THE State Budget Crisis
Mar 27, 2015
THE State Budget Crisis
Today’s Presentation
Arizona’s budgetThe impact of the economic declineWhere the money comes fromWhere the money is spentWhat MPS needs to do to get
through the current budget crisis
Arizona’s Revenue Sources
AZ Sales
Tax
AZ Income
Tax
Other
JLBC Actual Fund Revenue, FY2007
Where Does Arizona Spend Its Money?
K-12, 42%
Universities,
11%
AHCCCS, 14%
DHS, 6%
Corrections,
10%
DES, 8%
Other, 9%
Arizona’s Constitution Requires A Balanced Budget
0
2
4
6
8
10
12
Planned
2008-09
Actual
2008-09
Estimated
2009-10
Revenue Total (Billions) Spending
Arizona’s Revenue Is Declining
0
2
4
6
8
10
12
Planned
2008-09
Actual
2008-09
Estimated
2009-10
Revenue Total (Billions) Spending
The Budget Crisis Is Hurting All Sectors and States
Budget Cuts or Revenue Increases?
“[House Appropriations Chair John ] Kavanagh said that he and most Republicans are unwilling to consider tax hikes, even temporarily, instead of further spending cuts.
“I’m not going down the tax road until the situation is so dire that there’s no other alternative,’’ he said. “And I’m not prepared to concede that at this point.’’ ”
--East Valley Tribune, February 1, 2009
K-12 Arizona Education Funding Has & Will Experience Cuts
In 2008/09 K-12 education was cut $133 million.
The estimated cuts to K-12 education in 2009/10 is estimated to be between $470 million and $1.4 billion
Potential State Education Budget Cuts
The following budget cuts have been proposed by state legislators:
Phase out of Career Ladder Elimination of Young Learner and Full-Day
Kindergarten Eliminate annual increase of 2% in funding Base Funding was decreased 2.6% this year
and will be decreased even more in the next budget
Funding to offset utility bills may not be provided
Soft Capital will be eliminated or significantly cut
State Funding is Only One of Several Challenges Impacting MPS
MPS cut $19,800,000 in 2008/09
Other Challenges: Enrollment Has Declined
65000
67000
69000
71000
2001 2002 2003 2004 2005 2006 2007 2008 2009
-685-537
-1406
-2135
+162
+580
-67 +107
Other Challenges: Passing The Override
8.8% of salary is contingent on the overrideFunding for 136 teachers is from the overrideSecurity positions are funded by the overrideTechnology trainers are funded by the
override
This decline can be dealt with by cutting ‘fat’ and not cutting people’s jobs or salary
Mesa puts more money in the classroom than most districts
Mesa has fewer administrators than average
•Arizona Auditor General
Budget Misperceptions
Most of Our Money Goes To People
Salaries
76%
Benefits
15%
Utilities
5%
All Other
4%
Most of Our M&O Money Goes To Teachers
Certificated,
73%
Admin, 5%
Support,
22%
Our Staff Has Helped Mesa Schools Be Very Successful
96% of elementary parents give MPS an A+, A or B grade. America’s Promise Alliance named the district as No. 1 in
graduation rates among the nation’s 50 largest cities in 2008. U.S. and News Report magazine recognized all six MPS
comprehensive high schools in its “Best High School 2008 Search.”
The Class of 2008 was offered over $45 million in scholarships. The Class of 2009 includes 25 National Merit Semifinalists and
five Presidential Scholar finalists. MPS students earned state championships in academics,
athletics, creative and performing arts, and career and technical education in 2007-08.
MPS captured 27% of the seats in the all state orchestra and band while having only 7% of the students in the state.
Existing bond funds may be used for other budget categories
Budget Misperceptions
Budget Misperceptions
Funding may not increase, but it won’t go down
So Where Will Cuts Be Made?
If 91% of our operating budget goes to people, we will have to have fewer people and/or pay people less.
We will also have to eliminate some programs and activities and increase efficiency.
How Will This Impact MPS?
Local, 36%
Federal, 5%
Other, 8%
State, 50%
Local, 36%
Federal, 5%
Other, 8%
State, 50%
What Is MPS’s Plan?
Educate our legislatorsInform our staff and community Reorganize district based
operationsAdjust staffing to match the decline
in enrollmentEnsure district expenditures match
projected (declining) revenue
MPS’s Plan For 2008/09
Cut $20 million from budget in July 2008 Froze job openings except for classroom
teachers Reduced all supply budgets Cancelled $3 million in purchases of
textbooks, software and similar items Reduce substitute teacher costs
MPS’s Plan For the 2009/10 Budget
Potentially cut $30-$??? millionReduce positions in district
departmentsExamine programs and offerings and
reorganize to maximize efficiency Identify non-state funding sourcesAdjust teaching and support staff to
reflect lower enrollment.
Timeline
February: Share budget status with staff; give initial teacher allocations to schools
March: Develop budget plan for possible state funding levels
March/April: State sets 2009/10 budgetSoon after: MPS announces changes
based on the budget provided
So Now We Know
Arizona’s budget picture is grimProposed education cuts in the state
budget will be significantMPS budget cuts will mean fewer programs,
paying fewer people and possibly paying people less if the state cuts certain funds
We need to understand the situation, we need to come together to weather the storm and we need to work to strengthen district finances where we can
Mesa Succeeds
The Long Depression of 1872-1897
The Panic of 1893
The Stock Market Crash of 1929
The Great Depression 1929-1938
OPEC Oil Crisis &
Runaway Inflation of the 1970’s
The Savings & Loan Crisis and Recession of the 1980’s
Mesa Succeeds
“It is our attitude at the beginning
of a difficult undertaking which,
more than anything else,
will determine its successful outcome.”
-- William James
Have A Suggestion?
Do you have an idea that could be implemented that would save money?
Go towww2.mpsaz.org\abetterway
and submit ideas or send district mail to “A Better Way Suggestion”
as soon as possible
THANK YOU