2004/05 May Revise Budget Analysis for AUSD

May 15, 2004

Prop 98 Rebasing Impact

While the participants in the January 2004 education deal will not publicly admit it, the term "rebasing" is actually a suspension of the Prop 98 guaranteed funding. The $2 billion "rebasing" of Proposition 98 means that Alameda will not receive approximately $2,000,000 a year in new ongoing funding for the forseeable future.

Cost of Living Adjustment

The proposed full funding for growth and cost-of-living adjustment (COLA), of 2.41% is encouraging. However, there was a 1.2% reduction in the District Base Revenue Limit(BRL) in 2002/03 and no increase 2003/04. So for the three year period, the net revenue increase will be approximately 1.2%. Increasing costs of energy, insurance and litigation rose faster than 1% over the past three years.

In reaction to the 1.2% BRL reduction in 2002/03, the Board of Education implemented $1,700,000 of reductions in April, 2003. Despite those reductions, AUSD is projected to have $1,000,000 deficit for 2003/04. While the proposed COLA increase is a positive sign, the status of the 2004/05 budget remains unclear due to outstanding contract negotiations with the employee unions.

For additional background information, see K-12 May Revise Document

For background information on the entire budget and the May Revise, see LAO Perspective on the May Revise

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Last modified: May 17, 2004

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