By Katy Murphy
Tuesday, September 23rd, 2008 at 2:29 pm in finances.
This morning, the governor signed the state budget, breaking the longest stalemate in California’s history. The education budget is essentially flat compared to last year’s, and schools will receive more money than the governor originally proposed.
But it will mean a loss of purchasing power, an analyst from the non-partisan Legislative Analyst’s Office explained last week. And, according to an article written to school CFOs by the policy director for the California Association of School Business Officials, it’s probably about to get worse:
Governor spares K-12 in budget vetoes
By Dennis Meyers, CASBO Assistant Executive Director, Advocacy and Policy
Governor Schwarzenegger signed the budget and its related bills this morning, blue-penciling $510 million in general fund expenditures. K-12 education was spared any deep cuts. The governor’s signature now puts into place everything that is needed to start getting money out the door to cash-strapped school districts, county offices of education, charter schools and community colleges. Of the $510 million in vetoes, here is the impact on education:
- $6 million from the $120,209,000 allocation to the non-Title I Immediate Intervention Underperforming Schools Program (II/USP). The governor felt that since the program ended in 2004-05, funding should not continue.
- $1.8 million in federal money that was being targeted to assist LEAs that are not meeting their Title I and III growth targets for English language learners. The governor said he didn’t see any information on what the program was going to achieve.
- $862,000 from the $11,742,000 allocation for child nutrition programs to help balance the budget.
- $16,400,000 from the $163,051,000 allocation for Stage 2 child care because of lower caseload expectations.
What is left is level funding year-to-year for categorical programs and a .68 percent COLA for school district revenue limits (1.02 percent for county offices). Categorical funding remained as funded in the conference committee budget which included $277 million for deferred maintenance, among other things.
You can breathe easy for the next few months, but school budget managers must remain vigilant with their cash flow. Schools have been receiving revenue limit money with a full 5.66 percent COLA since July. The next revenue limit payment from the state will correct the “overpayment” all at once. Concerning categorical funding, LEAs will be receiving their September apportionment along with their October apportionment at the end of October. But the worst is yet to come. Remember that about half of your January principle apportionment is going to be deferred until April. Additionally, revenues for this fiscal year are already starting to slip. That means that Proposition 98 may be over-appropriated come January which leaves schools open to midyear reductions. Add to that an even worse 2009-10 fiscal year and it becomes obvious that cash flow is critical.
I hate to be the bearer of bad news, but schools really need to hunker down over the next 24 months, limit your long-term commitments, and protect your cash.
More on that later.