Governor’s Proposed Budget Steve Bolman Deputy Supt., Business and Administration Midge Hoffman Director, Budget & Accounting

The Economy Signs indicate that most of the nation is recovering…California not so much –California Unemployment at 12.3% compared to 10% for the U.S. –DOF estimates rate to remain above 10% through 2011

Government Financial Service Leisure & Hospitality Industrial Sectors (Jobs in Thousands) Manufacturing Construction Employment Trends December 2007 to November 2009

Recovery 5-year return to December 2007

Governor Vows to Protect Education!!! Education will take less than it’s share of pro-rata cuts in

Priorities Governor states that prison expenses will no longer be higher than higher education expenses, but speaks nothing about K-12 and the fact that it is next to dead last in funding in the Nation

GOOD NEWS!!! No Mid-Year cuts for !!! Decrease in Prop 98 offset by sweep of underutilized K-3 CSR funds

GOOD NEWS!!! FUNDED COLA for !!!

BUT WAIT, THIS GOOD NEWS DIDN’T LAST VERY LONG… If only it were real …the COLA is being ‘funded’ because it’s negative -.38% cut to the Revenue Limit

GOOD NEWS THAT DIDN’T LAST The previous COLA reported was.5% positive…a negative swing of.88% –Elementary - $109K –Secondary - $318K –Cherry Valley - $17K – TOTAL - $444K

COLA COLA re- benched to 1.8% from 2.4% - decrease –Elementary - $ 66K –Secondary - $182K –Cherry Valley - $ 10K – TOTAL - $258K Cumulative Loss for & = $1.15 Million

It feels good to be “Protected”…or does it? “Protected” doesn’t mean no new cuts

NO CUTS FOR THE ‘PROTECTED’ EDUCATION BUDGET ??? The one-time revenue limit cut of $ per ADA in is deleted for … BUT This is being replaced by another on-going cut …

NO CUTS FOR THE ‘PROTECTED’ EDUCATION BUDGET ??? The $1.5 B cut is to come from “District Administration” –$191 Elementary –$231 Secondary An additional loss of $1.5 M for the District This on-going additional cut won’t increase the revenue limit deficit factor – there’s no payback

NO CUTS FOR THE ‘PROTECTED’ EDUCATION BUDGET ??? No basis in reality for this figure Only gives the ‘ appearance ’ that the Governor is keeping cuts from the classroom Would eliminate 3 out of every 4 positions in the District Office

NO CUTS FOR THE ‘PROTECTED’ EDUCATION BUDGET ??? For example, The Business Office Staff is comprised of: –2 Payroll –2 Accounts Payable –1 Budget Tech –1 District Accountant –1 Purchasing Coordinator –1 Business Manager NOW, PICK TWO PEOPLE TO PRODUCE PAYROLL,PAY BILLS, MAKE DEPOSITS, BUY BOOKS & SUPPLIES, BALANCE & MANAGE THE BUDGET,MAKE SURE WE HAVE CASH, ENSURE INTERNAL CONTROLS AND SO ON…

Elementary $ 506,199 $ 496,647 $ 565,488 Secondary $ 1,294,045 $ 1,197,129 $ 1,301,941 Cherry Valley $ 82,541 $ 85,865 $ 97,431 $ 1,882,785 $ 1,779,641 $ 1,964,860 $253/ADA $245/ADA $278/ADA Revenue Update - Losses Since 1 st Interim

Revenue Limit Changes -13.9% from

Revenue Limit Changes Loss of COLA Loss of baseline dollars $566 $807 $1,373 $1,430 $482

District Options/Flexibility Reduce calendar by 5 days through Tier III Categorical funding can continue to be used with flexibility through Eliminate Deferred Maintenance Transfer Reduce Reserve for Economic Uncertainties

State Problems & Solutions

Problems with Assumptions – Pick your Metaphor… More Gimmicks Funding Shifts may be legally challenged May not see $6.9 B from the Federal Government When will the State figure out they’re out of smoke & mirrors?

2009/ / /2012 TOTAL INCOME $64,391,563 $61,419,468 $61,105,833 LESS TOTAL EXPENSES $67,197,801 $66,133,400 $66,399,713 NET INCREASE (DECREASE) $ (2,806,238) $ (4,713,932) $ (5,293,880) PLUS BEGINNING BALANCE $12,786,321 $ 9,980,083 $ 5,266,151 EQUALS ENDING BALANCE $ 9,980,083 $ 5,266,151 $ (27,729) Less RESERVES (3,062,888) (2,877,089) (2,775,650) UNAPPROPRIATED $ 6,917,194 $ 2,389,062 $ (2,803,380) Trends with Revenue Cuts

Average Daily Attendance 2009/ / /2012 COLA4.25%-0.38%1.80% % Deficit Elementary ADA 2,002 2,027 2,034 Cherry Valley ADA 350 Secondary ADA (funded) 5,058 4,886 4,683 Total ADA 7,410 7,263 7,067 Net Change over Prior Year (32) (147) (196)

2009/ / /2012 TOTAL INCOME $64,391,563 $61,419,468 $61,105,833 LESS TOTAL EXPENSES $67,197,801 $64,914,400 $65,180,713 NET INCREASE (DECREASE) $ (2,806,238) $ (3,494,932) $ (4,074,880) PLUS BEGINNING BALANCE $12,786,321 $ 9,980,083 $ 6,485,151 EQUALS ENDING BALANCE $ 9,980,083 $ 6,485,151 $ 2,410,271 Less RESERVES (3,062,888) (2,840,519) (2,739,080) UNAPPROPRIATED $ 6,917,194 $ 3,644,632 $ (328,810) Trends with 2.75% Salary Cut for All Employees