1. 1 LAUSD State of the Budget Understanding the District’s Budget Challenges October 2012

2. CA Education Funding: The Alligator Chart State funding for K-12 education has dropped significantly since 2007-08 Source: School Services of California, Inc. http://www.sscal.com/brl_calc.cfmhttp://www.sscal.com/brl_calc.cfm 2 Loss of COLA Loss of baseline dollars Loss due to potential failure of Prop 30 1 2 3 4 5 6

3. Supported by Governor Brown ¼ percent sales tax increase; up to 3% increase in personal income tax for high- income earners (>$250,000) Generates $6 billion in 2012-13 through 2016-17; with smaller amounts in 2017- 18, and 2018-19 DURATION: Sales tax for 4 years; Income tax for 7 years Supported by Molly Munger Increase in personal income tax for all but low-income earners, from 0.4% for lowest income individuals to 2.2% for individuals earning >$2,500,000 Generates $5 billion in 2012-13; $10 billion thereafter DURATION: Income tax for 12 years Proposition 30 Proposition 30 Proposition 38 Proposition 38 Source: http://www.lao.ca.gov/ballot/2012/30_11_2012.pdfhttp://www.lao.ca.gov/ballot/2012/30_11_2012.pdf Source: http://www.lao.ca.gov/ballot/2012/38_11_2012.pdfhttp://www.lao.ca.gov/ballot/2012/38_11_2012.pdf November Tax Initiatives Propositions 30 & 38 3 “The Schools and Local Safety Protection Act of 2012” “ Our Children, Our Future: Local Schools and Early Education Investment and Bond Reduction Act”

4. 1234567 891011121314 15161718192021 22232425262728 293031 4 Impact on our Instructional Calendar if Prop 30 Passes or Fails LAUSD’s school year might need to be shortened an additional 15 days -15 instructional days -15 instructional days Passes Fails 177-180 days 160 days + 2-5 instructional days + 2-5 instructional days Current 175 days

5. - $255 million - $252 million 2012-132013-14 ≈ - $400-500 million ≈ -$650-750 million What if Prop 30 Fails? LAUSD’s fiscal picture over the next 18 months if Prop 30 fails Prop 30 Cuts Structural Deficit 5

6. Impact of Federal “Sequestration Cuts” Federal revenue would be cut by nearly $65 million in 2013-14 6 * Estimated revenues Note: Assumes sequestration cuts are on-going at maximum cut of 9.1%. Sequestration cuts could range from 5.5% to 9.1% depending on congressional action. New America Foundation report estimated a $111 million impact because it used 2009-10 Census data which included stimulus funds which are no longer available. Source: Superintendent's 2012-13 Final Budget. Page IB - 9. Revenue if sequestration cuts go through