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EUSD BUDGET UPDATE THE SEVENTEENMONTH 200809, 200910 BUDGET BILL

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FEDERAL STIMULUS BILL EXPECTED TO PROVIDE MUCH-NEEDED IDEA FUNDING. STATE MANDATES ... FEDERAL FISCAL STIMULUS BILL ... FISCAL STIMULUS BILL. MAINTENANCE-OF ... – PowerPoint PPT presentation

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Title: EUSD BUDGET UPDATE THE SEVENTEENMONTH 200809, 200910 BUDGET BILL


1
EUSD BUDGET UPDATE THE SEVENTEEN-MONTH 2008-09,
2009-10 BUDGET BILL
  • 2008-09 FINAL MID-YEAR CUTS
  • 2009-10 BUDGET PROPOSAL AND PRELIMINARY IMPACTS
    ON EUSD
  • 2-26-09

2
THE SEVENTEEN-MONTH SOLUTION
  • AFTER MONTHS OF PROCRASTINATION, POLITICAL
    POSTURING, PARTISANSHIP, AND HIGH DRAMA, THE
    LEGISLATURE FINALLY PASSED A SERIES OF BILLS
    AIMED AT CLOSING THE STATES UNPRECEDENTED 42
    BILLION BUDGET CRISIS
  • STATE SENATORS WERE LOCKED DOWN A RECORD 45
    HOURS BEFORE THE FINAL REQUIRED VOTE WAS CAST
  • GOVERNOR SCHWARZENEGGER SIGNED THE BILLS LAST
    FRIDAY, FEBRUARY 20, 2009
  • IT WAS A BUDGET BATTLE OF EPIC PROPORTION WHICH
    WILL PRODUCE POLITICAL FALLOUT

3
THE SEVENTEEN-MONTH SOLUTION
  • IN THE GIVE AND TAKE OF THE BUDGET DEAL, ALL
    PARTIES GOT SOME OF THE ELEMENTS THEY FOUGHT FOR
  • THE GOVERNOR GOT THE SPENDING CAP HE WANTED
    (SUBJECT TO VOTER APPROVAL), AND THE EASING OF
    SOME RULES THAT HE FELT WOULD HELP SPEED ECONOMIC
    RECOVERY
  • LEGISLATIVE REPUBLICANS ACHIEVED SOME SELECTED
    CORPORATE TAX BREAKS, A SPENDING CAP, AND THE
    ABILITY TO UTILIZE FUNDS FROM PROPOSITIONS 10 AND
    63 (ALSO SUBJECT TO VOTER APPROVAL)

4
THE SEVENTEEN-MONTH SOLUTION
  • LEGISLATIVE DEMOCRATS WON NEW SOURCES OF TAX
    REVENUES, MINIMIZED THE CUTS TO SOCIAL SERVICES,
    AND HELPED PROTECT CERTAIN EMPLOYEE RIGHTS AND
    BENEFITS
  • ALL PARTIES ALSO MADE SACRIFICES AND WILL
    SUFFER SOME POLITICAL REPERCUSSIONS
  • THE GOVERNORS CREDIBILITY HAS TAKEN A HIT AS
    HE TOOK BACK HIS PLEDGE OF NO NEW TAXES, AND HIS
    PROMISE NOT TO RAISE THE VEHICLE LISCENCE FEE

5
THE SEVENTEEN-MONTH SOLUTION
  • LEGISLATIVE REPUBLICANS DIDNT GET AS HARD A
    SPENDING CAP AS THEY WANTED, NOR CERTAIN WAGE
    AND MEAL-BREAK RULE CHANGES SOUGHT BY BUSINESS
    INTERESTS
  • THOSE MEMBERS WHO VOTED FOR NEW TAXES MAY HAVE
    JEOPARDIZED THEIR POLITICAL CAREERS
  • LEGISLATIVE DEMOCRATS ALLOWED BALLOT MEASURES TO
    REDIRECT PROP 10 AND 63
  • THOSE MEMBERS WHO VOTED TO APPROVE CUTS TO LABOR
    AND EDUCATION MAY HAVE JEOPARDIZED THEIR
    POLITICAL CAREERS

6
THE SEVENTEEN-MONTH SOLUTION
  • THIS BUDGET SOLUTION MAY BE THE MOST COMPLEX IN
    CALIFORNIA HISTORY
  • ITS PREDICATED ON PASSAGE OF FIVE PROPOSITIONS
    IN A SPECIAL ELECTION SCHEDULED FOR MAY 19, 2009
  • SOLUTIONS INCLUDE
  • 15 BILLION IN SPENDING REDUCTIONS
  • 12.5 BILLION IN NEW TAX REVENUES
  • 5.4 BILLION IN BORROWING LOTTERY
  • 7.9 BILLION IN FEDERAL STIMULUS

7
THE SEVENTEEN-MONTH SOLUTION
  • NEW TAX REVENUES INCLUDE
  • 1 SALES TAX (APRIL 1, 2009)
  • VEHICLE LISCENSE FEE GOES UP TO 1.15 OF
    VEHICLES VALUE
  • STATE INCOME TAX RATES ARE INCREASED
  • DEPENDENT TAX CREDIT IS REDUCED
  • NEW TAXES ARE TEMPORARY, AND TIED DIRECTLY TO
    PASSAGE OR FAILURE OF THE BUDGET STABILIZATION
    PROPOSAL
  • RECEIPT OF OVER 10 BILLION IN FEDERAL STIMULUS
    FUNDING WOULD TRIGGER CHANGES

8
THE SEVENTEEN-MONTH SOLUTION
  • PROPOSITION 1A STATE FINANCE SPENDING CAP
  • PROPOSITION 1B EDUCATION FINANCE PROVIDES FOR
    A MAINTENANCE FACTOR- TYPE OF SETTLEMENT - 9.3
    BILLION 2011-12
  • PROPOSITION 1C CALIFORNIA STATE LOTTERY
  • PROPOSITION 1D DIVERTS PROPOSITION 10 FUNDING
    OF 340 MILLION ONE TIME
  • PROPOSITION 1E MENTAL HEALTH SERVICES ACT -
    DIVERTS PROPOSITION 63 FUNDING TO BE USED FOR
    EARLY DIAGNOSIS AND TREATMENT PROGRAMS FOR MENTAL
    HEALTH

9
PROPOSITION 1A STATE FINANCE
  • PROP 1A SPENDING CAP SEEKS TO STABILIZE THE
    BUDGET BY INCREASING THE SIZE OF THE RAINY DAY
    FUND
  • UNANTICIPATED REVENUES BASED ON A 10-YEAR FORMULA
    DEPOSITED INTO FUND PORTION TO BE SAVED FOR
    ECONOMIC DOWNTURNS PORTION AVAILABLE FOR USE
  • FIRST CALL ON RAINY DAY FUNDS WOULD BE TO SATISFY
    PROPOSITION 98 OBLIGATIONS
  • PROP 1A WOULD ALSO ESTABLISH SUPPLEMENTAL
    EDUCATION PAYMENT ACCOUNT IF PROPOSITION 1B
    PASSES!

10
PROPOSITION 1B EDUCATION FINANCE
  • PROPOSITION 1B WAS PUT ON THE BALLOT TO SOLVE THE
    PROPOSITION 98 MAINTENANCE FACTOR ISSUE SPEAKER
    KAREN BASS
  • STARTING IN 2011-12 ANNUAL PAYMENTS WOULD BE MADE
    TO K-14 EDUCATION IN LIEU OF A MAINTENANCE FACTOR
    REPAYMENT
  • FUNDING WOULD BE COLLECTED VIA THE MECHANISM SET
    UP IN PROPOSITION 1A
  • PAYMENTS COULD BE USED FOR CLASSROOM INSTRUCTION,
    TEXTBOOKS, AND OTHER EDUCATIONAL PROGRAMS
  • ALLOCATED PER DISTRICT ADA
  • PROBABLY PAID OUT OVER FIVE YEARS

11
THE EDUCATION BUDGET
  • THE MAGNITUDE OF THE TWO-YEAR LOSS TO THE
    PROPOSITION 98 GUARANTEE IS UNCHANGED FROM THE
    GOVERNORS PROPOSAL - 8.6 BILLION
  • THE REDUCTION INCLUDES
  • 2.3 BILLION IN PROGRAM CUTS
  • 3.2 BILLION IN APPORTIONMENT DEFERRALS
  • 1.1 BILLION RECHARACTERIZED AS SETTLE-UP
  • 618 MILLION SWAP WITH THE STATES PUBLIC
    TRANSPORTATION ACCOUNT
  • 57 OF ALL STATE REDUCTIONS ARE BORNE BY
    EDUCATION

12
(No Transcript)
13
THE EDUCATION BUDGET
  • THE PRIMARY DIFFERENCE BETWEEN THE PROPOSED AND
    FINAL BUDGETS IS THE NATURE OF THE CUTS
  • A COMPROMISE WAS REACHED BETWEEN THE GOVERNORS
    APPROACH AND THAT OF THE LEGISLATIVE DEMOCRATS -
    50/50 SPLIT
  • UNRESTRICTED REVENUE LIMITS ARE STILL REDUCED
    BUT A LITTLE LESS THEN ORIGINALLY PROPOSED
    2009-10 DEFICIT IS 13.094 INSTEAD OF 16.161
  • MOST STATE CATEGORICAL PROGRAMS ARE REDUCED 15.4
    IN 2008-09, AND ANOTHER 4.9 IN 2009-10

14
GOVERNORS PROPOSED BUDGET
15
FINAL APPROVED BUDGET
16
FINAL APPROVED BUDGET
17
(No Transcript)
18
FLEXIBILITY 2008-09 2012-13
  • TO HELP DISTRICTS SURVIVE THE BUDGET CRISIS, THE
    GOVERNOR AND LEGISLATURE HAVE PROVIDED SEVERAL
    OPTIONS FOR FLEXIBILITY WITHIN PROGRAMS
  • CATEGORICAL PROGRAMS ARE ARRANGED IN THREE TIERS
  • TIER I PROGRAMS THAT MAINTAIN FUNDING LEVELS
    AND ALL REGULATIONS (NO FLEXIBILITY)
  • TIER II PROGRAMS THAT ARE REDUCTED AND MAINTAIN
    ALL REGULATIONS (NO FLEXIBILITY)
  • TIER III PROGRAMS THAT RECEIVE REDUCTIONS AND
    HAVE FLEXIBILITY (5 YEARS)

19
FLEXIBILITY 2008-09 2012-13
  • TIER 1 PROGRAMS (UNTOUCHABLES)
  • QUALITY EDUCATION INVESTMENT ACT (QEIA)
  • HOME-TO-SCHOOL TRANSPORTATION
  • K-3 CLASS SIZE REDUCTION
  • PROP 49 AFTER SCHOOL PRGMS (ASES)
  • ECONOMIC IMPACT AID (EIA)
  • SPECIAL EDUCATION
  • CHILD DEVELOPMENT
  • CHILD NUTRITION

20
TIER 1 CLASS SIZE REDUCTION
  • CLASS SIZE PROGRAM MAINTAINS SAME LEVEL OF
    FUNDING (2007-08 LEVEL, LESS 2008-09 MID-YEAR
    SWEEP OF 46 MIL)
  • SIGNIFICANTLY CHANGES THE PENALTIES FOR CLASSES
    IN EXCESS OF 20.441
  • PENALTIES RANGE FROM 5 TO 30 ON A SLIDING
    SCALE, DEPENDING ON AVERAGE CLASS SIZE
  • CURRENT INCENTIVE FUNDING RULES STILL IN FORCE
    FUNDING IS BASED ON 20 STUDENTS/CLASS

21
TIER 1 CLASS SIZE REDUCTION
  • IN ORDER TO QUALIFY FOR THE REDUCED PENALTIES,
    DISTRICTS MUST BE PARTICIPATING IN THE CSR
    PROGRAM AS OF DECEMBER 10, 2008
  • DISTRICTS MAY EXCEED 20.441 CLASS SIZE AVERAGES
    BUT IT WILL
  • COST SOME FUNDING
  • FLEXIBILITY WILL END WITH
  • THE 2011-12 SCHOOL YEAR

22
TIER II FUNDING REDUCTIONS BUT NO FLEXIBILITY
  • ALL TIER II AND TIER III PROGRAMS LOSE 15.4
    FUNDING IN 2008-09, AND ANOTHER 4.9 IN 2009-10
  • ENGLISH LANGUAGE ACQUISITION PRG
  • K-12 HIGH SPEED NETWORK
  • STAR TESTING
  • CHARTER SCHOOL FACILITY GRANTS
  • 2009-10 FUNDING TO BE DETERMINED BY THE
    PERCENTAGE OF FUNDING RECEIVED IN 2008-09 -
    THUS, IMPLICATIONS FOR PROGRAMS THAT ARE
    ATTENDANCE-BASED IE. CDS, SUPP HRL.

23
TIER III FUNDING CUTS AND FULL FLEXIBILITY FOR
FIVE YEARS
  • MOST OTHER STATE CATEGORICAL PROGRAMS ARE IN TIER
    III, INCLUDING
  • TARGETED INSTR IMPRV BLOCK GRANT (TIIG)
  • INSTRUCTIONAL MATERIALS
  • SCHOOL AND LIBRARY IMPROVEMENT BLOCK GRANT (SIP),
    SCHOOL SAFETY BLK GRANT
  • PEER ASSISTANCE REVIEW, BTSA
  • MATH AND READING PROFESSIONAL DEVELOPMENT,
    SECONDARY SCH COUNSELING
  • SUPPLEMENTAL INSTRUCTION (ATS)
  • HIGH PRIORITY SCHOOLS GRANT PROGRAM IS ELIMINATED
    FOR 2009-10

24
TIER III CATEGORICAL PROGRAMS
  • FLEXIBILITY IS DEFINED AS ANY EDUCATIONAL
    PURPOSE
  • DISTRICTS THAT USE PROVISIONS WILL BE DEEMED TO
    BE IN COMPLIANCE WITH PROGRAM AND FUNDING
    REQUIREMENTS CONTAINED IN STATUTORY, REGULATORY
    AND PROVISIONAL LANGUAGE
  • FLEXIBILITY INCLUDES THE ABILITY OF DISTRICTS TO
    TRANSFER FUNDS INTO THE UNRESTRICTED GENERAL FUND
  • FLEXIBILITY DECISIONS MUST BE DISCUSSED AND
    APPROVED AT A PUBLIC MEETING OF THE BOARD OF
    EDUCATION

25
INSTRUCTIONAL MATERIALS TIER III
  • SUSPENDS FOR 2008-09 AND 2009-10 THE REQUIREMENT
    TO PURCHASE NEWLY ADOPTED MATERIALS THROUGH
    JULY 1, 2010
  • FUNDING LEVEL IS REDUCED FROM 69 TO ABOUT
    56/STUDENT
  • COUNTY OFFICES ARE TEMPORARILY RELIEVED OF THE
    DUTY TO CONFIRM PURCHASES OF THESE MATERIALS
    DURING SITE VISITATIONS (WILLIAMS SETTLEMENT)
  • IF DISTRICTS PURCHASE MATERIALS WITH ANY OTHER
    STATE FUNDS, ALL REGULAR LAWS STILL APPLY
  • SUFFICIENCY HEARING FOR STANDARDS-ALIGNED
    MATERIALS MUST STILL BE HELD

26
OTHER FLEXIBILITY OPTIONS
  • CATEGORICAL RESTRICTED BALANCES AS OF JUNE 30,
    2008 MAY BE TRANSFERRED TO UNRESTRICTED FUND ON A
    ONE-TIME BASIS
  • DISTRICT RESERVE REQUIREMENTS REMAIN THE SAME
    CURRENT LAW IN EFFECT
  • ROUTINE RESTRICTED MAINTENANCE (RRM) MAY BE
    REDUCED FROM 3 TO AS LOW AS
  • 1 - FIVE YEARS DEFERRED
  • MAINTENANCE MATCH IS
  • OPTIONAL LEAs WILL RECEIVE
  • STATE MATCH FOR FIVE YEARS
  • 65 OF 2008-09 AMOUNT

27
SPECIAL EDUCATION FOR 2009-10
  • ONLY PROGRAM THAT PROVIDES A SMALL FUNDING
    INCREASE ABOUT 10.92 PER ADA
  • BUDGET DOES NOT INCLUDE THE 65 MILLION AGREED TO
    BY THE STATE FOR THE SPECIAL EDUCATION BEHAVIOR
    INTERVENTION SETTLEMENT MANDATE
  • GROWTH IS FUNDED FOR 2009-10
  • FEDERAL STIMULUS BILL EXPECTED TO PROVIDE
    MUCH-NEEDED IDEA FUNDING

28
STATE MANDATES
  • DESPITE A RECENT COURT RULING, THE STATE BUDGET
    FUNDS EDUCATIONAL MANDATES AT 1000 EACH
    CLEARLY IN VIOLATION OF SAN DIEGO SUPERIOR COURT
    DECISION
  • MANDATED ACTIVITIES HAVE NOT BEEN SUSPENDED OR
    REPEALED
  • FINAL BUDGET BILL DOES NOT EVEN FUND THE THREE
    MANDATES THE GOVERNOR PROPOSED
  • LEGISLATIVE FLOOR REPORTS IMPLY THAT THIS MATTER
    WILL BE TAKEN UP BEFORE THE MAY REVISE

29
PAYMENT DEFERRALS
  • STATES CASH FLOW PROBLEM WILL DIRECTLY IMPACT
    EVERY LEA - 3.2 BILLION OF ADDITONAL DEFERRALS
    ADDED IN 2008-09
  • WHEN ADDED TO THE EXISTING DEFERRALS, IT TOTALS
    7.41 BILLION OF CASH PAYMENTS THAT WILL ARRIVE
    AT A LATER DATE
  • JUNE APPORTIONMENT AND DEFERRED CATEGORICAL
    FUNDING WILL NOT ARRIVE UNTIL JULY 31, 2009,
    AFTER ITS NEEDED FOR PAYROLL
  • JULY AND AUGUST APPORTIONMENT ARE POSTPONED UNTIL
    OCTOBER 2009
  • NEW PROPOSED DEFERRALS ARE ONGOING

30
FEDERAL FISCAL STIMULUS BILL
  • THE STATE STABILIZATION FUND CONTAINED IN AAAR
    (HR 1) IS DESIGNED TO HELP BACKFILL STATE
    EDUCATION BUDGET CUTS
  • CALIFORNIA WILL RECEIVE ABOUT 6 BILLION
  • GOVERNORS ARE REQUIRED TO USE AT LEAST 81.8 TO
    BRING STATE CUTS TO EDUCATION UP TO FY08 OR FY09
    LEVELS, WHICH EVER IS GREATER
  • MONEY IS SUPPOSED TO ARRIVE IN STATES BY MARCH
    2009
  • STILL UNCERTAINTY ABOUT WHEN/HOW MUCH OF THIS
    FUNDING WILL REACH LEAs

31
FEDERAL FISCAL STIMULUS BILL
  • MAINTENANCE-OF-EFFORT
  • STATES MAY COUNT STABILIZATION ALLOTMENT TOWARD
    THEIR MAINTENANCE OF-EFFORT (MOE)
  • LOCAL DISTRICTS MAY NEED TO REQUEST APPROVAL TO
    USE STATE STABILIZATION ALLOCATION FOR THEIR OWN
    MOE
  • SPECIAL EDUCATION IDEA FUNDING WILL INCREASE FROM
    17.2 TO 26.3 OF THE ANNUAL COST OF EDUCATING
    STUDENTS WITH DISABILITIES SHORT TERM ONLY
  • TITLE 1 FUNDING WILL NEARLY DOUBLE SHORT TERM
    ONLY

32
WHATS NEXT
  • WITH THE GOVERNORS SIGNATURE SECURED LESS THAN A
    WEEK AGO, THE DISTRICT IS STILL EVALUATING THE
    BUDGET INFORMATION, WHICH IS CHANGING EVERY DAY
  • REVENUE PROJECTIONS ARE BEING REVISED NOW THAT A
    FINAL BUDGET HAS BEEN ADOPTED
  • NEW CATEGORICAL FLEXIBILITY OPTIONS HAVE OFFERED
    HELP, BUT ALSO ADDED COMPLEXITY TO THE BUDGETING
    PROCESS
  • CABINET IS STILL EVALUATING BUDGET PRIORITIES AND
    DETERMINING THE LEVEL OF NECESSARY REDUCTIONS
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