Governor’s 2009-2010 Budget

Ramona Unified School District

January 22, 2008

Where to Begin…

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To Start … California’s budget deficit has grown to over

$40 Billion Both the Governor and the Legislature have

advanced proposals Neither proposal has been acceptable to the

other side

California in Fiscal Crisis Financing structure which is dependent on

increasing revenues of sales and personal income taxes Creates up and down budget years 1% of the top California earners contribute 50% to the

State revenues through personal income, of which capital gains tax is a large portion

The failure of prior budgets to come to terms with the structural budget gap

Always hoping for a good year to grow out of the problem Hope is not a strategy

Consequence The arrival of this recession has hit

California extremely hard Weakened by past budget debt loads Most of the tools and gimmicks are gone California has the worst credit rating of the 50

States

Governor’s Proposal: 2008-2009 Reduction of .68% funded COLA Additional reduction of 4.5% to the revenue limit No categorical program reductions Prior-year categorical ending balances transfers Current-year categorical flexibility Reductions in deferred maintenance Reduce mandatory State reserve requirements by half Deferral of April revenue limit and CSR payments until

July 2009

Governor’s Proposal: 2008-2009 Governor’s budget is based upon:

Securitization of the California Lottery Temporary increase in sales tax of 1.5% Revenue Anticipation Warrant (RAW)

Borrow funds in July 2009 and pay them back in June 2011

If these do not happen or the dollars are not realized, the shortfall will need to be made up

Legislature’s Proposal: 2008-2009 Reduction of .68% funded COLA Categorical program elimination

Instructional materials, professional development

Categorical program reductions SLIP

Prior-year categorical ending balances transfers

Reductions in deferred maintenance

Reductions to RUSD: 2008-2009

Reduction in Revenue Limit funding for 2008-2009

$1,942,000

Governor’s Proposal: 2009-2010 Continues the theme of the proposed 2008-

2009 mid-year reductions No COLA increase of 5.02% Additional reduction to revenue limit of 2.52% Ability to transfer State categorical dollars to

the unrestricted fund to offset reductions Lifting of statutory requirements for most

categorical programs

Governor’s Proposal: 2009-2010 Elimination of deferred maintenance match Reduce mandatory State reserve

requirements by half Proposes providing permanent categorical

flexibility

Reductions to RUSD 2009-2010 Revenue Limit for 2009-2010

Takes into account declining enrollment Reductions to 2008-2009 must be taken into

account ($1,941,000) So figure is larger than a 2.52% reduction

2008-09 and 2009-10 K-12 Revenue Limits

2008-09 Budget Act 2008-09 Proposed Governor's Budget 2009-10 Proposed Governor's Budget

Funded

Funded

Funded

4.565%

5.02%

5.66%

4.565%

2.515%

5.66%

0.68%

5.66%

Cut

COLACOLA

2009-10 COLA

2008-09 COLA

2008-09 Cut

2009-10 Cut

C-14

Reductions to RUSD: 2009-2010

Reduction in Revenue Limit funding for 2009-2010

$3,814,000

Continue Increasing Operating Costs

2009-2010 Step and column advancement

2% increase $750,000

Health and Welfare Increases 14% increase $650,000

Summarizing the Numbers 2008-2009 mid-year reductions

$1,942,000

2009-2010 budget reductions $3,814,000

2009-2010 Increased costs $1,400,000

Total 7,156,000

Cash The State continues to be in a cash flow

crisis The State runs low on cash in February and

March (before the April taxes) and then during the summer months

Governor’s proposal is to defer payments to school districts to later months Continues to pass on the State’s cash shortages

to school districts

RUSD response to Legislators Support proposals which generate

increased revenue for K-12 public education

Support the Governor’s proposals centered on flexibility in categorical programs

Make every effort to approve mid-year cuts and a 2009-2010 budget quickly

RUSD Response Withhold an additional 25% of site and

department budgets Slowed process for filling open positions --

some have been left unfilled Offered an early retirement incentive to

teachers Issued a freeze on spending from several

categorical budgets

RUSD Response Identifying other reductions, savings programs, based

upon the recommendations from School Services of California and San Diego County Office of Education

Board will be kept apprised of the progress of the inclusive budget reduction process District Administration RTA, CSEA Board

Ongoing information will be distributed to the Board Tentative list of reductions to the Board at the February

Board meeting

RUSD Response Priority of Reductions

Support all children in their quest to excel everyday in every classroom

Maintain as much of our existing educational programs and support services as possible

Protect the employment of as many school employees as possible

Preserve the rich fabric of our local community schools and parental support

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In Conclusion The end is not here for Ramona Unified

School District

Acknowledgments

Governor’s Proposal for the 09-10 State Budget School Services of California, Inc.