1. 2006-2007 May Revise Update Presented By: Kari K. Sousa Assistant Superintendent Business Services

2. What is the May Revise? The May Revise is the Governor’s updated 2006-07 State Budget Proposal. Significant modifications are made to January budget estimates based upon Spring tax collections.

3. The State Picture 2005-06 California Revenues are up $4.8 billion from January estimates. Revenue increase resulted from personal income tax growth related to capital gains and stock options. Most of the revenue gains are believed to be one-time and will not carry forward into 2006-07. State budget continues to be structurally imbalanced.

4. Unrestricted General Fund 5.92% COLA or $308 per ADA Full Deficit Reduction from 0.892% to 0.00% Equalization Aid approximated at $70.44 per ADA ADA projected to decrease by 70.21 ADA from 22,020.33 to 21,950.12.

5. Unrestricted General Fund 2005-06 Revenue Limit $5,127.59 Less: Deficit Factor -45.74 Equals 05-06 Net RL $5,081.85 2006-07 Projected Revenue Amounts COLA 308.00 Deficit Factor Restoration 45.74 Equalization Aid 70.44 Total New Revenue 424.18 per ADA Percentage Increase 8.35%

6. Unrestricted General Fund New Revenue per ADA $424.18 Projected ADA 21,950.12 Additional Revenue $9,310,802 06-07 Revenue Limit per ADA $5,506.03 Decrease in ADA 70.21 Lost Revenue due to Declining Enrollment $386,578 Net RL Increase before Adj $8,924,224

7. Restricted General Fund Restricted Revenue Limit funding receives only a 5.92% COLA. State Categoricals receive a 5.92% COLA with no growth funding. Federal and Local Programs receive NO COLA.

8. Total General Fund Revenue Unrestricted RL Increase = 8.35% Restricted and Categorical Increase = 5.92% Fed and Local Increase = 0.00% PROJECTED NET REVENUE INCREASE = 6.93%

9. PROPOSED ON-GOING PROGRAMS CAHSEE Intensive Instruction –One-Time funding was provided in 2005-06 –$600 per eligible pupil is now on-going Oral Health Assessments for Kindergarteners After School Education (Proposition 49) Arts and Music Grants –$25 per pupil Preschool Options –Available for 4 year-olds in Decile 1-3 Schools Grades 7-12 Counselors –300:1 Ratio at HS - 500:1 Ratio at MS –Must supplement not supplant existing staffing

10. PROPOSED ONE-TIME PROGRAMS Digital Classroom Grant –$3,000 per class PE Grant for Standards Alignment and Staffing –$11.90 per student PE Equipment Grant –$43.48 per pupil Arts and Music Equipment and Supplies –$43.48 per pupil Low-Performing School Enrichment Block Grant –$50 per pupil

11. PROPOSED ONE-TIME PROGRAMS Instructional Materials –$43.48 per pupil English Learner Instructional Materials –$18.85 per pupil Teacher Classroom Supplies –$69.57 per pupil Library Reading Block Grant –$10.64/$12.69 per pupil Career Technical Ed Equipment and Materials Block Grant –$14.51 per pupil

12. CTA v. Schwarzenegger Settlement The settlement provides for added Prop 98 funding that was due for 2004-05 and 2005- 06. $2 billion was added to the base for May Revise and $2.9 billion will be paid out in installments. $300 million will be paid starting in 2007-08 and $450 million per year thereafter until 2013-14. Payments will be targeted at low performing schools

13. Question and Answer Time What is most likely to change in the Governor’s Budget before adoption? –CATEGORICAL PROGRAMS! Why does this budget look so good for education? –ITS AN ELECTION YEAR –THE RECENT SPECIAL ELECTION DID NOT GO WELL FOR THE GOVERNOR When is the State budget likely to be adopted? –WHO KNOWS? WE WILL ADJUST ACCORDINGLY.