06.14.11 Board Meeting Budget Update:
Trustees received a report from Associate Superintendent Dr. Casey Goodall on the state and TUSD budget. During the May 24th Board of Education Meeting Dr. Goodall reviewed the Governor’s May revision, a dramatically more positive proposal than his January budget. While there have been fundamental improvements in the California economy, the budget includes optimistic assumptions, which may lead to problems in the future. Dr. Goodall projected two ending balance scenarios with and without the approval of the tax extension. At the state level, the Governor is pressuring the legislature to pass a “balanced, no-frills budget” by June 15. Next steps are to be cautious and develop our June budget based on the Governor’s proposal. Monitoring of the California budget process, the election process and enrollment/attendance will also continue.
05.24.11 Board Meeting Budget Update:
Trustees received a report from Associate Superintendent Dr. Casey Goodall on the TUSD budget. Dr. Goodall reviewed information presented by the Governor in the May Revise, given on May 16th. The May Revise is dramatically more positive than his January budget proposal, but while there have been fundamental improvements in the California economy, the budget includes optimistic assumptions, which may lead to problems in the future. The Governor has proposed to maintain flat funding for 2011-12 and to eliminate the $2.1 billion deferral that was enacted in March. However, because the proposed funding level is predicated on the extension of the temporary taxes, and because there are several other risk factors to the budget, districts will be advised not to reverse any cuts, reinstate any layoffs, or do anything else that would increase their levels of expenditures until the budget is actually signed. The complete PowerPoint presentation is available in the Documents section below.
04.12.11 Board Meeting Budget Update:
Trustees received a report from Associate Superintendent Dr. Casey Goodall on the TUSD budget. Dr. Goodall reported at the last Board meeting that: the Governor has made comments that the $2.1 billion of cuts to K-12 education which were widely anticipated if the tax extension failed to be on the ballot, may have grown to as large as $5 billion. The impact to Tracy Unified School District would grow from the $3.1 million budget shortfall identified on March 2nd, to approximately $10.5 million.
To develop our local budget, we depend on policy statements from the Governor as well as projections from a variety of sources. These guidelines are consolidated into one “dartboard” which all school districts use as building blocks of their current budget assumptions. The “dartboard” which included tax extensions is now invalid. No new “dartboard” has been developed. There is currently no official source of budgeting information.
Governor Brown is scheduled to revise his January budget by May 14th. This revision will serve as the basis of a new “dartboard,” and a new set of official guidelines on which districts can rely. However, any proposal by the Governor will depend on action by the Legislature.
A two-thirds majority is required to suspend Proposition 98, which is a necessary action to cut funding to schools beyond the $2.1 billion statewide originally planned.
A majority vote is required to approve a budget, but the budget must be balanced.
The current lack of information from the state makes it equally likely that no cuts will be required as that $10.5 million of reductions will be required. However, the district must submit a balanced budget on June 28th or the San Joaquin County Office of Education will have no option but to disapprove the TUSD budget.
03.02.11 Budget Update:
During a special meeting of the Board of Education, the Board approved the Modified Budget Reduction Plan to cut $4.4 million from the budget if the tax extensions on the June ballot do not pass, or a plan to cut $63,000 needed to reduce with the passage of the tax extensions. The district is hopeful that with the continued hiring and spending slow down, efficient and creative use of categorical funds along with the passage of the extensions in June, we will only have to implement the $63,000 of reductions in order to balance the budget for the 2011-12 school year.
The entire presentation on the Second Interim Report, the Modified Budget Reduction Plan and the PKS lists is available in the Documents section below.
02.22.11 Budget Update:
During the regularly scheduled Board Meeting, The Board received a recommendation for a two-part budget reduction plan to cut $4.4 million from the budget if the tax extensions on the June ballot do not pass, or a plan to cut $413,000 needed to reduce with the passage of the tax extensions. Hopefully, with the continued hiring and spending slow down, efficient and creative use of categorical funds along with the passage of the extensions in June, we will only have to implement the $413,000 of reductions in order to balance our budget for the 2011-12 school year.
The $4.4 million reduction plan includes a list of $884,739 of reductions to restore if the election is successful, and a shortfall of $3,109,828 which the District will be working with different constituent groups to bridge, but which will be restored with positive results of the election.
The entire presentation is available in the documents section below.
02.08.11 Budget Update:
The new TUSD budget reduction target of $6.7 million addresses the $1.23 million of reductions required as of last year in addition to the $5.45 million of assumed decrease to K-12 education if proposed tax extensions do not pass. This new target of $6.7 million was calculated based on uncertainty in statewide funding, staffing reductions and retirements, special education growth and declining enrollment.
Due to enormous uncertainty, the Second Interim Report and the June budget may reflect very different realities. Whereas funding sources are volatile and uncertain, staffing and budgeting timelines are structured and rigid. Revenues based on planned enrollment falls far short of planned expenditures for staffing and critical allocations and operational costs. All options threaten critical programs and the long-term survival of the district.
The reductions identified for July 1, 2011 from the previous year’s budget reduction plan (approved March 2010) have been reviewed. No decision has been made to adopt items from the list, but the Board will need to consider these items and other sources to reach the $6.7 million reduction target. It appears the district will need help from employee groups to shoulder responsibility to close the deficit.
The timeline for the reduction plan is: a District Budget Advisory Committee meeting on February 9, a Board meeting with a presentation of the plan on February 22 (West High Gym, 7 p.m.) and a Special Board meeting to adopt the new plan to take place on March 2 (DEC Board Room, 7 p.m.).
It is important to note, the proposed tax extension possibly on the ballot in June could save TUSD and drop the target by $4.6 million.*
A full PowerPoint presentation detailing this information, given during the February 8th Board Meeting, is available in the Documents section below.
*Governor Brown’s 2011-12 budget proposal provides for an extension of temporary revenues to support programs our students need and deserve. Over the last several years, K-12 education funding has taken a disproportionate amount of budget cuts with state and local funding for schools cut by more than $18 billion, or about $1,900 per student in the last three years.
To begin to reverse this downward spiral, Californians must retain the revenues that enable us to invest in our schools and students. The Governor’s budget proposal to limit further cuts to schools in 2011-12 is dependent on voter approval of an extension of existing temporary tax increases. A ballot measure to extend temporary revenues will help prevent further cuts to schools, and without this extension the LAO reports that funding for schools would fall by at least $2 billion, or more than $335 per student. If a measure is placed on the June 2011 ballot calling for a five-year revenue extension to protect our schools and students by making education a priority in our state, it could result in a savings of up to $4.6 million to our district. Reducing our $6.7 million target by $4.6 million would go a long way in retaining many of our valuable programs and services.
01.25.11 Budget Update:
As stated in the last update, the Governor’s State Budget Proposal was given on January 10, 2011. The Governor discussed an 18-month budget gap of $25.4 billion - $8.2 billion of the problem occurs in 2010-11 and $17.2 billion occurs in 2011-12. Governor Brown proposed a two-part solution with $12.5 billion in cuts to agencies other than K-12 and $12 billion in additional revenue. The voters of California will be asked to approve a five-year extension to the temporary taxes enacted with the 2009-10 Budget. The three tax extensions which will be placed before the voters are: a 0.25% surcharge on the income tax, a 1¢ increase in the sales tax, and a 0.5% increase in the vehicle license fee and a reduction in the dependent deduction.
The ballot measures above will not be presented to voters until June. TUSD, however, is constrained by statutory budget and staffing timelines. Therefore, if the measures fail, it will be too late to make reductions. In light of these deadlines, it is fiscally responsible for TUSD to presume a failure at the ballot, which would result in a $2.2 billion reduction to education and an estimated $354.16 per student reduction leading to approximately a $5.4 million reduction in funding to TUSD.
In the coming weeks, staff will be working on a budget reduction plan in anticipation of the $5.4 million reduction in funding. A special Board meeting to adopt the budget reduction plan will take place on March 2.
01.11.11 Budget Update:
The Governor’s State Budget Proposal was given on January 10, 2011. The Governor discussed an 18-month budget gap of $25.4 billion with $8.2 billion of the problem occurring in 2010-11 and $17.2 billion occurring in 2011-12. Governor Brown proposed a two-part solution with $12.5 billion in cuts to agencies other than K-12 and $12 billion in additional revenue. The voters of California will be asked to approve a five-year extension to the temporary taxes enacted with the 2009-10 Budget. The three tax extensions which will be placed before the voters are: a 0.25% surcharge on the income tax, a 1¢ increase in the sales tax, and a 0.5% increase in the vehicle license fee and a reduction in the dependent deduction.
The ballot measures above will not be presented to voters until June. TUSD, however, is constrained by statutory budget and staffing timelines. Therefore, if the measures fail, it will be too late to make reductions. In light of these deadlines, it is fiscally responsible for TUSD to presume a failure at the ballot, which would result in a $2.3 billion reduction to education and an estimated $365.08 per student reduction leading to approximately a $5.7 million reduction in funding to TUSD.
While we are thankful to Governor Brown for stating that K-12 education has, “borne the brunt of spending reductions in recent years,” the current 2011-12 budget proposal does not guarantee funding at the same level as the current year. Furthermore, the current funding level is not appropriate or adequate to our students’ needs. This important fact should not be forgotten.
Our Financial Services team will be attending the School Services Workshop and will work the remainder of the month on these figures.
During the next board meeting, on January 25th, we will have updated figures and plans.
This time of continued fiscal crisis is undoubtedly stressful on all districts, its students, parents and staff members. We hope first and foremost, for no further reductions, but if they are required, we will maintain our use of creative solutions and ideas to continue our excellent programs for the students of Tracy.
12.15.10 Budget Update:
We are nearly halfway through the 2010-11 school year and our staff members' outstanding efforts are shining through our numerous student achievement stories. A big "Thank you!" goes out to our staff members, certificated, classified and management, for doing more with less and educating, inspiring and leading our students to success.
We are still, however, in the midst of facing California’s ever-increasing budget crisis. While the depth of further reductions are not yet known, the state’s estimated shortfall is a staggering $25.4 billion, with a good portion of the cuts most likely coming from K-12 education. This anticipated statewide cut to K-12 education may lead to additional cuts to TUSD for the current school year. A recent report by the California Legislative Analyst showed the state must address a budget problem of $25.4 billion between now and the time the Legislature enacts a 2011-12 state budget plan. The budget problem consists of a $6 billion projected deficit for 2010-11 and a $19 billion gap between projected revenues and spending in 2011-12. Similar to the forecast of one year ago, the Legislative Analyst projects annual budget problems of about $20 billion each year through 2015-16.
According to the adopted budget reduction plan, the District implemented $3 million of budget reductions at the beginning of the 2009-10 school year and $12.9 million of cuts at the beginning of the 2010-11 (current) school year. Depending on the Governor’s proposal, the announcement may require cuts for the 2011-12 school year be implemented. This sustained decrease of nearly forty percent of our district budget will continue to dramatically change the way we operate and organize our district.
The impact of these reductions will become clearer when Governor Brown proposes his state budget on January 10, 2011.
Tracy Unified is being as proactive as it can in preparing for potential reductions. The goal of the TUSD Board and administration is to create as much operational and fiscal flexibility as we can so we are prepared to react to the state budget and meet our statutory deadline for adopting a balanced budget for next school year.
We have a long way to go before the budget is finalized, and as always, we will be updating you regularly as we unravel the specifics of the proposed cuts and their far reaching implications for our District.
First Interim Report
Given the dire financial condition of the state, it is important to remember that the assumptions used in the First Interim Report for the current year and the multi-year projections will likely change when Governor Brown presents his 2011-12 budget plan on January 10, 2011. Once the Governor presents his proposed budget, TUSD will update its projections and report at the January 25, 2011 Board meeting the projected impacts on the District budget.
The First Interim Report does confirm a positive review in which the District will be able to meet current obligations for the current and two subsequent fiscal years.
The full report, along with a PowerPoint Presentation summarizing it and the budget outlook, are posted in the documents section below.