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School Finance Town Hall

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Title: School Finance Town Hall


1
School Finance Town Hall
Tuesday, April 14, 2009
2
Agenda
  • Brief History of California School Finance
  • Status of California State Budget
  • OUSD Budget Revenues and Expenses
  • RBB How schools receive resources?

3
California Education RankingsHow do we compare
to other states?
  • Category Rank
  • Number of Students (2007-08)1 6,276,486 1st of
    51
  • Average Teacher Salary (2006-07)1 63,640 1st of
    51
  • Spending per K-12 pupil (2005-06)2 7,571 47th
    of 51
  • Public school revenue (2005-06) 45 28th of 51
  • per 1,000 personal income1
  • Total school staff to students3 91.5 50th of 51

Note Numbers in table are based on fall
enrollment data. District of Columbia is included
among the states. Source 1 National Education
Associations Rankings and Estimates,
2008-09. Source 2 Education Week. Quality
Counts. 2009. Source 3 National Center for
Education Statistics (NCES) Common Core of Data
2006-07, 1/26/09.
4
California School FinanceBefore Serrano v.
Priest Decision (1973)
  • Funding mechanisms for schools was simple.
  • Majority of funds were generated via local
    property taxes
  • Supplemental funds from the state and federal
    government
  • State Distributed funds equally to districts
    through one program
  • Federal Dollars intended mostly for districts
    with high-poverty populations (Title I).
  • State inaction following the Serrano v. Priest
    decision led to Proposition 13 being put on the
    ballot in 1978.

5
California School FinanceProposition 13 (1978)
  • Voters amend California Constitution.
  • Property taxes could be no more than 1 of
    assessed value
  • Until 1978, property taxes furnished about
    two-thirds of all education revenues
  • Proposition 13 drastically reduced property taxes
    and prompted a near reversal of the ratio of
    state to local funds provided to school
    districts.

6
California School Finance Revenue Instability
  • However, the States most stable funding stream
    (local property taxes) is a victim of Prop 13
    and the impact keeps getting worse

7
California School FinanceProposition 98 (1988)
  • Guarantees minimum level of funding to education.
  • K-14 shall receive either fixed percent of total
    state budget or amount received in prior year,
    whichever is greater
  • If school district property taxes didnt provide
    enough, the state filled in the rest.
  • In years of a bad state budget, the minimum
    guarantee became the ceiling.
  • Competition within the Proposition 98 part of the
    state budget i.e. education fighting education.

8
California School FinanceRevenue Limit Mechanism
If school district property taxes didnt provide
enough, the state fills in the rest.
9
California School Finance1988 to Present
  • Governor and the Legislature Reforming
    California Schools (just a few examples)
  • 134 categorical programs established in OUSD
    budget
  • Statewide class size reduction implemented (K-3)
  • 180-day instructional time rule established
  • Williams settlement over teachers, instructional
    materials, and facilities

10
Agenda
  • Brief History of California School Finance
  • Status of California State Budget
  • OUSD Budget Revenues and Expenses
  • RBB How schools receive resources?

11
State Budget CrisisOperating Shortfalls
Expected to Grow
  • General Fund (in Billions)

The states structural deficit has increased
exponentially as state revenues have declined due
to worsening economic conditions
12
New State Budget 2008-09
  • The State Budget enacted on February 20th
    includes
  • It is a 17-month budget that runs through June
    2010
  • To address budget deficit, package includes 15
    billion in expenditure cuts, 14.4 billion in
    temporary revenues, and 11 billion of borrowing.
  • Enacted budget is predicated on the passage of
    several ballot measures that will go to voters on
    May 19, 2009.
  • Cuts to education equal 8.6 billion over the
    next 17 months.

13
Impact to OUSD Budget Governors Proposal vs.
New State Budget
  • Budget reductions to OUSD budget in 2008-09 under
    the Governors proposal and the new state budget.

General Fund Unrestricted Restricted Total
Governors Proposal (Nov 2008) (12,465,000) 0 (12,465,000)
New State Budget (Feb 2009) (6,940,199) (7,840,238) (14,780,437)
14
Steps Taken by OUSD to Mitigate Budget Cuts
Unrestricted Resources
Action Item for 2008-09 Actual Savings
Reduction in Special Education Contribution 1,199,999
Central Office Vacancies and Targeted Hiring Freeze 223,000
Insurance/Settlements Moved to Self-Ins Fund 3,700,913
Routine, Restricted Maintenance Acct. Flexibility 1,000,000
Categorical Carryover Already Held for Flexibility 3,310,490
Categorical Carryover Already Allocated to Depts. 0
Out-of-state employee travel and conferences TBD
Reduce Ending Fund Balance for 2008-09 0
Reduce 2008-09 Budget at School Sites 0
Total 9,434,402
Note Savings will continue in 2008-09
15
Agenda
  • Brief History of California School Finance
  • Status of California State Budget
  • OUSD Budget Revenues and Expenses
  • RBB How schools receive resources?

16
OUSD BudgetWhat funds comprise the OUSD budget?
Total 2008-09 OUSD Revenues (All Funds) 515.7
million
All Other Funds include Building Fund (21),
Deferred Maintenance (14), State Loan/Special
Reserve (17), County School Facilities Fund (35),
State School Building Purchase Fund (30), Tax
Override Fund (53), Debt Service Fund (56).
17
OUSD General FundWhat are the sources of
revenue?
Total 2008-09 OUSD General Fund Revenues 431.7
million
Sources
Distribution
Other Local Revenue 38,110,175
Federal Revenue 65,983,532
Restricted 181,262,898
Other State Revenue 118,931,922
Revenue Limit (aka ADA) 208,679,539
Unrestricted 250,442,271
18
Unrestricted General Fund 2008-09Allocation by
Site - 269,208,592
Total 2008-09 OUSD General Fund Unrestricted
Allocations 269.2 million
19
Restricted General Fund 2008-09Allocation by
Site - 235,671,619
Total 2008-09 OUSD General Fund Restricted
Allocations 235.7 million
20
Agenda
  • Brief History of California School Finance
  • Status of California State Budget
  • OUSD Budget Revenues and Expenses
  • RBB How schools receive resources?

21
Results-Based Budgeting (RBB)Goals and Benefits
  • Equity
  • Allocation of funds are based on actual students.
    This means each school receives money based on an
    amount per student.
  • Schools have more control over the direction of
    their resources
  • Transparency
  • Clearer communication of budgeting process to
    community and parents
  • Reflects true cost to operate instructional
    program for schools
  • Accountability
  • RBB tied directly to schools strategic plans
  • School Site Council (SSC) oversight of
    categorical funds
  • Increased Site-Based Decision Making
  • Schools have more control over their budgets

22
Unrestricted Revenue 2009-10 Allocations Used
for RBB
Revenue Source 2009-10 Budget Included in RBB Formula Other School Allocations Comments
Revenue Limit 187,908,150 187,908,150
Federal Revenue 123,529

Class Size Reduction 14,973,242 14,147,882 Allocated separately to ES/HS
Lottery 4,458,823 4,252,161 Excludes Adult ADA for calc
Medical Admin Act (MAA) 1,012,500 1,012,500
Charter Pass Thru 4,629,902 Amt passed to charter schools
Other State Revenue 1,229,563
Other State Revenue 26,304,030 5,264,661 14,147,882

Measure E/G 22,251,982 18,663,306 Amt allocated directly to schs
Interest Earnings 1,312,500 1,312,500
Other Local Revenue 4,445,717
Other Local Revenue 24,858,217 1,312,500 18,663,306

TOTAL REVENUE 239,193,925 194,485,311 32,810,988
23
RBB CalculationPer Student Comparison Basic
Program
2008-09 2009-10 2009-10 2009-10 2009-10 2009-10
Grade Span Total General Purpose Measure G1 Lottery UR2 TIIG3 Total Diff.
Elementary 4,013 3,381 265 116 69 3,832 (181) (4.5)
Middle 4,327 3,646 286 126 75 4,132 (195) (4.5)
High 4,383 3,693 290 127 76 4,186 (197) (4.5)
K-8 4,170 3,513 276 121 72 3,982 (188) (4.5)
6-12 4,355 3,669 288 126 75 4,159 (196) (4.5)
K-12 4,240 3,573 280 123 73 4,049 (191) (4.5)
Note 1 Measure G is the newly passed local
parcel tax that provides additional funding to
the school district annually. Note 2 Lottery
Unrestricted are revenues that the school
district receives as a part of the California
Lottery. Note 3 Targeted Instructional
Improvement Grant (TIIG) is a state restricted
resource.
24
Unrestricted Resource Formulas How do we
allocate these resources to schools?
School Projected non-Special Day Class (SDC)
Enroll
  • Notes
  • Utility costs for individual school sites are
    calculated separately but included in school site
    budget
  • Other school-based set-asides such as
    certificated long-term subs, classified long-term
    subs, and involuntary transfers

School Projected SDC Enroll X 20 Source 0910
Projected Students
School Avg Daily Attendance (ADA) Source 0708 P2
ADA to Enroll Ratio ()
Per Student (School Type) Allocation Includes
Elem, Middle, High, Continuation
Total School GP Allocation
25
Restricted Resource FormulasHow do we allocate
these resources to schools?
Total Available Allocation Source CDE
School non-SDC Students Source 0910 Projected
Students
Per Student Allocation
Central (15) / School (85) Split
Total Allocation for School
Total non-SDC Students Source 0910 Projected
Students
Per Student Allocation
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