News

Tuesday, June 2, 2009

Update: anticipated budget cuts

The board of education will be discussing the possibility of further budget cuts at the Tuesday, June 9, meeting. The board is expected to make final decisions on Tuesday, June 16.

Deputy Superintendent Eric Smith explained: After a protracted budget stalemate, the state finally adopted a 17-month budget in February of this fiscal year. The February budget contained severe cuts to public education and was predicated on the passage of several ballot measures that went to voters on May 19, 2009. Since these propositions failed, the additional cost to the state is estimated to be $5.8 billion. In anticipation of the worst case scenario, the board adopted this year’s Fiscal Solvency Plan, which resulted in an additional $3.1 million in expenditure reductions targeted for the 2009-10 fiscal year.

Based on the outcome of the May elections, we knew there would be additional reductions to school funding to the tune of $617 million in the current year and $2.6 billion in reductions for the 2009-10 fiscal year.

Using this data, we estimated the loss of unrestricted revenue to be $1,068,949 in the elementary district ($762,371 in fiscal year 2008-09 and $306,578 in fiscal year 2009-10) and $4,129,494 in the secondary district ($2,203,850 in fiscal year 2008-09 and $1,925,644 in fiscal year 2009-10). However, since the deficit factor applied to the revenue limit will substantially decrease the overall revenue limit entitlement, it is anticipated that the elementary district will become “basic aid” in fiscal year 2009-10 by approximately $404,780. The net effect of this change will be that the lion’s share of cuts will have to be made in the secondary district since basic aid status will provide the elementary district with a “soft landing” after the loss of the first $306,578 in fiscal year 2009-10.

We anticipated that these cuts would reflect the “worst case” scenario before adoption of the 2009-10 budget. What we did not expect, however, was an additional reduction of $469 million to the revenue limit in fiscal year 2009-10, announced by the Office of Governor on May 29. The new information from the governor will result in an additional oss of $1 million to the secondary district but should have no impact on the elementary district due to its projected basic aid status. It is important to note that these cuts to the districts’ revenue limit follow the board’s action in late April of this year to cut $3 million from the 2009-10 budget.