Budget News

Budget News
CRPUSD Budget News

On December 15, 2020, the Board of Trustees approved the FY 2020-21 First Interim state budget report. California Education Code 42130 requires the district to prepare and submit two interim financial reports to the Board each fiscal year. After reviewing the report, the Board is to certify the district’s ability to meet its financial obligations for the remainder of the current fiscal year as well as the following two fiscal years. The Board did certify a positive certification, meaning that the district is projected to meet its obligations.

Highlights of the report included an overview of the general fund revenues and expenditures. The Local Control Funding Formula (LCFF) accounts for 75% of the district’s revenues. Under the LCFF school districts are funded based on their Average Daily Attendance (ADA) multiplied by a base amount per grade span. Additional money is given based on the district’s percentage of students with higher needs. The base amount increases annually based on the funded state COLA.

This increase generally allows the district to keep pace with on-going cost increases. Due mainly to the pandemic’s impact on the state economy the state’s final budget for 2020-21 indicated that the funded COLA would be 0% for 2020-21, 2021-22 and 2022-23. This means that any increase in on-going LCFF revenues would solely be based on an increase in enrollment and the percentage of students of higher need. More importantly the amount of increased funding would not be sufficient to cover projected costs increases. This will lead to significant levels of deficit spending over the next few years.

The charts below help illustrate the impact of state funding on the CRPUSD’s budget.

The chart below shows that general fund revenues are projected to be relatively flat over the three years:

1st interim 3 year projection graph

The Chart below shows that general fund expenditures are projected to increase over the three years:

General Fund Expenditures
Certificated Salaries: Credentialed Staff (Teachers and Administrators)
Classified Salaries: Non-Credentialed Staff
Benefits: All salary driven benefits, including STRS, PERS, SUI, Workers Comp, OASDI, Medicare plus Health Benefit costs for both active employees and retirees

The chart below shows the projected LCFF funding increase in 2021-22 and 2022-23 and the projected cost increases for Step & Column, STRS and PERS and Health Benefits premiums. The projected increase in LCFF funding will be insufficient to cover the projected costs and this leads to significant deficit spending:

Projected income to expenses graph

Below is the district’s Multi-Year Projections that show the effects of flat funding and increase in costs. For 2020-21 the budget has a small surplus due to capturing one-time savings. While the district meets the minimum reserve level of 3% as required by law, the budget is unsustainable due to the significant level of deficit spending in 2021-22 and 2022-23:

Multi-Year Projections chart

Next Steps:

The Superintendent’s Budget Advisory Committee will continue their work on long term budget solutions to address the budget deficits.

The Governor’s January Budget Proposal will be released on January 10, 2021. In light of COVID’s impact on economy, what will be in the January Proposal? Current news is that 2020-21 budget is not as bad a projected, however the state continues to project a deficit in the future.

The 2nd Interim will be presented to the board on March 16, 2021.

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