Information From Tuesday Dec. 13 th Board Meeting

****This Information is from Dr. Smith’s Board wrap up… I am relating this to keep you up to date with the latest information…****

BUDGET UPDATE

The Fiscal Services Team led by Assistant Superintendent Doug Domene and joined by Fiscal Services Director Joan Velasco and Assistant Director Philippa Geiger presented an update on the many complicated issues surrounding the budget.

· State Mid-Year Cuts

Schools narrowly escaped even larger mid-year state cuts. On Tuesday afternoon, Governor Brown announced that California’s shortfall is $2.2 billion and will require mid-year cuts statewide, including cuts to education. While the PYLUSD will experience a $1 million cut in January, these cuts could have been much greater. The PYLUSD planned ahead by setting aside one-time money to absorb the possibility of these cuts. Good planning, Board of Education and Fiscal Services! As a result of the smaller than anticipated mid-year budget reduction, the PYLUSD will not have to implement the additional two furlough days that were tentatively placed on the calendar in the event there were more severe mid-year reductions.

· Orange County Tax Grab

California and the County of Orange are dueling over tax monies originally destined to Orange County school districts. In November, the County of Orange retained $49 million in tax revenues once destined for Orange County school districts. The reasoning was that the State would backfill this money to pay school districts. The State of California and the County of Orange are at odds over this perceived “tax grab”. This could result in a prolonged lawsuit. The most immediate impact to the PYLUSD would be our ability to meet our cash flow needs for next school year. As a result, the PYLUSD is obtaining a TRAN, a secured debt note to be used in the event that there is a delay of cash reimbursement from either the State or the County.

· Impact on the PYLUSD

PYLUSD will continue to face cuts for next school year. There are many pressures impacting the school district that will result in anticipated cuts next year between $8 million to $13 million, perhaps less depending on furlough days and the state budget cut amount when it is finalized. The Fiscal Services team gave a category-by-category overview of the pressures impacting the PYLUSD. They are:

· Loss of federal funds – Since 2007-08, $22 million in federal stimulus funds have helped the PYLUSD offset cuts. Next year, the school district will receive $0.

· Declining enrollment – Since 2007-08, enrollment has declined by 333 students. That is an ongoing loss of $1.7 million each year.

· Loss of revenue limit (State funding) – In 2007-08, the district received $5,822 per student. Today, the district receives $5,240 per student. The decrease is a cumulative four-year total of $50 million to the PYLUSD.

· Increase in health and welfare costs – In 2007-08, the per-employee health and welfare benefit was $10,651. Today, that per-employee benefit is $15,545. This is a $5.6 million increase in cost to the district.

· Loss of Cost of Living Adjustment (COLA) –Cumulative cost of living has been funded at 4.53% while the cumulative increase in consumer prices is 10.5%

· Increase in Consumer Price Index (cost of goods and materials) – See above.

In January, the Governor will unveil his proposed State budget which then goes to the Legislature. Let the games begin! Click below to see the PowerPoint presented last night.

http://intranet/super/photos/11-12/latest/BudgetDec2011.htm

****Please continue to check with the website for new information as we get it. Please continue to share this with friends and family and call your Legislators.***
Thank You for your support
Allyson Holt

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