Commissioner's Newsletter
| DATE: June 20, 2003
TO: School Administrators FROM: D. Kent King Re: More Withholdings Possible in FY04 After meeting in special session for about two weeks, the House and Senate passed a revised budget this week (June 17) for the Department of Elementary and Secondary Education. This revised proposal includes the following increases for the foundation program, compared to the budget approved in May during the regular legislative session:
The budget approved this week also included a reduction of $1.4 million in funds for our state-operated schools (School for the Blind, School for the Deaf, and the State Schools for Severely Handicapped) and an additional cut in DESE’s internal operating funds. As you know by now, Governor Holden decided this week to veto, for a second time, the proposed budgets for the Department of Elementary and Secondary Education and the Department of Higher Education. He approved the budgets for the departments of Health and Senior Services, Social Services and Mental Health, which also had been revised by the legislature during the special session. Along with vetoing the budget for K-12 education, the governor announced that the budgets submitted by the General Assembly remain about $240 million out-of-balance. As a result, he will be forced to impose withholdings in the new fiscal year that begins July 1. The governor announced on Wednesday (June 18) that he would withhold $190 million from elementary and secondary education, $20 million from higher education, and $30 million from all other agencies if the legislature does not balance the budget. (These withholdings would be applied to the revised budget figures adopted by the legislature on June 17, as outlined in the first paragraph above.) We have prepared new computer simulations to show the estimated impact on state financial aid for next year, based on the potential withholding of $190 million in basic aid for public schools. Because of the volume of data, we have prepared four separate simulations (dated June 18 or 19) to show the approximate impact on each school district of the following reductions in statewide funding, based on the total possible withholding of $190 million:
The following data are included in each of these reports:
Again, we remind you that these reports do not attempt to project actual payments for your district. We do NOT have all the data that will be used in the calculations for FY04. Consequently, the proration factors used in the latest formula simulation are higher than they will be when we use the new data. More realistic proration factors are .88 on Lines 1A and 14A, and .83 on Lines 1B and 14B. The latest projections for transportation, remedial reading and gifted aid also are based on year-old data. The transportation reimbursement is estimated to be approximately 70% of Line 52 of the transportation formula. The gifted reimbursement is estimated to be approximately 55% of the allowable costs. The remedial reading reimbursement is estimated to be approximately $7200 per full-time remedial reading teacher. We are in uncharted waters. The fiscal year ends in a little more than a week, but we are hopeful that the budget impasse will be resolved by June 30. We do not know what will happen if a budget is not adopted by July 1. I know you are struggling to develop your own budget for next year and to answer questions from your staff and community. We will do our best to keep you informed about new developments in the ongoing budget debate. |
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