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Superintendent's Office

Budget Report

December 1, 2008

On November 6th, Governor Schwarzenegger called a special session to address the budget crisis in the state of California. Governor Schwarzenegger issued a budget advisory where he outlined concerns and possible solutions. This included a proposed $2.5 billion cut to K-12 education. A few days after the Governor's announcement, the Legislative Analyst's Office came out with their review of the Governor's special session proposals. The LAO agreed with the severity of the problems and the need for immediate action. However, the LAO recognized that school districts could not make such huge cuts mid year and has suggested a $1 billion cut that would consist of eliminating the .68% COLA and suspending and reducing funding in three categorical programs- deferred maintenance, instructional materials and professional development.

The special session ended last week without addressing the budget. However, today the governor stated that the state is in a fiscal crisis and called upon the legislature to address the projected $27.5 billion deficit quickly with both cuts to programs and additional revenue.

School District budgets are based on a three-year analysis of expected revenues and expenditures. Many of the assumptions placed in the revenue side of the budget come from the local county offices of education. They provide an estimated cost of living adjustment (COLA) for the "out years". When the budget was approved by the governor this past September, only a .68% COLA was provided with a true COLA of over 5%. As a result, some specific budget adjustments for the 2008-09 school year made by district staff enabled CUSD to still be able to present our first interim report at the next board meeting that remains positive for not only the 2008-09 but also for 2009-10 and 2010-11 school years.

However, the severity of the state budget crisis indicates that despite all those great efforts by our staff, additional cuts will need to be made for the 2009-10 school year. None of these cuts may be necessary if the state budget's allocation to K-12 education remains the same. However, it is anticipated that this will not happen. Unfortunately, we won't even know the potential or possible cuts until mid-January when the governor proposes the budget for the 2009-10 year. Even then, as we learn each and every year, the actual budget that is approved is often dramatically different than what was proposed in January.

If one was to ask the question, what parts of our budget are central to the core mission of the district: teaching and learning and then not address those in any budget cutting process, we would find ourselves in the position of having to make some adjustments to our expenditures that would allow CUSD to end with a positive balance. These might include:

Elimination of some district management positions

Elimination of some district wide jobs

Reducing the encroachment of special education on the general fund

Not completely funding all technology capital purchases

Having schools be responsible for copy costs

Reduce Resource Allocation funding to schools

Reallocation of district and school site staff

Reduction or elimination of furniture/equipment replacement for 1-2 years

Reduction or elimination of transportation funding

If we can make these adjustments or those similar to this, CUSD should be in a position to withstand some and hopefully all of the anticipated budget shortfalls.

Sincerely