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Garvey School District

Garvey School District. 2012-13 May Revise May 31, 2012. Economic Trends. California has the 3 rd highest unemployment rate in the U.S., (11%), trailing only Nevada and Rhode Island. National average is 8.9% Governor’s budget estimates that employment won’t return to 2007 level until 2015.

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Garvey School District

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  1. Garvey School District 2012-13 May Revise May 31, 2012

  2. Economic Trends • California has the 3rd highest unemployment rate in the U.S., (11%), trailing only Nevada and Rhode Island. • National average is 8.9% • Governor’s budget estimates that employment won’t return to 2007 level until 2015.

  3. Economic Trends (continued) • No long-term plan in place to control federal deficits. • Continuing uncertainty in Europe could lead to another global downturn.

  4. Major Provisions of Governor’s May Revise • Projected Budget Deficit has increased from $9.2 Billion in January to $15.7 Billion in May. • Governor Brown proposes to close the increased gap with cuts to programs besides education. • All hope for a balanced budget rests on the passage of the Governor’s tax initiative in November.

  5. Impact on K-12 Education • 3.24% COLA is not funded. • Revenue Limit deficit factor rises to 22.27% • State categorical programs receive flat funding. • Federal funding may fall 9.1% due to cuts scheduled to take effect in January; deficit committee failed to make long-term deal.

  6. Best Case Scenario • Even if the tax increases are approved by voters, there is no additional funding for education. • The new tax revenue reduces the State’s General Fund contributions to Prop 98 on a dollar-for-dollar basis.

  7. Worst Case Scenario • The governor’s initiative does not qualify for the ballot. We should know this by June 28. • The governor’s initiative does not receive a simple majority of votes. • In either case, ongoing Revenue Limit cuts of $441/ADA will take effect.

  8. Calculating the Cut • $441 x 5222 (2011-12 P-2 ADA) = $2,303,096 • Our 2nd Interim Report was Qualified based on a potential $370/ADA Revenue Limit cut. • The increased set aside between $441/ADA and $370/ADA is $370,793.

  9. 2012-13 Revenue Limit Funding

  10. Closing the Gap • The layoff of 20 certificated employees will save the Unrestricted General Fund $961,259 in both 2012-13 and 2013-14. • After these savings, we will still face a gap of $3,227,117 that we must close by the end of 2013-14 to be considered minimally solvent.

  11. Closing the Gap (continued) • As 94% of the Unrestricted General Fund is spent on salary and benefit costs, we are seeking to negotiate savings with both associations in these areas. • Each Furlough day would save the Unrestricted General Fund $118,902/year from GEA, CSEA and Management.

  12. 2011-12 Unrestricted General Fund Budget

  13. Closing the Gap (continued) • Each 1% salary reduction would save the Unrestricted General Fund $257,639/year from GEA, CSEA and Management. • A $9500 annual cap on health benefits would save the Unrestricted General Fund $486,074/year from GEA and CSEA. The cap is already in place for Management.

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