Plumas Lake Elementary School District Governor’s Budget Update January 20, 2009

Governor’s Budget Governor’s proposal for mid-year reductions in : The 0.68% COLA included in the Adopted Budget is eliminated Further revenue limit reductions of 4.5% – total deficit of 9.685% The overall reduction to Proposition 98 for is $6.3 billion Elimination of Deferred Maintenance match requirement Reduction of Routine Restricted Maintenance Account set aside requirement For , the Governor’s proposal included: COLA of 5.02%, but not funded Revenue limit cut of $1.6 billion % of new base revenue limit Total deficit is % No COLA for categorical programs Categorical and other flexibility to help school agencies deal with the loss of funding 1

General Fund Revenue Collapse

Proposition 98 Guarantee $50 $55 $60 Minimum Guarantee No COLA $1.6 billion revenue limit cut April deferral Special fund shift “Settle up” redesignation Minimum Guarantee $56.1 billion $51.5 billion Real Cut Actual Spending

Proposition 98 Guarantee $50 $55 $60 Minimum Guarantee Special fund shift Minimum Guarantee $56.3 billion $55.9 billion Proposition 98 Reduction Actual Spending

Governor’s and Legislature’s Major Proposals ProvisionGovernor’s January ProposalLegislative Proposal (SBX14, vetoed) Revenue LimitEliminate 0.68% COLA; reduce further by 4.5% Eliminate 0.68% COLA Categorical Program EliminationsHigh Priority Schools Grant Program, Math and Reading Professional Development, Deferred Maintenance, Instructional materials, Professional Development Block Grant and others Categorical Program ReductionsMinor changesMany programs Prior-Year Categorical BalancesTransfer (with limitations) Current-Year Categorical Allocations Transfer (no dollar limitation) after public hearing Limit Mega-Item transfer for Home-to School Transportation to “in” only Routine Restrict Maintenance Set- Aside Reduce from 3% to 1%Reduced from 3% to 1% Deferred Maintenance Match Requirement Eliminate Reserve for Economic Uncertainties Reduce by half for and

What Does it Mean for Our District? Freeze on all non-essential expenses to preserve fund balance Impact of eliminating deferred maintenance funding by $28,000 Impact of reducing RRM funding - $165,416 Ending fund balance – where do we stand relative to requirements? No COLA - still have the following costs: Fixed costs – electricity, gas, water, sewer, insurance Step and column 6

Adopting the Budget Balanced budget must be adopted by district prior to June 30, 2009 State Budget will most likely not be in place by then Developing the budget requires: Clarifying assumptions How much revenue? What flexibility options will be acted upon? How will expenditures change? Once the State Budget is adopted, the district makes adjustments to its budget within 45 days 7

Next Steps Make necessary adjustments at Second Interim: Eliminate 0.68% COLA Reduce Revenue Limit additional 4.567% Eliminate Deferred Maintenance Match Set aside unallocated State categorical funds Prepare Multi-Year Projections based on what we know now Begin building budget for based on what we know now Review seniority lists for accuracy

Questions? Thank you Source: School Services of California (Slide 3, 4, 5, 6)