Wednesday, March 4, 2009

Budget Review

I attended the LASD Board meeting on Monday to get a better understanding of how the CA State budget is going to impact the district.

The good news: projections for the district deficit have ranged from $0 to $3.6m. Assuming the State budget holds, our deficit is actually ~$500K for the 2009-2010 school year. That's a lot better than we thought.

The less-than-good news: If all we do is fix the $500K hole, we're in a worse position next year.

I'm pleased that the district office has decided to take a structural approach to fixing the budget. While it would be tempting to look at the current financial crisis and hope that it will pass, few economists are actually predicting a rapid economic recovery. It only makes sense to fix this problem at a structural level and to start living within our means.

Randy Kenyon led an excellent presentation to explain all of the puts and takes on the budget.
(link to presentation)

The deck splits into three sections:
Section I explains the budget in broad terms, including some one-time sweeps we can make to recoup some money from this year into next year's budget. The key concept here is that we have a long term deficit issue, so we want to figure out how to take ~$2m out of the ongoing expenditures. That would give us break-even cash flow for approximately 5-6 years into the future.

Section II lists "efficiency gains" that the district is making. These are decisions that we should be making just because they are good management decisions. It's the sort of thing a Finance department does all the time, with or without a crisis. It can be summed up as "how to do the same thing for less money."

Section III is the hard part. These are program reductions. Every one of these is painful, and people feel passionate about each one of the cuts. The reality is that we have a serious crisis, so we have to make these tough decisions. I'll do another post on my take on these cuts later. Section III is presented in priority sequence. That is to say, as we find additional funding, we'd bring back those programs in the order in which they appear in the deck. (i.e. Class Size reduction is the first thing to return.)

Prior to the Board meeting, I proposed to the District Office and the Board of Trustees that they make a concerted effort to explain the current program and the impact of each proposed change. I'm pleased that they have tried to do that in most of this presentation.

While none of the cuts are trivial, they are trying to figure out how to deliver as much of the program as possible while still setting ourselves up for a budget that we can live with for more than just this year. Some of these cuts affect my kids, and I'm sure that most of you are affected by one or more of the proposed changes. It's tempting to plead for the specific changes that impact my kids, but unless I can propose where else the money should come from, I'm trying to restrict myself to learning how best to help my kids, and keep my pleas for clemency for my pet programs to a minimum.

More to come...

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.