1. Governor’s May Revise May 28, 2013 1

2. The News from Sacramento 2  2012-13 State revenues are up $4.5 B  The Governor’s May Revision paints a more pessimistic economic outlook in 2013 and 2014  Is this really the case?  Could the State be manipulating the numbers downward?  The LAO does not agree with the Governor  LAO predicts stronger revenues to continue in 2013-14  When will we know? How do we plan?

3. General Fund Revenues in 2013-14 © 2013 School Services of California, Inc. Source: Governor’s Budget May Revision 2013-14, page 10 3

4. Proposition 98 Changes Dramatic swings in Proposition 98 estimates, but little change in ongoing K-12  Further reduce deferrals $2.5 B  Fund Common Core implementation$1.0 B  Estimate of $170 per student in 2012-13  Increase LCFF first year dollars$240M  Adult Education$270M  Special Ed backfill of sequestration cuts$ 61M 4

5. © 2013 School Services of California, Inc. 5

6. 2013-14 Revenue Projections 6 Revenue LimitDeficit Funded Revenue Limit 2012-13 Base Revenue Limit$6,808.18.77728$5,290.31 2013-14 COLA106.00 2013-14 Base Revenue Limit$6,914.18.81003$5,600.68 Increase in Revenue Limit$310.37 Guidance from RCOE and School Services recommends utilizing the lower of the two estimates for 2013-14 revenues until the State Budget is adopted: 1.Local Control Funding Formula 2.Revenue Limit Funding $310.37 x 21,488 ADA = $6,6,69,231 in additional revenue for 2013-14 $1.9M was the original estimate for additional revenues based on 1.65% COLA

7. Multiyear Projection Unrestricted Funds – 2 nd Interim Report data including revised revenue 7 Description 2012-13 2nd Interim 2013-14 Projected 2014-15 Projected Total Revenues/Other Sources$122,618,573$129,207,829$128,599,795 Total Expenditures/Other Uses($131,785,238)($130,982,885)($133,210,092) NET INCREASE (DECREASE)($9,166,665)($1,775,056)($4,610,297) Beginning Balance, July 1$26,194,630$17,027,965$15,252,909 Ending Balance, June 30$17,027,965$15,252,909$10,642,612 Ending Fund Balance Components Revolving Cash/Stores$270,000 Unassigned - Economic Uncertainties$6,001,054$5,793,807$5,862,353 Assigned – MAA & Dell Refund$1,321,973$1,143,371$786,476 Estimated Excess / (Shortfall)$9,434,938$8,045,731$3,723,783

8. Final Thoughts 8  The economic outlook is much brighter  Revenue limit increases are projected at $4.4M  $1.9 M was already included  ADA projections have been reduced to reflect zero growth  This is our 3 rd year of declining enrollment  LCFF may provide additional revenues  Board and cabinet priorities are aligned and include:  Employee compensation  Program development  Reduction of class sizes