Poway Unified School District Governor’s 2019-2020 Budget Proposal Presented to: Palomar Council PTA Ron Little, Associate Superintendent March 5, 2019

Agenda California’s Current Economic Trends Governor’s Budget Proposal for 2019-20 Impacts to Poway Unified School District

California’s Current Economic Trends Low Unemployment Rates 4.1% (December 2018) down from 12.2% (Fall 2010) Slowing Job Growth Robust General Fund Revenues Personal Income Tax (PIT) - Real Personal Income Growth up 3.6% Sales and Use Tax exceed projections Continued Economic Growth 10 years of sustained economic growth Tech sector remains robust State’s General Fund Reserves Rainy day fund for emergencies or recession, BSA levels at 10.7% Total reserves levels at 12.8%

Risks to the California Economy and the State Budget “It can’t get much better for Gavin Newsom as California’s next Governor. But it’s almost certain to get worse.” L.A. Times Risks to the California Economy and the State Budget Governor Newsom and the UCLA economists identify a different set of key risks to California’s economy – they aren’t mutually exclusive UCLA Governor Unratified tri-party trade agreement between California, Mexico, and Canada Continued trade tensions between the U.S. and China Policy conflicts with the federal government Volatile stock market An aging population Housing crisis 2019 School Services of California, Inc.

Governor’s Budget Proposal for 2019-20 Education $80.7 billion in Prop 98 Funding (3.6% year over year increase) $3 billion (one-time, non-Prop 98) for CalSTRS liabilities offset $2 billion for LCFF to provide 3.46% COLA (total LCFF $63 billion) $750 million (one-time, non-Prop 98) for new or retrofitted full-day kindergarten facilities $576 million ($186 million one-time) for expanded special education services and support $187 million to provide 3.46% COLA to some categorical programs outside of the LCFF $20.2 million additional for county offices to provide technical assistance to school districts Significant investment in early childhood Prop 98 Funding (in Billions $) $80- $70- $60- $50- $40- $30- $20- $0- Acceleration of Bond sales related to Prop 51 89.0% 11.0% K-12 CCCs

$3 Billion One-Time, Non-Prop 98 Funds Governor’s Budget Proposal for 2019-20 Education $3 Billion One-Time, Non-Prop 98 Funds Current (per AB 1469) Proposed (per January Budget) Fiscal Year Change 2018-19 16.28% 2019-20 18.13% 17.10% -1.03 2020-21 19.10% 18.10% -1.00 Part 1: Immediate Relief $700 million applied over two years Reduce statutory rate increases for employers Part 2: Prepayment to Achieve Long-Term Savings $2.3 billion to pay down employers’ unfunded liability Projected to reduce employer contribution rate 0.5% (ongoing) Projected to save employers $6.9 billion over the next three decades Caveat: How will the non-educational agencies react to the Governor utilizing the non-Prop 98 funding bucket? Source: Capital Advisors Group, LLC

Governor’s Budget Proposal for 2019-20 PUSD Impacts 3.46% COLA on LCFF funding $2.7 million over the 2.57% COLA currently budgeted for in 2019-20 3.46% COLA for Special Education funding $160,000 over the 2.57% COLA currently budgeted for 2019-20 Increase in Mandated Block Grant funding $60,000 increase over currently budgeted for 2019-20 $3 billion ‘buy-down’ of STRS liability Decrease in projected employer-paid STRS of $1.3 million in 2019-20

Governor’s Budget Proposal 2019-20 PUSD Impacts Net Gain of $4.2 million of ongoing funding in General Fund 2019-20 Updated enrollment projections based on current year certified enrollment and revised short-term projections Multi-Year Projections 2018-19 2019-20 2020-21 as per January 17, 2019 Board of Education meeting

Thank you