State Budget Crisis Information

State Budget Crisis Impacts California Schools

March 13, 2012

Dear Community:

I want to express my heartfelt appreciation to all of our outstanding staff members as well as each of you for all that you do for our students. Whether staff is driving a bus, repairing a sprinkler, fixing a computer, or teaching students to read, they make a difference. The community's heartfelt support is also appreciated and evident across all of our schools. Thank you for your unwavering efforts.

As you know, the State’s deep and prolonged budget crisis has taken its toll on California schools. When Governor Brown released his 2012-13 budget proposal, it became apparent that the District would continue to operate in a fiscal environment of uncertainty.

The most concerning component of the Governor’s proposal is that education funding relies heavily on a November ballot initiative. With that in mind, I thought I would take a moment to provide you the following District budget forecast based on the most recent information provided by the Governor’s office:

PASSAGE OF TAX INITIATIVE – 2012-13 PYLUSD BUDGET

The base revenue limit funding from the State would remain at the current level.
State funding for home-to-school and special education transportation was recently eliminated and will result in a loss of $1.5 million to the District.
One-time monies such as the Federal Jobs Bill and the American Recovery and Reinvestment Act lessening the impact of State budget shortfalls are no longer available.
Health and Welfare costs have increased $5.6 million since 2007, and we anticipate it increasing another $1.5 million next year.

As a consequence, the District will need to make $11.6 million in budget reductions in order to maintain the required 3% reserve. This figure does not reflect the inclusion of any furlough days, pending negotiations with our employee groups. Should we reach agreement on furlough days for the 2012-13 school year, the anticipated budget reduction would be reduced significantly.

DEFEAT OF TAX INITIATIVE – 2012-13 PYLUSD BUDGET

If the Governor’s tax initiative is rejected by voters, it is anticipated that school districts will be faced with a midyear cut of $370 per student. This would result in an additional $9.2 million loss in funding to the PYLUSD.

At the March 13, 2012, Board meeting the Board of Education approved for the first time a Qualified Second Interim Budget Report. A Qualified Interim Report means that based on current projections, the District may not be able to meet its financial obligations for the current fiscal year and the next two years. For our district, the potential loss of $9.2 million, should the tax initiative fail, would be devastating. Therefore, the District must develop a contingency plan which would likely include further negotiations relative to wages and benefits.

While this budget news is daunting, with the support from our employees and our community, the District and, most importantly, our students will continue to succeed.

Sincerely,

Dennis Smith, Ed.D.
Superintendent