May 17, 2010

May Revision Top Issues for K-12

The following is a brief summary of the K-12 highlights in the May Revision. An even shorter summary is: “Other than child care, nothing really new for most school districts.” The Budget and May Revision is DOA with the legislative Democrats on health care and social services, and is not being well-received on school funding and further cuts to state employee salaries.   

• The 2010 California economy improved between the January estimate and the May estimate.
• The 2009 California economy was worse than expected and is reflected in lower 2009-10 tax revenue.
• 2010-11 improvement is not reflected in the 2010-11 General Fund tax revenue estimates or property tax revenue estimates.
• No new 2009-10 revenue limit cuts.
  • Unemployment and PERS up in 2009-10 and 2010-11.
  • “$500 million over appropriation” in 2009-10 due to 2009-10 revenue reduction.
• No change to $250 per ADA cuts for 2010-11.
  • Cuts not targeted to administration, etc.
  • No change in delay of maintenance factor.
  • Property Tax revenue estimates down for both 2009-10 and 2010-11. -4.1% and -3.1% respectively.
  • Minor change in COLA estimate.
• County service consolidation deleted and restoration of $16.8 million of the proposed $45 million county cut.
• State Child Care funding to be eliminated in 2010-11.
  • Preschool not eliminated, nor after school programs.
  • Rebench Proposition 98 down by $1.4 billion to reflect child care elimination (legal issue because it is not a shift to another agency).
• Other Changes
  • Some funding shifts.
  • STAR 4th grade writing proposed to be restored.
• Legislature will not be happy.

 ~Dave Walrath