Governor’s Budget Ramona Unified School District January 22, 2008

Where to Begin…

XX-XX

To Start … California’s budget deficit has grown to over $40 Billion Both the Governor and the Legislature have advanced proposals Neither proposal has been acceptable to the other side

California in Fiscal Crisis Financing structure which is dependent on increasing revenues of sales and personal income taxes Creates up and down budget years 1% of the top California earners contribute 50% to the State revenues through personal income, of which capital gains tax is a large portion The failure of prior budgets to come to terms with the structural budget gap Always hoping for a good year to grow out of the problem Hope is not a strategy

Consequence The arrival of this recession has hit California extremely hard Weakened by past budget debt loads Most of the tools and gimmicks are gone California has the worst credit rating of the 50 States

Governor’s Proposal: Reduction of.68% funded COLA Additional reduction of 4.5% to the revenue limit No categorical program reductions Prior-year categorical ending balances transfers Current-year categorical flexibility Reductions in deferred maintenance Reduce mandatory State reserve requirements by half Deferral of April revenue limit and CSR payments until July 2009

Governor’s Proposal: Governor’s budget is based upon: Securitization of the California Lottery Temporary increase in sales tax of 1.5% Revenue Anticipation Warrant (RAW) Borrow funds in July 2009 and pay them back in June 2011 If these do not happen or the dollars are not realized, the shortfall will need to be made up

Legislature’s Proposal: Reduction of.68% funded COLA Categorical program elimination Instructional materials, professional development Categorical program reductions SLIP Prior-year categorical ending balances transfers Reductions in deferred maintenance

Reductions to RUSD: Reduction in Revenue Limit funding for $1,942,000

Governor’s Proposal: Continues the theme of the proposed mid-year reductions No COLA increase of 5.02% Additional reduction to revenue limit of 2.52% Ability to transfer State categorical dollars to the unrestricted fund to offset reductions Lifting of statutory requirements for most categorical programs

Governor’s Proposal: Elimination of deferred maintenance match Reduce mandatory State reserve requirements by half Proposes providing permanent categorical flexibility

Reductions to RUSD Revenue Limit for Takes into account declining enrollment Reductions to must be taken into account ($1,941,000) So figure is larger than a 2.52% reduction

and K-12 Revenue Limits C-14

Reductions to RUSD: Reduction in Revenue Limit funding for $3,814,000

Continue Increasing Operating Costs Step and column advancement 2% increase $750,000 Health and Welfare Increases 14% increase $650,000

Summarizing the Numbers mid-year reductions $1,942, budget reductions $3,814, Increased costs $1,400,000 Total 7,156,000

Cash The State continues to be in a cash flow crisis The State runs low on cash in February and March (before the April taxes) and then during the summer months Governor’s proposal is to defer payments to school districts to later months Continues to pass on the State’s cash shortages to school districts

RUSD response to Legislators Support proposals which generate increased revenue for K-12 public education Support the Governor’s proposals centered on flexibility in categorical programs Make every effort to approve mid-year cuts and a budget quickly

RUSD Response Withhold an additional 25% of site and department budgets Slowed process for filling open positions -- some have been left unfilled Offered an early retirement incentive to teachers Issued a freeze on spending from several categorical budgets

RUSD Response Identifying other reductions, savings programs, based upon the recommendations from School Services of California and San Diego County Office of Education Board will be kept apprised of the progress of the inclusive budget reduction process District Administration RTA, CSEA Board Ongoing information will be distributed to the Board Tentative list of reductions to the Board at the February Board meeting

RUSD Response Priority of Reductions Support all children in their quest to excel everyday in every classroom Maintain as much of our existing educational programs and support services as possible Protect the employment of as many school employees as possible Preserve the rich fabric of our local community schools and parental support

XX-XX

In Conclusion The end is not here for Ramona Unified School District

Acknowledgments Governor’s Proposal for the State Budget School Services of California, Inc.