June 19, 2008

Budget Update

Late yesterday, it appeared that the Administration’s May Revision cash flow proposal was receiving serious consideration by the Budget Conference Committee. The Administration’s cash flow proposal was to delay a number of special purpose apportionment programs which are to start in September 2008 and instead defer funding until April 2009.  This proposal would have saved approximately $3 billion in cash flow that would not be paid between September 2008 and April 2009. While that proposal was rejected by the Assembly and the Senate, some form of cash flow changes will be considered by the Budget Conference Committee. 

However, the cash flow needs of the state are becoming more serious and, consequently, some form of this proposal could be adopted.  I recommend that all districts continue to increase their reserves in order to add sufficient internal borrowing for addressing even more significant changes in school district cash flow.

If the conferees accept additional cash flow changes, I will continue to advocate for greater school district fiscal flexibility in order to mitigate the effects on school districts.

~Dave Walrath

dwalrath@m-w-h.com

Dave Walrath

dwalrath@m-w-h.com