SUMMARY

Issue for Discussion

An overview of the Department’s operating budget.

Reason(s) for Consideration

The Department’s 2009-2010 projected operating expenditures of $399 million are supported by dedicated Federal and Special Revenue (88 percent) funds and the State General Fund (12 percent).  The 2010-2011 Executive Budget proposes State General Fund operating support of $42.6 million which is a $7.9 million reduction from the 2009-2010 Enacted Budget level of $50.5 million.  This results in a proposed 7 percent General Fund support level for Department operations for 2010-2011.

While the General Fund is our most flexible funding source, it has some limitations.  For example, of the proposed $42.6 million, $5.4 million is for Tenured Teacher Hearings and pension bills that the Department does not have any control over.  In addition, some of the remaining $37.2 million must be used for specific program purposes such as accountability and fingerprinting.

Programs and functions that are currently supported by the State General Fund that will be negatively impacted by the proposed State General Fund reduction are:

• Assessments
• General Education Development (GED)
• Accountability
• School Facilities Planning
• Summer School for the Arts
• Fingerprinting
• Executive Direction
• Governmental Relations
• Financial and Grant processing
• State Aid processing
• Audit Services
• Information and Technology Services

The State General Fund reduction exacerbates existing shortfalls in some programs, such as assessments and GED, and will require difficult programmatic actions in order to achieve financial stability.  Budget impact will be discussed in each subcommittee meeting.

The 2010-2011 Executive Budget also reduces the Department’s State General Fund targeted fill level by 53 positions from 376 to 323 positions.  These are our most flexible positions with some limitations. The Department currently has 364 State General Fund positions or 41 more than the target of 323 positions.

Of the $399 million of 2009-2010 operating funding, $180 million is federal funding.  Although this funding must be used for the purpose of the grant, there is some limited flexibility.  For example, the federal government allows the administrative funding for some NCLB programs to be pooled.

Proposed Handling

Discussion and Guidance.

Procedural History

This information is provided to apprise the Board of the impact of the Executive Budget on the Department’s operations.

Background Information

The 2010-2011 Executive Budget:

• Reduces State General Fund support by $7.9 million or 16 percent from the 2009-2010 Enacted Budget level of $50.5 million and $18.4 million or 30 percent from the 2008-2009 Enacted Budget level of $61.0 million.

• Reduces the Department’s all funds targeted fill level to 2,915 positions which is a 9 percent or 284 position reduction from the 2009-2010 Enacted Budget all funds targeted fill level of 3,199 positions and an 11 percent or 372 position reduction from the 2008-2009 Enacted Budget all funds targeted fill level of 3,287 positions.

• Requires the Department to reduce its current all funds fill level of 2,967 positions by 52 to meet the targeted fill level of 2,915 positions.

Recommendation

N/A

Timetable for Implementation

N/A