49 DAYS WITHOUT A BUDGET: School Finance 101 for and by the arithmetically challenged

by smf/4LAKids

August 19, 2007 - We are now 49 days without a state budget. We have been reading about preschool programs that are in danger of going out of business without their state subsidy – but what is the impact on LAUSD of there being no state budget?

THE GOOD NEWS is that two-thirds of LAUSD's budget is independent of the state budget process and IS being paid.

THE BAD NEWS is that about one third of LAUSD's expenses - paying for maintenance and operation, employees at central and local district offices, and the expenses of summer school and year-round programs is NOT being paid. And on Sept 5 all LAUSD students and employees will be "back to school"!

One third of LAUSD's annual budget is: $1.9 billion with a "B",

To give you an idea of the impact of this, figure $1.9 billion is $158 million a month. That money will eventually be paid – there is little doubt about that …but if you don’t have that $158 million to invest for one month, at 3%, you lose over $400,000 (or $13,333 a day) And that interest will NEVER be reimbursed – it comes out of the general fund - ie: classroom operations!

$13,333. is approximately the annual revenue (ADA) paid to the district generated by two school children …lost every day.

$400,000 equals something like the annual salary and benefits package for six teachers …lost every month.

LAUSD has ALREADY irretrievably lost the ADA for about one hundred kids, or the salaries of nine or ten teachers, or the cost of about 9,000 textbooks.