upland unified school district upland unified school district charting a safe course during a state...
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UPLAND UNIFIED SCHOOL DISTRICTUPLAND UNIFIED SCHOOL DISTRICT
Charting a Safe Course During a State Fiscal
Crisis
STATE AND FEDERAL BUDGET UPDATESPresented by
Gary Rutherford, Ed.D.
Superintendent
February 24, 2009
Following a long delay, the 2008-09 and 2009-10 state budget package finally came together amidst a whirlwind of deal-making and political drama
Budget bill language has only recently become available – our initial analysis is derived from briefing with legislative staff, budget language and analyses from state fiscal consultants
The information contained in this report is subject to further clarification as information becomes available
OVERVIEW AND DISCLAIMERS
Even with a budget package finally in place, the state’s financial condition remains critical. The structural problems at the state level have not been addressed ($11 billion in borrowing, over-stated revenue projections, depends on voter approval).
Factors education leaders will continue to consider: State’s credit rating is at junk bond status State revenues are projected to continue
dropping through 2009 and into 2010 K-Adult Education will experience historic
mid-year and budget year reductions If revenues continue to drop, additional 2009-
10 reductions are possible We are monitoring cash flow status on a
weekly basis We may have a clearer picture by May Revise
THE STATE OF THINGS
Adopted budget is a two-year package: 2008-09 mid-year K-Adult reductions and
deferrals 2009-10 reductions and deferrals
Lowers the Prop 98 funding level in the current and budget years
Requires voter approval of five special election proposals All must pass in order for the plan to hold
together One includes future restoration of Prop 98
maintenance factor (Prop 1C) Special election scheduled for May 19, 2009
THE BUDGET “CORRECTION” PACKAGE
Reduces current year Prop 98 funding by more than $6 billion – via mix of reductions, deferrals and re-designation of funds
2008-09 funding cuts to K-12 = $1.9 billionEliminates the .68 COLA (no COLA for 2008-09)50% from revenue limits (about $160
per ADA)50% from a 15% ($944 million overall)
across-the-board cut to specified categorical programs
K-ADULT FUNDING: 2008-09
5.66% COLA
Nov. 20082008-09
.68%COLA
20
07
/08
LE
VEL
$6,138
$5
,86
2
REVENUE LIMIT FUNDING: 2008-2009
Jan. 20092008-09
4.56%CUT
$5,5
44
PROPOSED
2.63%CUT
$5,6
56
ADOPTED
Feb. 20092008-09
Summary of Proposed State CutsElimination of .68 COLA $429,0004.5% Additional Cut $3,278,887
SUBTOTAL $3,707,887
Summary of Adopted State CutsElimination of .68 COLA $429,0002.63% Additional Cut $1,875,011
SUBTOTAL $2,304,011
Impact on UUSD: 2008-2009
Eliminates $2.5 billion in Prop 98 funding from 5.02% COLA for school districts and county offices – no COLA FOR 2009-10
Additional $530 million reduction to Prop 98 base due to revised 2008-09 base$265 million through cuts to base
revenue limit$265 million through cuts to categorical
programs
$114.2 million savings from elimination of the High Priority School Grant Program
K-ADULT FUNDING: 2009-10
REVENUE LIMIT FUNDING: 2009-2010
PR
OP
OS
ED
AD
OP
TED
5.02% COLA
5.66% COLA
$5,4
06
2.5%CUT
4.56%CUT
5.02% COLA
2.63%CUT
.958%CUT
$5
,500
5.66% COLA
$6,447
Cu
mu
lati
ve loss f
rom
sta
tuto
ry level =
$1,0
41
per
AD
A)
$6,447
Cu
mu
lati
ve loss f
rom
sta
tuto
ry level =
$947 p
er
AD
A)
Summary of Proposed State Cuts .68 Cut carried forward $429,000 4.5% Cut carried forward $3,278,887 2.5% Additional Cut $1,782,331 Previously identified Cuts $3,900,000
SUBTOTAL $9,390,218
Summary of Adopted State Cuts .68 Cut carried forward $429,000 2.63% Cut carried forward $1,875,011 0.958% Additional Cut $712,932 Previously identified Cuts $3,900,000
SUBTOTAL $6,916,943
Impact on UUSD: 2009-2010
2008-2009 Adopted Mid Year CutsElimination of .68 COLA $429,0002.63% Additional Cut $1,875,011
SUBTOTAL $2,304,011
2009-2010 Adopted Budget .68 Cut carried forward $429,0002.63% Cut carried forward $1,875,0110.958% Additional Cut $712,932Previously identified Cuts $3,900,000
SUBTOTAL $6,916,943
Impact on UUSD: Base Revenue Limit
Summary of Adopted State Budget
The State Solution:Categorical Cuts and Flexibility
Categorical programs are divided into three tiers to protect some and provide flexibility to others
TIER I: No funding reduction, no program flexibility, no statutory requirements waived
TIER II: Funding reduction of about 15% from 2008-09 levels; NO flexibility; must be operated according to current requirements
TIER III: Funding reduction of about 15%; maximum flexibility to shift spending for any educational purpose
Changes start this year and continue until 2012-13
The State’s Solution:Categorical Cuts and Flexibility
TIER I: Child Development, Child Nutrition, EIA, K-3 CSR, Prop 49 after school, Special Ed, Home to School Transportation, QEIA
TIER II: State Testing, ELAP, plus ten others not significant in UUSD
TIER III: All other state categoricals, including Adult Ed, supplemental grants for music, PE, arts, school counseling, PAR, ROP, instructional materials (textbooks), Gr. 9 CSR, GATE, CAHSEE support, CBET, and dozens of others…
There were SOME changes in… Reduced penalties for K-3 Class Size Reduction Accessing prior year categorical balances
(sweep ups) from 2007-08 only for any educational purpose – with 8 programs excluded
Routine Restricted Maintenance Transfer (reduce transfer from 3 to 1 percent until 2012-13)
Deferred Maintenance – Eliminates local .5% statutory match until 2012-13
Mega Item categorical flex provision - replaced with broader flexibility package
Instructional materials timelines suspended for two years – must maintain Williams compliance
There were NO changes to…
Current law regarding Reserve for Economic Uncertainty (3 percent)
Minimum number of minutes and the minimum school year remains 180 days
K-Adult mandated cost reimbursement program remains in place – the district will continue to process claims and maintain records
The Nation’s Solution:The Federal Stimulus Package
K-12 will benefit primarily from: State Fiscal Stabilization Fund (UUSD est. TBD) IDEA - Special Education (UUSD est. $2,530,000) Title I – Restricted (UUSD est. $1,135,000)
It is one-time money Districts won’t see funds until after July 1,
2009 Unable to factor into 2008-09 budget solution May not be able to include in 2009-10 budget
by June deadline; hope to be able to add in fall
Awaiting instructions from Feds, CDE & County
What does all this mean? The cuts to the base revenue limit were not
as deep as the Governor’s proposal – but they are still the largest reductions in public education’s history and the impact will be devastating
The flexibility to shift state categorical funds to address these losses is not as broad as proposed by the Governor – limiting district’s ability to shift funds to protect our core programs and meet local priorities
In summary, the combination of the cut in the district’s income and the updated “menu” of solution options is no better and no worse than earlier projected. The district has some very difficult decisions to make and implement
More questions than answers…
How will the district’s Supplemental Early Retirement Program affect lay-off decisions?
What does the change in penalties for K-3 CSR mean to districts?
How much of the federal money will make it through to districts – and how much discretion will there be to spend what we receive?
What will happen in the May Special Election… and what is the State’s back-up plan?
Q: How will Upland USD respond?
1)Enhance the bottom line by the spending and hiring freeze implemented in November (this is one-time money)
2)Conservative, planned deficit spending using supplemental reserves, again a temporary ‘fix’
3)Exercise categorical flexibility in state budget with discretion; factor in Federal Stimulus Package once confirmed
A: We will “stay the course.”
How will Upland USD respond?
4)Identify additional revenue sources
5)Identify additional cuts in spending
6)Seek negotiated solutions with employees
Hope for the best; plan for the worst
Communicate and stay focused
Advocate, advocate, advocatewww.capta.orgwww.protectourstudents.orgwww.csba.org
Early - Issue lay-off notices to 78.5 certificated March non-management employees
- Issue release/reassignment letters to all certificated administrators
Mid - Issue lay-off notices to classifiedMarch employees (number & positions TBD)
April - Make decision re: SERP program participation
Ongoing - Monitor budget & revisit lay-off actions
May - Analyze Governor’s May Revise
By June - Adopt 2009-10 Budget
NEXT STEPS
