State Budget Surplus Unlikely to Bring Extra Funding to PUSD
At the May 26 board meeting, Ruth Alahydoian, Chief Financial Officer for PUSD presented the Board with a budget update, outlining the proposed impact of the Governor’s May 15 Budget Proposal on PUSD. Despite reports of a large state budget surplus that might lead you to believe the district will receive an influx of new funds, unfortunately, that is not the case for PUSD.
Background: School districts base their initial budget development on the Cost-of-Living Adjustment (COLA) in the January proposal. Each year in May the Governor revises the budget based on updated revenues received in the current year and projections for the budget year. The Legislature then considers the Governor’s “May Revise”, negotiates and votes in a final budget sometime around June 15. The Legislature can revise the budget up until August 15.
Cost of Living (COLA) expected to increase from 3.4% to 5.07%
The Governor increase COLA from 3.4% in the January budget to 5.07% in the May REvise. For PUSD, the proposed COLA increase will amount to about $266,000.
Why PUSD doesn’t expect to receive more: The Governor is expected to significantly increase K-12 funding, but most of the funds are proposed to go to LCFF districts with a high percentage of English Language learners, students in poverty, and homeless students, as noted in the chart below. If the Legislature passes the revised budget proposed by the Governor on May 15, PUSD will receive a total of about $320,000 in increased revenue compared to what it expected after the release of the budget in January, but also faces total expenditure increases of about $485,000 due to required increases in contributions to the state’s unemployment insurance, and retirement funds to STRS and PERS.
Ms. Alahydoian will keep the Board apprised of any changes in anticipated funds that occur between now and the Board’s adoption of the 2021-22 budget at the June 23 board meeting.