Preliminary Budget for the School Year Update February 26, 2007 School District of South Orange and Maplewood

Important Dates in this year’s budget calendar – UPDATE 10/23/06BOE meeting: Board receives QAAR, LRFP and Master Facilities Plan update, adopts budget calendar 11/15/06Public Workshop: Budget Forum for public comment and guest speakers Sarah Kohl, NJSBA lobbyist and Steve Latz, Budget /20/06BOE meeting: Admin. presents Budget Kickoff Refresher on Impact of S1701 on budget development and 3-year budget projections; Board receives baseline data and adopts budget priorities and topics for analysis 12/18/06BOE meeting: Board accepts 2006 CAFR and management report 1/22/07BOE meeting: Supt. presents preliminary draft budget for /5/07 & 2/26/07 (month of February): consideration of budget at all regular Board meetings 2/12/07BOE Public Budget Workshop 2/26/07 3/5/07BOE meeting: adoption of preliminary budget to send to County Supt. 3/7/07 3/14/07Board of School Estimate Public Budget Workshop 3/14/07 3/21/07Board of School Public Hearing and Action to Set the Tax Levy 3/19/07 4/9/07BOE meeting: Accept 3/14/07 action of the BOSE

3 February 26, 2007 Our work on the budget has identified areas that have been reduced to bring it under CAP. Item Est. Amount Eliminate district-level administrative position (1 FTE + benefits)--$182,400 Reduce district-level administrative support and secretarial positions (4 FTEs + benefits) --$288,000 Eliminate middle-school French (1 FTE + benefits) --$84,000 Consolidation of services to reduce need for instructional aides (7 FTEs + benefits) --$416,000 Consolidation of bus routes to reduce number of drivers and buses (2 FTEs + benefits & 1 bus) --$187,800 Reduce CHS staff due to lower anticipated enrollment (10 FTEs + benefits) --$840,000 Subtotal (25 FTEs)--$1,998,200 Increase professional development+$200,000 TOTAL reductions to date:--$1,798,200

4 February 26, 2007 The processes and procedures from S1701 for developing and submitting the budget have not changed except for the CAP calculation. Limits on administrative costs Limits on allowable free balance Restrictions on use of free balance Restrictions on transfers within budget accounts Restrictions on use of Separate Proposal(s). The separate proposal process is the same for with one exception. If the district wants an approved proposal to be built into the subsequent year’s tax levy base, the question must include a “clear statement on whether approval will affect only the current year or result in a permanent increase in the levy.”

5 February 26, 2007 The key provisions under the pending Tax Levy Cap law (A-1) Applicable for school years Sets 4% cap on general fund tax levy growth (plus allowable adjustments) Enrollment adjustment (using ASSA projected weighted enrollment) NJDOE has performed this calculation and we are not eligible for this adjustment because our enrollment is not projected to increase) Health increases (health care increases over 4% capped at the average increase in SHBP-6.9%) We expect to be eligible for some adjustment in this area. State aid reductions (reduction in total formula state aid over current year). We won’t know if we are impacted by this until state aid is announced this week. State aid, budgeted surplus and other revenues are NOT part of the levy cap calculation (as they were when the cap was on revenues) Supercedes CEIFA budget cap and SGLAs

6 February 26, 2007 SGLAs from S1701 are no longer available. Application can be made to the Commissioner for additional adjustments to the Tax Levy Cap for the following: Increases in special education costs over $40,000 per pupil (same as current adjustment) Increases in capital outlay (same as current adjustment) Incremental increases in costs for opening a new school facility in budget year (same as current adjustment) Increases in regular education tuition to another district (formal sending/receiving) and to vocational district

7 February 26, 2007 Calculating the CAP will determine the actual amount of expenditure cuts that will be necessary to stay under the cap. The amount of state aid will impact the cap calculation but is unknown at this time. The commissioner has said that there will be an across-the-board 3% increase in state aid for non-abbott districts. That would be an increase of about $150,000 for the district in aid. Unlike in previous years, an increase in state aid would also be an increase in spending authority because only the tax levy is capped.

8 February 26, 2007 The separate proposal process is generally unchanged. Not include any programs/services necessary to achieve the CCCS (same as current process) Existing programs and services cannot be submitted as a separate proposal unless the district can demonstrate maintaining such programs/services in the base budget forces a reduction in T&E programs/services (S-1701) County Superintendent cannot approve a separate proposal unless district has achieved all administrative efficiencies (S-1701) Include interpretive statements identifying the program purpose (same as current process) Defeated proposals cannot be appealed (same as current process)

9 February 26, Budget Priorities 1. Develop a budget that aligns spending with the district’s five-year goals for narrowing the achievement gap, in particular raising all meassured, aggregated grade- level scores on state assessments to be equal to or higher than the comparable average scores for districts in the same socioeconomic class. Ensure a budgetary focus on pathways to higher achievement: Strengthening the capacity of teachers and leaders Invigorating curriculum and assessment Improving communications to more effectively engage parents in student learning

10 February 26, Budget Priorities (cont.) 2. Gain greater control over staff health-care costs. 3. Continue efforts to expand the breadth, depth and quality of special services in the district, as a means to improving the delivery and cost effectiveness of special education. 4. Gain greater control over operations costs and endeavor to reduce operations costs per pupil.