Wednesday, May 13, 2009

Budget Update 5-13-09

The California Department of Education (CDE) released estimated allocation amounts for the initial State Fiscal Stabilization Funding (SFSF) last weekend. We now know that our one-time allocation will be $2,025,402 for phase I. Since this is 70% of the allocation to backfill our revenue limit, we expect to receive the estimated remaining $868,029 sometime this fall. This constitutes approximately $369 per ADA.

This is good news and will help to save jobs in the Sylvan Union School District. I will recommend that we split our allocation between the 2009-10 and 2010-11 school years to help balance our budget and save jobs.

In addition, you may already know that our allocation for Title I and IDEA (Federal Special Ed) has also been identified. We expect to receive $460,158 for Title I schools and estimate $1,500,000 for IDEA. Both these one-time allocations will help, even though each will carry restrictions on how the funds can be spent.

A summary of our ARRA funding projections is as follows:

Stabilization $ 2,893,431
Title I $ 460,158
IDEA est. $ 1,500,000
Total ARRA $ 4,853,589 ($619 per ADA)

Follow this link to the CDE for allocations:

While this is good news, we are also faced with more probable bad news. Yesterday, May 11th, the Governor announced the state faces a $21.3 billion Budget gap for 2009-10 if the Budget-related measures on the special election ballot fail. On Thursday he is planning to release two versions of the May Revision-one assuming that the special election measures pass and one assuming that they fail. He indicated that both the state and the nation are in the deepest recession since the Great Depression and that, for the first time since 1938, the state faces a decline in personal income.

The Governor estimates the revenue shortfall at $15.4 billion through 2009-10, almost double the projection made by the Legislative Analyst's Office shortly after the 2009-10 Budget Act was enacted. In less than three months, the 2009-10 State Budget, which the Governor and legislators hailed as closing a $40 billion Budget gap and providing a $2 billion reserve, is now projected to end with a $19 billion deficit. Keep in mind that, while the weakened economy is largely to blame for this new shortfall, one-third of the problem can be traced to the questionable Budget-balancing solutions the Governor and Legislature have put before state voters in this special election. Recent polling of likely voters shows these measures in jeopardy with the election fast approaching.

What does this mean for Sylvan?
Some estimates indicate that we could lose as much as $1,000 per ADA due to the economic change and failure of the propositions. This could more than negate our good news with the stimulus funding.

What are we going to do?
We will stay the course until after the election and the May Budget Revision is complete. This will probably extend into June. It is entirely possible that the legislators will renew their battle lines and entrench in partisan politics as usual. We will have no choice but to delay our decisions on rescinding layoffs until we know the impact of the election and May revision.

In the meantime, stay tuned, keep informed, vote and send me your questions.

No comments: