1. The Education Funding Crisis Walnut Valley Education Association Presented by Ron Bennett President and CEO Ron Bennett President and CEO

2. A State In Crisis The state’s economic problems are significant and well publicized The state’s commitment to public education is, however, far below other states California is near the bottom of the Quality Counts and National Education Association (NEA) rankings of per-student expenditures The latest recession has caused further dramatic cuts to an already fragile funding model for public education The cuts are deep, broad, and long lasting 1

3. Education Funding Remains at Risk California state funding for education was cut by 15% beginning in 2008-09 – five years ago! And education has contributed about $7 billion per year to resolution of the state’s Budget crisis – a total of more than $35 billion No other segment of the Budget has been cut anywhere close to that much and most other segments of the budget have actually grown over the five-year period But the Governor’s challenge is increasingly difficult Our cyclical economy isn’t cycling fast enough The state is running out of solutions We think the Governor is making the most of a bad situation, but it isn’t going to be resolved any time soon These conditions also apply nationally 2

4. Another “Crisis” Budget The Budget proposals by both the state and federal government for 2012-13 represent another desperate effort to get through a bad time, not a permanent solution The California Budget depends on passage of new temporary taxes mid-way through the year The structural imbalance continues to dog the state’s recovery The feds are spending 40% more than they are taking in – it will take monumental effort to bridge the gap 3

5. Notes

6. Effect on Local Districts 5

7. Cuts to California School Districts A 15% cut to the revenue limit beginning in 2008-09 A 19.84 % ongoing cut to most categorical funding beginning in 2008-09 Threats of additional cuts in 2009-10, 2010-11 and 2011-12 that were reduced or reversed at the last minute Shift of county mental health responsibilities (AB 3632, Chapter 1747/1984) in 2010-11 “Trigger” cuts in 2011-12 when state revenue projections came in low $13 per ADA, ongoing Plus $42 per student in lieu of a cut to transportation dollars Better than the $300 cut threatened, but still another cut 6

8. Funding Per ADA – Actual vs. Statutory Level Loss due to midyear cut $4,866 7

9. Economics Still Drive All Policy Decisions In both California and Washington, policy is set by budget decisions The debate is not driven by policy, it is driven by economics – do we have the money? Economic decisions have led to poor policy results for education We need a longer school year, not a shorter one We need lower class sizes, not higher We need more options for students, not fewer We need stability for our professional teachers, administrators and classified staff, not layoff notices All of these undesirable outcomes are an effort to “do it cheaper,” not “do it better” The long-term societal and economic impacts of these short-sighted polices will be profound We will have workforce issues far into the future A suboptimal workforce leads to more dependence on government, not less 8

10. Bottom Line – Plan for the Long Term Bottom line, we don’t see a return to the “old normal” any time soon We think the state and the nation face tremendous challenges and fundamental problems that cannot be resolved with quick fixes As a result, we think it is time to consider the present situation to be the “new normal” and plan accordingly We continue to recommend conservative policies at the district level Others have induced plenty of risk to your district, you don’t need to add any more 9

11. Notes

12. Education Spending in California

13. California’s Education Spending Continues to Lag 12

14. California’s Education Spending 13

15. California’s Education Spending 14

16. Choices and Priorities Matter California demands and deserves a “world-class” education system The top five states, in terms of student performance, are Vermont, Rhode Island, Wyoming, New Jersey, and Maine The bottom five are California, Idaho, Mississippi, Nevada, and Arizona What’s different? California has fallen from number one to number 46 in per-ADA funding; and the results bear that out 15

17. Final Thoughts Public education is totally dependent upon tax dollars; local, state, and federal Great economics generate more tax dollars for all public sector purposes Weak economics force tough choices We don’t see much near-term improvement in either national or state economics But we also think that education is the key to a vibrant future for America In five years, no one will remember the recession – so we need to make sure they are still able to READ about it! 16

18. Thank you