ii.

  4. Introduction • On the morning of February 19, 2009, the State Legislature finally adopted a budget plan covering the next eighteen months • The plan covers 2008/09 and 2009/10 • It calls for tax increases to provide more revenues for the State, borrowing, and budget cuts • But before we get too excited: • The voters will be given a say • Combining both State and Federal resources will be difficult with the number of unknowns still remaining 1

  5. Resources for the State • $14.4 B in “Temporary” (24 months) revenues • Increase sales tax by one (1) cent • Increase Vehicle License Fee to 1.00% • Increase State income tax by 0.25% • Reduction of the dependent care tax credit • Income tax surcharge of 2.50% • Could be extended to 2012/13 if voters approve spending cap change • Special election is scheduled for May 19, 2009 2

  6. State Borrowing • $6 B in Revenue Anticipation Warrants (RAW) • Three conditions must exist to sell RAWs • The State must have a sustainable, balanced budget with all required statutory changes enacted prior to selling the RAWs • The must have a plausible plan for repaying the RAWs in the subsequent year • There will have to be legislation enacted prior to the sale of the RAWs that protects the RAW holders • $5 B from Lottery securitization • $0.4B Transfers and loans from special funds 3

  7. Education Cuts for 2008/09 • Reduces current year Prop 98 appropriation • Program reductions $2.3 B • Previously funded COLA (.68%) • Remaining • Half Revenue Limit • Half Categorical Programs 4

  8. The Budget CutsRevenue Limits iii.

  9. COLA 4.98% 13.094% .68% COLA Cut 2.63% Cut 4.57% New info. Base Base Base Base K-12 Revenue Limits Governors Proposed COLA 5.02% Original Final COLA 4.98% COLA 5.66% COLA 4.98% .68% COLA .68% COLA Cut 2008/09 Cut .96% 2008/09 Adopted Adopted 2008/09 2008/09 Budget Adopted 2009/10 * Net result is a permanent loss in on-going funding 5

  10. 13.094% 16.16% Cut 2.63% New info. Base Base Base K-12 Revenue Limits COLA 5.02% COLA 5.02% COLA 4.98% COLA 5.66% COLA 5.66% .68% COLA Cut 2008/09 Cut 2008/09 Cut .96% Cut 2.52% Adopted 2008/09 Governors2009/10 Adopted 2009/10 * Net result is a permanent loss in on-going funding 6

  11. State Categorical Resources iv.

  12. New Budget New Budget New Budget Adopted Adopted 15% 15% 4.9% 4.9% 2009/10 2009/10 2009/10 2008/09 2008/09 State Categorical Funding Adopted Flex 2008/09 Tier I Tier II Tier III 7

  13. Tier I – No Funding Cuts • No program flexibility & No ability to waive statutory requirements • Programs are: • Economic Impact Aid (EIA) • K-3 Class Size Reduction • Prop 49 After School Programs (Bridge) • Special Education • Quality Education Investment Act (QEIA) • Transportation • Child Nutrition • Child Development 8

  14. Tier II – Funding Cuts • Funding will be reduced 15% • No program flexibility • Must be operated under statute • Programs current available to Lodi USD: • Ag – Vocation Education • Charter School Facilities Grant • English Language Acquisition Program • Partnership Academies • State Testing 9

  15. Tier III – Funding Cuts • Funding will be reduced 15% • 100% flexibility – Can be used for any purpose • 2008/09 Fiscal Year • Next four years • Programs are: • GATE • High Priority Schools & II/USP (*) • CSR 9th Grade • Deferred Maintenance • Instructional Materials Fund * Not continued into 2009/10 10

  16. Tier III – Funding Cuts • Programs are (continued): • Instructional Improvement Block Grant • Teacher Credentialing Block Grant • Professional Development Block Grant • Pupil Retention Block Grant • School Safety Consolidated (Carl Washington • School & Library Improvement (SIP) • Administrator Training Program • Adult Education • Arts & Music Block Grant 11

  17. Tier III – Funding Cuts • Programs are (continued): • California High School Exit Exam (CAHSEE Intervention) • Cal-Safe • Certificated Staff Mentoring Programs • Child Oral Health Assessment • Community Based English Tutoring (CBET) • Community Day Schools • Counselors, Grades 7-12 (SB 1802) • National Board Certification • Peer Assistance and Review • Regional Occupational Center/Programs 12

  18. Tier III – Funding Cuts • Programs are (continued): • Professional Staff Development (SB 472) • Specialized Secondary Programs • Supplemental Hourly Programs • Charter School Categorical Block Grant 13

  19. 20.5 No Penalty Prior No Penalty? 20.0% 40.0% 80.0% K-3 Class Size Reduction Student/Teacher Up To New 21.0 5.0% 21.5 10.0% 21.9 10.0% 22.0 15.0% 25.0 20.0% Over 25.0 30.0% * Funding will be based on a class size of 20 students. District would not receive any funding for excess students. 14

  20. Categorical Sweeps • Ending Fund Balances as 6/30/08 from some programs: • Tier III programs only • Does not apply to: • Economic Impact Aid • Instructional Materials • Special Education • Quality Ed. Investment Act • California High School Exit Exam • Supplemental Instruction • Transportation 15

  21. Other Flexibility • Routine Maintenance Reserves • Only required to set aside 1% vs. 3% of the General Fund • For 2008/09 • Next Four years • Program would have to be built back up over time • Deferred Maintenance • No local contribution required (0.5%) for 2008/09 • Next Four years 16

  22. Education Cuts for 2009/10 • Estimated 5.02% statutory COLA would not be funded • Reduces Prop 98 spending levels by $530 M • Half Revenue Limit (a total deficit of 13.094%) • Half Categorical Programs (4.90%) • Tier II & III Programs • Special Education (SELPA) will be increased by $10.92 per 2008/09 P-1 ADA • Eliminates High Priority Schools Grant Program 17

  23. Unrestricted Support Title I Flexibility Federal Stimulus How much will be available to help District directly? Special Education • Lots of questions • How much? • When will it arrive? • Is there flexibility? • What kind of projects? • Can we reduce District support to Special Ed.? • Can we use dollars to help with class sizes? • Can we use Title I to help with class sizes? Title I School Improvement Grant State Bailout Federal Funding * No School Renovation, Repair resources per SI&A 18

  24. Building a Strategy v.

  25. Creating Capacity • Capacity is the ability to retain staff and programs • Categorical capacity may be possible after considering the impact of the reductions in Tier III • Where is there other capacity: • JAESC Reductions Funded with Categorical Resources • Deferred and Routine Restricted Maintenance • Federal Support for Special Education • Title I – New Federal Dollars • Prior Year Sweeps • K-3 Class Size Reduction Penalties 19

  26. Addressing Suggestions • The Food Service Program lives within its income subventions • Cutting the program would cause a loss of revenues to the General Fund making our problem worse • Reducing the number school days below 180 days would be catastrophic financially • According to the California Department of Education, Education Code requires that a penalty be applied to the State funding allocations for a drop in days from 180 to 175 • If the drop in days continued into the next year there would be a total loss of State funding • Any drop below 175 days would cause a total loss of State funding • The Bridge Program is a voter approved State program • This program will not help the District financial situation if the program were eliminated • Quality Education Investment Act (QEIA) results from a settlement of a lawsuit between CTA and the State • If the District choose to remove itself from the program 100% of the State funding would have to be returned 20

  27. Closing Remarks • The next step in the process is to calculate the impact of the new State budget plan on our District • Examine the use of the flexibility options provided • See how the Federal flexibility folds into a strategy for building a balance budget • Rolling that strategy into our process and timelines • We expect to bring that work back to the Board at the next study session • Finally, cash flow is still a problem 21

  28. The End/Beginning vi.

  29. Appendix • State Ballots • Timelines v.

  30. The May 19 Ballot • Proposition 1A • This measure will securitized the Lottery • Take school out of the Lottery & allow the State to sell bonds • Schools will see an increase in Prop 98 Funding to accommodate the loss of Lottery revenues • Proposition 1B • State spending cap • Proposition 1C • Education funding for the maintenance factor A1

  31. The May 19 Ballot • Proposition 1D • Allows the State to divert the use of Prop 10 monies • Proposition 1E • Allows the State to divert the use of Prop 63 monies A2

  32. Board report on State adopted budget plan Superintendent’s Budget Advisory Committee (SBAC) meeting Board report on the Impact to the District of the State adopted budget SBAC meeting SBAC meeting SBAC meeting – Recommendation to the Supt. Board Meeting - Superintendent recommendations State’s May revisions to the budget assumptions Board Meeting - Final adjustments to the budget Board Meeting – Budget is adopted 3/03/09 3/04/09 3/09/09 3/11/09 3/18/09 3/25/09 4/07/09 Mid-May May June Timelines Events Dates B1

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