Plumas Lake Elementary School District

2009-10 Governor’s Budget Update

January 20, 2009

Governor’s Budget 2009-10

Governor’s proposal for mid-year reductions in 2008-09:

The 0.68% COLA included in the Adopted Budget is eliminated

Further revenue limit reductions of 4.5% – total deficit of 9.685%

The overall reduction to Proposition 98 for 2008-09 is $6.3 billion

Elimination of Deferred Maintenance match requirement

Reduction of Routine Restricted Maintenance Account set aside requirement

For 2009-10, the Governor’s proposal included:

COLA of 5.02%, but not funded

Revenue limit cut of $1.6 billion - 6.97% of new base revenue limit

Total deficit is 16.161%

No COLA for categorical programs

Categorical and other flexibility to help school agencies deal with the loss of funding

1

General Fund Revenue Collapse

$103.0 $102.6 $102.6

$87.5

$102.6

$86.3

$75.0

$80.0

$85.0

$90.0

$95.0

$100.0

$105.0

2007-08 2008-09 2009-10

Baseline Revenue Projections1

(In Billions) 2008-09 Budget Act2009-10 Governor's Budget

1 Excludes new tax proposalsSource: 2009-10 Governor's Budget

2008-09 Proposition 98 Guarantee

$50

$55

$60

($ in Billions)

2008 Budget Act 2009-10 Governor's Budget

$58.1 $58.1

MinimumGuarantee

No COLA$1.6 billion revenue limit cut

April deferralSpecial fund shift“Settle up” redesignation

MinimumGuarantee

$56.1 billion

$51.5 billion

Real Cut

Actual Spending

2009-10 Proposition 98 Guarantee

$50

$55

$60

($ in Billions)

2008 Budget Act Projections* 2009-10 Governor's Budget

$59.0 $59.0

MinimumGuarantee

Special fund shift

MinimumGuarantee

$56.3 billion

$55.9 billion

2008-09Proposition 98 Reduction

Actual Spending

Governor’s and Legislature’s Major Proposals

Provision Governor’s January Proposal Legislative Proposal (SBX14, vetoed)

Revenue Limit Eliminate 0.68% COLA; reduce further by 4.5%

Eliminate 0.68% COLA

Categorical Program Eliminations High Priority Schools Grant Program, Math and Reading Professional Development, Deferred Maintenance, Instructional materials, Professional Development Block Grant and others

Categorical Program Reductions Minor changes Many programs

Prior-Year Categorical Balances Transfer (with limitations) Transfer (with limitations)

Current-Year Categorical Allocations

Transfer (no dollar limitation) after public hearing

Limit Mega-Item transfer for Home-to School Transportation to “in” only

Routine Restrict Maintenance Set-Aside

Reduce from 3% to 1% Reduced from 3% to 1%

Deferred Maintenance Match Requirement

Eliminate Eliminate

Reserve for Economic Uncertainties

Reduce by half for 2008-09 and 2009-10 -

What Does it Mean for Our District?

Freeze on all non-essential expenses to preserve fund balance

Impact of eliminating deferred maintenance funding by $28,000

Impact of reducing RRM funding - $165,416

Ending fund balance – where do we stand relative to requirements?

No COLA - still have the following costs:

Fixed costs – electricity, gas, water, sewer, insurance

Step and column

6

Adopting the Budget

Balanced budget must be adopted by district prior to June 30, 2009

State Budget will most likely not be in place by then

Developing the budget requires:

Clarifying assumptions

How much revenue?

What flexibility options will be acted upon?

How will expenditures change?

Once the State Budget is adopted, the district makes adjustments to its budget within 45 days

7

Next Steps

Make necessary adjustments at Second Interim:

Eliminate 0.68% COLAReduce Revenue Limit additional 4.567%Eliminate Deferred Maintenance MatchSet aside unallocated State categorical funds

Prepare Multi-Year Projections based on what we know now

Begin building budget for 2009-10 based on what we know now

Review seniority lists for accuracy

Questions?

Thank you

Source: School Services of California (Slide 3, 4, 5, 6)