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Budget, Layoff and Negotiations

On Monday, the Governor unveiled his blueprint for a 2011/2012 budget. The effects for education are, at best, unclear.

  • The optimistic view is that schools will be spared from the deep cuts that other budget sectors will experience, and schools will be funded in 2011/2012 at the same dollar level they received from the State in 2010/2011.
  • The pessimistic view is that school funding will be cut by up to $614 per ADA.

Why the wide variance?

The optimistic view assumes the Governor achieves $12.5 Billion worth of “revenue extensions and modifications.” To do this, the Governor will ask voters to extend the three temporary taxes (income tax, sales tax and vehicle license fee) that will expire on June 30, 2011. This will generate $8.5 Billion. The Governor must also convince the Legislature to make $5.1 Billion in program cuts ($1.6 Billion from Medi-Cal; $1.5 Billion from CalWorks; $500 Million from the UC/CSU; $750 Million from Developmental Services; $486 Million from In-Home Support services; and $308 Million from cuts to State workers’ pay).

The pessimistic view assumes that the Governor is not successful in generating $12.5 Billion in “revenue extensions and modifications.”

The results of the election will not be known until June, and will have a $4 Billion effect on State Funding ($51.5 Billion if approved vs. $47.5 Billion if defeated). As a result, school districts will almost universally be forced to take the following steps for 2011/2012:

  • Adopt two budgets, one that assumes passage of the ballot measure and one that assumes failure.
  • Pending the results of the June election, for planning purposes, assume that the funding guarantee is $47.5 Billion.
  • Not spend or commit the additional $250 per ADA which was provided on top of the May Revise funding level.
  • Conduct layoffs of certificated staff this Spring (in appropriate numbers, perhaps up to contractual limits).
  • Ensure that reopeners for 2011/2012 have been “sunshined” and that a negotiations timeline has been explored and is in progress that will give the district the flexibility to deal with a failed tax measure.
  • Engage in actual good-faith bargaining with certificated and classified unions as soon as possible.

We believe that acting proactively and with foresight, coupled with cautious, conservative and alternative budgeting, will give the district the greatest chance of getting through the budget crisis in the best possible position.

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