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Governor’s May Revise

May 28, 2013

The News from Sacramento

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2012-13 State revenues are up $4.5 B The Governor’s May Revision paints a more pessimistic

economic outlook in 2013 and 2014 Is this really the case? Could the State be manipulating the numbers downward?

The LAO does not agree with the Governor LAO predicts stronger revenues to continue in 2013-14

When will we know? How do we plan?

© 2013 School Services of California, Inc.

General Fund Revenues in 2013-14

2012-13 2013-14$80

$85

$90

$95

$100

$95.4

$98.5$98.2$97.2

General Fund Revenues (In Billions)

January Budget May Revision

Source: Governor’s Budget May Revision 2013-14, page 10

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Proposition 98 ChangesDramatic swings in Proposition 98 estimates, but little change in ongoing K-12

Further reduce deferrals $2.5 B Fund Common Core implementation

$1.0 B Estimate of $170 per student in 2012-13

Increase LCFF first year dollars$240M

Adult Education $270M Special Ed backfill of sequestration cuts

$ 61M

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© 2013 School Services of California, Inc.

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2013-14 Revenue Projections

Revenue Limit

DeficitFunded

Revenue Limit

2012-13 Base Revenue Limit

$6,808.18 .77728 $5,290.31

2013-14 COLA 106.00

2013-14 Base Revenue Limit

$6,914.18 .81003 $5,600.68

Increase in Revenue Limit

$310.37

Guidance from RCOE and School Services recommends utilizing the lower of the two estimates for 2013-14 revenues until the State Budget is adopted:

1. Local Control Funding Formula2. Revenue Limit Funding

$310.37 x 21,488 ADA = $6,6,69,231 in additional revenue for 2013-14$1.9M was the original estimate for additional revenues based on 1.65% COLA

Multiyear Projection Unrestricted Funds – 2nd Interim Report dataincluding revised revenue

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Description2012-13

2nd Interim2013-14

Projected2014-15

Projected

Total Revenues/Other Sources $122 ,618,573 $129,207,829 $128,599,795

Total Expenditures/Other Uses ($131,785,238) ($130,982,885) ($133,210,092)

NET INCREASE (DECREASE) ($9,166,665) ($1,775,056) ($4,610,297)

Beginning Balance, July 1 $26,194,630 $17,027,965 $15,252,909

Ending Balance, June 30 $17,027,965 $15,252,909 $10,642,612

Ending Fund Balance Components

Revolving Cash/Stores $270,000 $270,000 $270,000

Unassigned - Economic Uncertainties $6,001,054 $5,793,807 $5,862,353

Assigned – MAA & Dell Refund $1,321,973 $1,143,371 $786,476

Estimated Excess / (Shortfall) $9,434,938 $8,045,731 $3,723,783

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Final Thoughts The economic outlook is much brighter Revenue limit increases are projected at

$4.4M $1.9 M was already included ADA projections have been reduced to reflect zero

growth This is our 3rd year of declining enrollment

LCFF may provide additional revenues Board and cabinet priorities are aligned and

include: Employee compensation Program development Reduction of class sizes