[Busmgrs] State School Fund and Ed Jobs Update

[WILTFONG Michael]

DA:     September 23, 2010

To:     Oregon School District Business Managers

FR:     Michael Wiltfong - Office of School Finance

RE:     State School Fund and Ed Jobs Update


Good afternoon everyone,

As you probably are aware, as of September, State General Fund resources are expected to be $1.269 billion below the close-of-session forecast. In response to this latest forecast, the Governor announced his intention to use his statutory authority to make across-the-board cuts to balance the statewide budget. This results in a reduction of $401.9 million (or an additional $158.6 million to the June allotment reduction) to the State School Fund. The June allotment reduction has already been accounted for in the July SSF estimates for 2010-11. We now need to account for the September allotment reduction.

Yesterday the Emergency Board approved an increase in the Federal Funds expenditure limitation for the State School Fund by $117,949,095 to recognize additional resources from the federal Education Jobs Fund Program. On August 10, 2010, President Obama signed a bill extending $10 billion to states for the Education Jobs (Ed Jobs) Fund Program. This program and funding are in addition to the federal State Fiscal Stabilization Fund (SFSF) program, with which many of you are familiar. Initial Ed Jobs guidance from the U.S. Department of Education is available on the State School Fund website under the Ed Jobs section at the following URL:  http://www.ode.state.or.us/search/page/?id=1363

Earlier this month, the Governor submitted Oregon's Ed Jobs application and opted to use the State's primary elementary and secondary education funding formula as identified in Oregon's application for funding under the SFSF program. Similar to the SFSF program, we will be using the State School Fund formula to calculate the Ed Jobs district allocations. I do this by calculating each school district's and ESD's State School Fund Grant as two scenarios - one with the Ed Jobs funds and one without. The difference between the amounts becomes each district's Ed Jobs allocation. Once the allocation is established, we won't be reconciling, which brings me to my next challenge.

In addition, in conjunction with an agreement with the Senate President and Speaker of the House to retain total funding for the 2009-11 State School Fund in the amount of $5.756 billion, the Emergency Board allocated $7 million from the general purpose Emergency Fund and noted that legislative action will be necessary during the 2011 legislative session to access reserves or other available resources for approximately $35.5 million for the State School Fund.

Of course there are still four revenue forecasts yet to be revealed for the 2009-11 biennium, so there are still a lot of unknown variables. However, in an attempt to provide the most accurate estimates possible based on what is known presently, and based on the agreement from the Senate President and Speaker of the House to retain total funding for the 2009-11 State School Fund, I will be including the approximate $35.5 million in my next round of estimates. The State School Fund amount of $5.756 billion will be the basis for calculating the 2010-11 Ed Jobs and 2010-11 SFSF allocations and rebalancing the State School Fund.

If you should have any questions on this matter, please feel free to contact me.

Thank you,

Michael Wiltfong
State School Fund Coordinator
School Finance Unit, Director
Oregon Department of Education
michael.wiltfong at state.or.us



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