1. 2016-2017 Governor's Budget Update
February 14, 2017
Sara Smith
Director, Fiscal Services
Anna Pimentel

2. Governor’s Budget Update
On January 17, 2017 members of the District attended the School Services of California, Inc. Governor’s Budget Workshop.
The information presented in this presentation is based on this information.
Please remember that we have a long way to go in the budget process and the one thing we know for sure is that most of the numbers presented in this presentation WILL CHANGE!

3. Governor’s Budget Update The State Budget Process

4. Governor’s Budget Update

5. Governor’s Budget Update
The greatest uncertainty comes from state revenue collections, especially given the state’s volatile personal income tax.

6. Governor’s Budget Update
Predicted inflation is important to us because of our low funding. Our funding may not keep pace with inflation or other mandated expenses.
Stock markets are anticipating stronger growth. Inflation anticipated to rise to 2% over the next couple of years.

7. Governor’s Budget Update
State revenues are also affected by property tax collections. Property tax collections could fall short if higher interest rates depress new home sales, which in turn would increase the General Fund obligation under Proposition 98.

8. Governor’s Budget Update

9. Governor’s Budget Update
Problem illustrated below anticipated expenses exceed anticipated revenue!
Travis does not get concentration funds
This is a graph illustrating revenues with automatically increasing expenses. The revenue area or the yellow block is significantly reduced for us because Travis doesn’t receive concentration funds. We only get supplemental grant funds with expenses much more than we’re receiving in revenues. So cut that yellow block in half and that’s Travis.

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16. Governor’s Budget Update What Does the LCFF Mean For Travis?
Travis Unified School District –
LCFF
Per ADA Funding
Projected ADA
Projected LCFF
Total Revenue
$8,289
5,479.18
$ 45,416,997
Discretionary Funds – ONE TIME
Total
$48 (one-time) X P2 ADA =
$ 260,677.92

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Special Education costs increase as overall funding declines. There is no mechanism in place to increase funding based on student needs. General fund contributions nearing 60% of total cost squeezing all other educational goals.

20. Governor’s Budget Update

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Additional Risks to district budget –
Potential elimination of impact aid funding – federal budget $1 billion = Travis $2.867 million
Reduction or elimination of Every Student Succeeds Act funding –
Title I, II and III - $378,000
Special Education IDEA funding - $877,000

22. Military Students

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Remember The Numbers Will Change But Current Two Year Forecast Will Require Expenditure Reductions In Our Budget

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If revenue projections don’t improve expenditure reductions will be necessary.

30. Governor’s Budget Update
There is slower economic growth due to:
Lower than expected state revenues
Low growth in Prop 98
Contribution to the state’s reserve
Top 1% earners who pay half of personal income tax and all Prop 30 taxes are doing as well as expected
Remember it is early in the budget cycle. Most of the numbers presented here will change, some dramatically.
Next Steps:
Second Interim Report due March 16
May Revision with budget updates from the State
Monitor projected revenue discuss possible expenditure reductions.

31. Questions?