200910 Budget Update

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• 2009-10 Budget Update

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General Fund Budget
The budget is a product of our strategic plan

• Educating and inspiring each student to navigate
  successfully in a global community.

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Goals for this update

• 2008-09 General Fund Budget
• Current Budget Projection
• State Revenues/Funding
• How the state funds schools
• January revenue conference estimates
• Student counts, EGR and statewide
• Impact of potential Young 5/Kindergarten funding
  changes
• Governors Budget Proposal, Federal Stimulus
• 2009-10 Current Budget Projection
• Timeline leading to adoption of 2009-10 budget

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2008-09 Budget
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How the state funds schools
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Revenue Estimating Conference

• Two per year (January and May)
• January 2009 is first look at 2009-10 fiscal year
• Predicted revenues
• 2007-08 Final 247 million carried forward to
  2008-09
• 2008-09 Decreased by 340 million from May 08
  estimate
• 2009-10 73 million lower than 2008-09 reduced
  estimate
• 235 million shortfall to maintain funding at
  this years level
• Revenues in per-pupil terms
• No proration in funding this year
• 2009-10 Revenues equal a 150/pupil decrease in
  funding
• Governors recommendation in her budget proposal?

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Predicted revenues January conference
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Student Counts EGR and Statewide

• Statewide
• 31,000 less students this year, on top of 25,000
  less the year before
• Projected loss of 30,000 next year, and close to
  that for two years after next
• Majority of decrease attributed to birth rates
• Kent County birth rates deviate from state trend,
  have been constant
• Statewide decrease in students only thing saving
  per-pupil funding
• 30,000 less students equals potential to increase
  funding 95 per pupil
• East Grand Rapids
• 2006-07 3,011 FTE
• 2007-08 3,003 FTE
• 2008-09 2,978 FTE
• 2009-10 Projection 2,965 FTE
• Future years Holding steady at 2,970
• Loss of 13 students 100,000 in revenue

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Young 5/Kindergarten Funding

• Current intent language in School Aid act
• To receive full funding (7,867/pupil)
• 2009-10 Young 5s must be full day
• 2010-11 Kindergarten hrs. must be 60 of grades
  1-12
• 2011-12 Kindergarten hrs. must be 70 of grades
  1-12
• Funding impact if programs remain ½ day
• Young 5s Up to 200,000 annually
• Kindergarten Up to 750,000 annually
• Cost impact to offer full day
• Young 5s Up to 150,000
• Kindergarten Up to 500,000

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Governors Budget, Federal Stimulus

• Governors Budget Proposal
• Started with 235 million deficit to maintain
  funding
• 70 million in additional revenue (tax loopholes,
  lottery, tax enforcement)
• 165 million in funding cuts
• 59 reduction in per-pupil funding
• 20 cut in ISD operational funding
• Elimination of district specific provisions,
  small categoricals
• Federal Stimulus Package
• Title I funds 87,000 over two years?
• IDEA Special Education 475,000 over two years?
• Can we utilize? Maintenance of Effort
  restrictions
• Stabilization funding Governor required to use
  majority to maintain school funding, next year
  and two years out, if funds available
• Funds are for two years, not an ongoing stream of
  funding

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Budget Assumptions for 2009-10

• Revenue Assumptions
• Per-Pupil Funding same as last year (7,867)
• 59 cut in funding from Governors budget
  proposal
• Offset by use of Federal Stabilization funds
• Student Count 2,965
• No other Federal stimulus funds
• Expense Assumptions
• Salaries Contracts in place (2-2.25)
• Health Care 7.5 increase
• Retirement Rate 0.4 rate increase, 2.4
  increase in cost
• Utilities 7.5 less, due to dropping natural gas
  costs

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2009-10 Budget Projection
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Plan of action to adopt budget in June

• Budget Workshop with Board of Education (February
  16)
• Board considering blend of use of fund balance
  and budget adjustments
• Budget Committee (February April)
• Committee will provide recommendations to balance
  budget
• Review Budget Committee recommendations (April)
• Finance Committee, full Board of Education
• Staff/Community Feedback (April-May)
• Review Budget Committee recommendations for
  feedback
• Make necessary adjustments to budget (May)
• Actual Health care rates, staff/community
  feedback
• Adopt 2009-10 budget (June)

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Questions?