Budget Issues

While there has not been much to report, as Sacramento has not done much with the budget in the last several weeks, we STILL face considerable budgetary challenges – based on the inability of the State to live up to their legal commitments. To gain perspective, understand that when the State passed its last budget “correction” at the end of July, it was already another $8+ Billion short at the time and now the estimates are approaching $15 Billion (which is about half the size of the July “correction”). Additionally, the state has imposed new “rules” on class size reduction (CSR) that disallows funding for a portion of our CSR program. Mid-year cuts are almost a guarantee at this point. The other state strategy to resolve all of this is “deferrals” (i.e., “we know we owe you the money – but we can’t pay you now we will pay you later”). This strategy makes us use all of our cash and borrowing power to survive until the state pays us as they are legally bound to do.

That is more or less all the bad news. The good news is that we have a plan and will make it through the year (09-10) without impacting our students or staff. However, all of these issues have a dramatic impact on the size of the reductions we will have to resolve in the spring of the year (for 2010-11). Any and all savings that we can acquire along the way will certainly assist us with the budget reduction process in the spring. We are blessed with great employees that are committed to doing the “right” things with and for our students – and they will make this work.