1. 2009-10 First Interim Budget Highlights
Chief Business Official Mr. Tim Zearley

2. Education Funding in Other States
Source: Center for Reinventing Public Education

3. California Continues to Fall Further Behind
We certainly make up no ground in and actually lose some
We can expect our gap of $731 from the national average in per-pupil expenditures to grow to more than $1,700 (est.) in
Source: National Center for Education Statistics, 2009; Bureau of Labor Statistics 2008 CPI Inflation Calculator

4. General Fund Revenue Trends
Source: Legislative Analyst’s Office

6. Per-ADA Revenue Volatility
As in the past, we continue to have very high volatility in revenues directed toward education
continues the roller-coaster ride as revenue continues to fall
The reduction is a cumulative 14.7% that includes the effect of the $250 one-time reduction to revenue limits
California needs to provide a more stable revenue stream for schools

7. Per-ADA Revenue Volatility

8. Additional Revenue Limit Reductions
ABX4 2 (Chapter 2/2009) imposed a revenue limit deficit of % for , an increase from the 16.24% proposed in the May Revision
Loss of $331,320 from June Budget Adoption
In addition to the ongoing revenue limit cut imposed by the deficit factor, the Budget revision imposed a one-time reduction of $250 per P-2 ADA in
Loss of $640,924 from June Budget Adoption

9. Revenue Limit Deficit Factors

10. Impact of One-Time Revenue Limit Reduction

11. Changes from the Latest Budget: Home-to-School Transportation
The May Revision proposed cutting Home-to-School Transportation funding by 65% – YIKES!
The final result is that Home-to-School Transportation is now a Tier II program
This means it is reduced by 19.84% from the level of funding for and beyond
Loss of $167,907 from June Budget Adoption

12. Cash Flow
Actual apportionments will deviate significantly from the newly enacted schedule
Apportionments are pushed out even later in the fiscal year
Expect only 10% of your annual apportionment through the first three months
Month
Apportionments Adjusted for Deferrals
Pro-Rata Share of New Apportionment Schedule
July
*1.00%
20.00%
August
0.00%
September
9.00%
100.00%
October
*14.00%
138.90%
November
4.50%
50.00%
December
13.00%
144.40%
January
13.50%
150.00%
February
0.50%
5.60%
March
April
6.00%
66.70%
May
June
17.50%
7.50%
Total Principal Apportionment
* One-time adjustment to recover distribution of overapportionment in July 2009, which equates to a 1.5% reduction in October 2009.

13. Cash Flow 13

15. The Use of Multiyear Projections
Multiyear projections (MYPs) are required by AB 1200/AB 2756
Recognize that they are projections, not forecasts
Projections are expected to change as various factors change – they are not predictions
Projections are the mathematical result of today’s decisions based on a given set of assumptions
Forecasts are predictions of the future – there is a higher implied reliability factor than for projections
Projections will change anytime the underlying factors change – therefore plan

16. SSC Financial Dartboard
Factor
Statutory COLA (use for K-12 and COE Revenue Limit)
5.66%
4.25%
0.50%
2.30%
2.50%
3.00%
K-12 Revenue Limit Deficit
7.844%
18.355%
Net Revenue Limit Change
(2.63%)
(7.64%)
Other Revenue Limit Adjustments -
($250) per ADA
Special Education COLA (on state and local share only)
0.00%
State Categorical COLA (including adult education and ROC/P) Tier I
Tier II
Tier III
(15.38%)
(4.46%)
California CPI
1.20%
.50%
1.90%
2.20%
2.70%
California Lottery
Base $ $ $
Prop 20
$ 11.50
$ 13.25
$ 13.50
Interest Rate for Ten-Year Treasuries
3.10%
3.60%
4.10%
4.40%
4.70%
4.90%

18. Historical CBEDS Enrollment

20. Approve The Budget? Do we have adequate reserves? Yes
Are we deficit spending? Yes
If so, is it planned? Yes
It is a budget. Are our estimates reasonable? Yes
Can we sustain in MYP? Yes with reductions for declining enrollment
If so, then you can confidently approve this budget.