Proposed Budget2010-2011June 14, 2010.ppt

Proposed Budget 2010-2011 June 14, 2010 National Economy The U.S. economy is no longer in decline, but is growing slowly The recession began in December 2007, 29 months ago U.S. Gross Domestic Product (GDP) grew 3.2% in the first quarter of 2010 162,000 jobs were added in March (unrevised survey) But the unemployment rate has remained high The April 2010 rate was 9.9%, up from 8.9% one year ago U.S. Economic Outlook California Economy The state’s economy is recovering along with the nation’s State personal income grew at 4.1% and taxable sales grew at 1.9% in the 4th quarter of 2009, according to the University of California Los Angeles (UCLA) Forecast However, job growth remains a major drag on the economy California added only 2,800 jobs in February and 4,200 jobs in March If California had shared in the 162,000 U.S. jobs added in March, our proportionate gain would have been more than 16,000 jobs The state’s unemployment rate, at 12.6%, is the third highest in the nation California Employment California’s Unemployment Rate California’s Unemployment Rate vs. Other Hard-hit States Overview of the State Budget Education fares better than the rest of the Budget The rest of the Budget is absorbing even heavier cuts in order to protect education from deeper cuts But there is no “free ride” – the nearly $2.5 billion taken from education in January remains unrestored Child care takes a huge cut Social and health programs that serve K-12 students and their families are hit even harder California Work Opportunities and Responsibility to Kids (CalWORKs), which is California’s main avenue to welfare payments, is on the chopping block The Budget reflects two major unresolved problems: California’s finance system serves the state poorly in both good and bad times The current economic woes remain unresolved May Revision Features For the most part, the May Revision contains no further cuts to K-12 education Cuts proposed in January remain Targeted proposed administrative cut is