February 14, 2008 - State Budget Update
By David Walrath
February 14, 2008
UPDATED WITH ASSEMBLY ACTIONS TAKEN TODAY
Today the Assembly followed the Senate actions regarding reducing the current year budget by almost $500 million for K-12 education by approving the Public Transportation Account shift and deferring the advanced apportionment from July to September. While there are a few minor differences between the Senate and Assembly action; we anticipate those minor differences will be fully resolved in time for the Legislature to send a mid-year package to the Governor by February 22. We do not have detail on all the mid-year funding reductions, that detail probably will not be available until early next week.
The Assembly, as did the Senate, attempted to ensure that any reductions would not have an immediate or direct effect on school district 2007-08 programs.
The Legislative Analyst’s Office (LAO) will be releasing her analysis of the 2008-09 State Budget next week. We will send another update after the analysis is released.
The Senate Budget Committee acted during the evening of February 13 to make its first round of mid-year budget reductions. The Assembly has not acted yet. Consequently, this should not be considered as a final deal of the mid-year reductions; however, I believe most of these will be adopted by the Assembly.
The most significant education proposal was to use Public Transportation Account funds ($409 million) for current year Home-to-School Transportation costs. This reduces the Proposition 98 base for the current year and, therefore, also for 2008-09. The Committee also adopted $507 million in other Proposition 98 savings. The important point is that these reductions were on funds that were not otherwise expected to be allocated to schools during the current year. This is a reduction that is intended to create no harm.
Finally, the Senate did propose to make a one-time transfer of the July advanced apportionment from July to September.
SSDA is working with legislators and staff to ensure there are small school district protections for any cash flow problems that could be created by this deferral.
SSDA had sent you some recommendations on preparing for the mid year and budget year reductions. In addition to those we are making the following additional suggestions:
Over Notice of Non-Reemployment on March 15
• While this is cruel it may be necessary – the fiscal situation could get worse.
Summer School
• Decide whether non-mandatory summer school can be afforded. Not offering permissive summer school could be a cost savings.
Internal Borrowing
- See which funds can be available for borrowing after July 1
Job Sharing
- Look to share employees with other districts
Shameless Marketing
- Attend the SSDA Annual Conference to learn how your fellow small school districts are acting to increase revenue, increase flexibility and reduce expenditures. Visit www.ssda.org for more information.
~Dave Walrath
