1. FY 2012 Budget Preparation Somerset County Board of Education Regular Session December 14, 2010 Vicki Miller, Director of Finance Karen-Lee N. Brofee, Superintendent of Schools

2. Property Tax Revenue Trend Somerset County FY ’09 14,975,864 FY ’10 15,877,189 FY ‘11 15,697,433 ’09 to ’10 Difference 901,325 6.0% ’10 to ’11 Difference -179,756 -1.1% State Average (09-10) 6.8% (10-11) 2.8% Department of Legislative Services, County Budgets

3. Local Income Tax Trend Somerset County FY ’09 6,676,022 FY ’10 6,222,300 FY ‘11 6,086,752 ’09 to ’10 Difference - 453,732 - 6.8% ’10 to ’11 Difference - 135,548 - 2.2% State Average (09-10) - 8.1% (10-11) -3.0% Combining Property and Income ‘10-’11: -1.4% or -315,304 Department of Legislative Services, County Budgets

4. Total General Fund Revenues Somerset County FY ’09 34,264,970 FY ’10 31,921,356 FY ‘11 33,657,840 ’09 to ’10 Difference -2,343,614 - 6.8% ’10 to ’11 Difference 1,736,484 5.4% State Average (09-10) – 2.4% (10-11) +2.6% Department of Legislative Services, County Budgets

5. State Reductions to Public Schools 2009 to 2011 2009 -$146,543,800 2010 -$436,010,200 2011 -$516,621,800 Funding Formulas; School Improvement Grants, Aging Schools, Quality Teacher Incentives, Student Transportation, Science and Math Initiative, Environmental Education, Gifted and Talented, Food Services, Principal Fellowship Program, School Based Health Centers

6. State Aid by Major Programs 2011 to 2012 FOUNDATION PROGRAM 1.0% Increase COMPENSATORY AID 1.7% STUDENT TRANSPORTATION 1.3% SPECIAL ED FORMULA.5% ELL PROFICIENCY GRANTS 7.7% GUARANTEED TAX BASE - 9.7% Decrease GCI.9% OTHER ED PROGRAMS -2.0% RETIREMENT 8.6% TOTAL: 2.4%

7. JOBS FOR EDUCATION FUNDS SOURCE: Federal Legislation Jobs for Education Funds STATES MARYLAND’S DISTRIBUTION 20% -- New $ for 2011 80% -- Reduction in State Obligation to Locals for 2012

8. PROCESS FOR JFE FUND DISTRIBUTION Step 1: Locals receive RESTRICTED GRANT Somerset = $853,947 Step 2: Locals receive a reduced Unrestricted State Aid Revenue figure for FY 2011 by 80% of the total JFE ($-683,158) Step 3: State escrows this amount for FY ’12 State Aid Step 4: Locals may spend 20% as permitted in restricted categories Somerset = $170,789

9. JOBS FOR EDUCATION FUND RECOMMENDATION Knowing that this is one time money, Knowing that we are scheduled to lose all ARRA and SFSF $, Knowing that certain of these contractual positions have been valuable and impacted student achievement, Recommend: $170,789 carried forward to FY ’12 to equitably sustain whatever is possible of the intervention positions at the elementary and secondary levels

10. FY 2012 Budget Preparation “Five Numbers” Tell Somerset’s Story 80% $589,701 $420,491 $212,255 $1,222,447

11. FY 2012 Budget Preparation 80% represents the amount of the unrestricted budget committed to salaries and fringe benefits, i.e., people costs #1

13. SUMMARY OF FY 2011 BY OBJECT 64% 21% 10%

14. FY 2012 Budget Preparation FY ’11 $589,701 but FY ’12 $589,701 Represents the amount of State Fiscal Stabilization Funds (SFSF) These are ARRA (stimulus) funds and will end on September 30, 2011 These were unrestricted monies moved to restricted funds These funds are used for summer school, textbooks, Intervention teachers, technology #2

15. FY 2012 Budget Preparation FY ’11 $420,491 BUT FY ’12 $ 420,491 ARRA (stimulus) funded positions that will end on September 30, 2011 Tutors (elementary and secondary); Reading Intervention teachers; ELL Support #3

16. FY 2012 Budget Preparation FY ’12 Expectation $212,255 Represents the pension costs estimated to be passed through to locals Based on SB 141 (2010 bill that made it to 3 rd reading) 1% in FY 2012 3% in FY 2013 5% in FY 2014 and 2015 #4

17. FY 2012 Budget Preparation State retirement payments for local teachers account for more than two-thirds of State’s annual pension costs Ratio of retirees to active members is increasing Pension costs for state employees and teachers will total $1.5 billion in FY 2012; costs related to education employees total $1.0 billion

18. FY 2012 Budget Preparation $1,222,447 Represents the total funding needed to maintain “status quo” before considering any type of salary increase, utility increase, insurance increase (Revenue from the State has decreased the last three years) #5

19. FY 2012 Budget Preparation Seeking Board and SCPS Staff and Community INPUT How would you direct us to approach this highly probable shortfall? What are your priorities for our building of this budget? What are you willing to lay aside or reduce? Do you have any direction for gathering the input?