Rainy Day Calculus

The following excerpt comes from a recent UESF email by Dennis Kelly. It gives a reasonably clear explanation of where we stand with the rain day funds:

Report Back from UESF Delegation to SF Controller
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Yesterday [ed: April 28th] the San Francisco City Controller and his staff provided a briefing on the Rainy Day Fund to a delegation from UESF and representatives from several City Supervisors' offices.

The law states that the triggers for the Rainy Day Fund to be released to the school district are a reduction of inflation-reduced per-pupil revenues and the noticing of significant numbers of layoffs. The Controller certified that the appropriate conditions were met to release the funds.

The law also states that the district is entitled to 25% of the total amount in the fund, or the decline in inflation adjusted per pupil revenue, whichever is less. Currently the fund holds $117.6 million, 25% of which is $29.4 million.

However, according to the Controller's office, under his calculations the decline in the inflation adjusted per pupil revenue is projected to be somewhere between $18.0 million and 19.7 million.

Although SFUSD is expecting an approximately $40 million budget shortfall to the entire budget, much of those cuts will be made to categorical funds.

According to the Controller, the total shortfall in the discretionary budget (which he is interpreting as the decline in inflation adjusted per pupil revenue) is the number somewhere between $18.0 million and $19.7 million. The amount is a range because it depends on the calculation of the education Cost of Living Adjustment (COLA) by the state of California. The COLA is not set yet for next year, but is expected to be between 4.9% and 5.4%.

Therefore he is authorizing the release of the lesser amount, unless conditions in the state budget change substantially. Governor Schwarzenegger announced yesterday that the state budget crisis is around $20 billion for next fiscal year, much higher than the original projections of $14-16 billion. The number may therefore be revised upwards as we move forward.

The Rainy Day Fund will be released when the San Francisco City budget is passed, which is typically in the end of July. However, we have been informed by SFUSD that they intend to rescind a certain number of layoffs based on the promise of the funds from the Controller's office. They have stated that on or around May 8th, a further list of rescinded layoffs will be sent out.

By law the SFUSD must send out final layoff notices by May 15th.

The same material was covered in the Chron in this article: Rainy day fund comes to rescue of S.F. teachers, but the UESF report goes into clearer detail on how the $19M figure was derived.

Again, we've been pretty lax about reporting on the budget issue, so we're catching up. More to come.