every student. every classroom. every day.

2008-09 Governor’s Budget Proposal

January 30, 2008

The Financial Impact to the Oakland Unified School

District

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Agenda

Governor’s 2008-09 Budget Proposal

• Impact on 2007-08 Budget

• Implications for 2008-09 Budget

Development

• Effect on state categorical funding in

2008-09

• Other program impact and flexibilities

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Governor’s 2007-08 Proposition 98 Minimum Guarantee Reduction

Proposition 98 is the basis by which all California school districts receive their unrestricted, General Purpose dollars.

Reduced state tax revenues forecast allows 2007-08 Proposition 98 guarantee to be reduced by $1.4 billion

Governor proposes to cut only $400 million; anticipates that amount can come from 2007-08 categorical ending fund balances.

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Governor’s 2007-08 Proposition 98 Minimum Guarantee Reduction

(Cont.)

As a safe guard all districts are currently required to plan for a current year revenue limit decrease of .5 of 1%.

The effect on OUSD’s 2007-08 revenue limit will be a reduction amount of $1.067 million.

Based on the current proposal, all unexpended OUSD 2007-08 state categorical funds will be confiscated by the state Department of Finance.

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Governor’s Proposed 2008-09 Suspension of Proposition 98

Reduces K-12 education revenue by $4 billion. The budgeted 2008-09 4.94% COLA Revenue Limit increase becomes a (2.40%) Revenue Limit deficit.

For OUSD in 2008-09 this means a total reduction in unrestricted, General Purpose dollars of $15.66M.

4.94% Inflation Increase

$6,037 per ADA

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Governor’s 2008-09 Budget Proposal: Categorical Programs

On average, every state categorical programs will be reduced by 6.5%.

For OUSD in 2008-09 this means total state categorical funds will be reduced from $103.4M to $96.6M. A total approximate reduction of $6.7 million.

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Governor’s 2008-09 Budget Proposal: Other Programs

Cuts to state Special Education funding will have a dramatic effect on the District’s current $15M encroachment.

Because of OUSD’s SELPA designation a special analysis will have to be completed. District is working with ACOE to determine the potential financial impact.

Adult Education is projected to have a net (3.46%) reduction from 2007-08 base funding.

Regional Occupation Program is projected to have a net (5.41%) reduction from 2007-08 base funding.

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Governor’s 2008-09 Budget Proposal: Other Programs (cont.)

Child Development programs should anticipate getting less in 2008-09 than received in 2007-08. Specific impact on OUSD has not been determined because of uncertainty in state program reductions.

Child Nutrition programs will have state meal reimbursements reduced by 2 cents per meal.

Instructional Materials will be reduced by 6.5% from the 2007-08 budget. This will have a major impact on textbook adoption purchases.

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Governor’s 2008-09 Budget Proposal: Facilities and Cash Flow

A new state facility bond is proposed to be on the November 2008 ballot (AB100 sponsored by Mullin). In the bond $9.087B, which earmarks $6.4B for K-12 facilities.

Currently the June ADA apportionment is paid in July. The Governor proposes to move the July payment to September. The District is exploring opportunity to obtain a July 1st Tax & Revenue Anticipation Note (TRAN).

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Governor’s 2008-09 Budget Proposal: Categorical and Program

Flexibilities

Budget proposal includes adding additional categorical transfer flexibility for Mega-Item programs (minimal impact), federal dollars (up to 30% transfer to/from Title 2, Safe & Drug Free Schools, and Enhancing Education Technology), and AB825 programs;

The Governor has proposed taking action to delay timelines for textbook adoption. For OUSD this means delaying math and English textbook ordering.

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Governor’s 2008-09 Budget Proposal: Revised Multi-Year Budget

ProjectionsData below accounts for all known, proposed changes to date.

See following slide for reserve designations.

1st Interim Recap, General Purpose Only

2007-08 2008-09

Beginning Fund Balance $18,276,299 $18,154,326

Revenues $232,379,063 $234,813,352

Expenditures $232,501,036 $234,202,720

Net Increase/(Decrease) ($121,973) $610,632

Ending Fund Balance $18,154,326 $18,764,958

Governor’s Proposed Reduction ($1,067,000) ($15,565,800)

Enrollment Adjustments (2008-09 Only) $3,037,174

Total Net Adjustments ($1,067,000) ($12,528,626)

Revised Ending Fund Balance $17,087,326 $4,558,700

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Governor’s 2008-09 Budget Proposal: Revised Multi-Year Budget

Projections1st Interim Recap, General Purpose Only 2007-08 2008-09

Revised Ending Fund Balance $17,087,326 $4,558,700

Projected Required 2% Reserve for Economic Uncertainty

$8,711,731

Projected Audit Finding Designations $3,500,000

Projected Declining Enrollment Contingency $3,500,000

Total Minimum Needed Ending Fund Balance $15,211,731

Total Minimum Expenditure Reduction Needed

$10,653,031

Additional Safety Net Required $2,500,000

TOTAL REDUCTIONS NEEDED $13,153,031Please note that the 2nd Interim financial report is scheduled to be presented at the March 12th Board meeting. This will be the most up-to-date, official District financial report.