1. Governor’s Proposals for 2003-04 State & Education Budget January 14, 2003 School Services of California Sacramento, CA Presented by Phil White Deputy Superintendent Business Services Oakland Unified School District

2. Overview 2003/04 State Budget Gap now projected at $34.58 Billion requires mid-year cuts –Balancing the 2003-04 Budget $20.7 Billion cuts/savings $8.1 Billion new state taxes $2.1 Billion Transfers/other revenue $1.9 Billion Fund shifts (from the General Fund) $1.6 Billion Loans/Borrowing

3. Education Budget 2002/03 Governor’s December Proposed Cuts –2002/03 Mid-Year Cuts $1.8 Billion K-14 $980.9 million Revenue Limit cut (2.15%); 3.66% for special education & categoricals $180.7 million target cuts $714.8 million other cuts –Community Colleges Governor’s January Proposed Cuts –In addition to the December cuts: $481.7 million additional 7.46% cut in categoricals except Special Education, hourly programs, pre-school and nutrition

4. Education Budget 2003/04 Continue all 2003 mid-year cuts –K-14 totals $1.62 Billion Plus an additional $1.58 Billion in cuts: –Most categoricals cut an additional 1.28% with a new Block Grant (64 programs) that excludes Special Education, Child Nutrition, High-Priority Schools, Low-Performing Schools, K-3 CSR and Child Development from the 1.28% cuts.

5. School Services of CA Analysis Either the Governor’s Cuts or the Equivalent will occur for both 2002/03 and 2003/04 The Legislature will act on Mid-Year cuts by the end of January Expect some flexibility in the use of Block Grant funds The Governor’s Budget may be ceiling, not the floor

6. School Services of CA Analysis The Legislature has not agreed to the Governor’s cuts The least reliable budget in recent memory Take actions now to reduce spending and to prepare for the State budget cuts –Hiring freeze –Fill critical positions with sub, temps or retirees –Prepare seniority lists –Defer expenditure decisions –Use bond funds, if available, for facility upgrades –Use one-time dollars to build a reserve –Re-enrollment for health benefits –Review efficiency of operations –No encroachments in categorical programs, except Special Education –Automate process where possible –Consider cost effect early retirement options –Consider class size increases