May 22, 2020

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Dear NUSD Community,

Last Thursday, as the education world continues to transition due to the COVID-19 pandemic and distance learning across the state, districts were hit with the impact of the proposed California budget for 2020-2021. Governor Newsom issued his updated proposal for the 2020-2021 California State Budget, which reflects the historic impacts of the COVID-19 pandemic on California’s state budget. Major revenue (personal income tax, sales tax, and corporate tax) projections are down an average of 25%, the unemployment rate is projected to increase to 25%, and the Governor projects a $54 billion deficit.  The Proposition 98 guarantee, which determines the level of funding to education in California school districts, has decreased by $19 billion.

While the District is still analyzing all of the financial impacts of the budget, it is clear that the cuts are massive.  This is occurring at a time when schools are working to accommodate the demands of distance learning and a future where social distancing and safety measures will be required to be applied on campus for schools to reopen safely and effectively.

The initial analysis of the budget impacts to NUSD are enormous. NUSD’s projected deficit is now projected to balloon to over $8 million in 2020-2021 and is projected to increase to over $10 million in 2022-2023. Without significant reductions of expenses and/or additional federal assistance, the District may spend down its entire reserve over the next year and would run out of money entirely next summer.

Given this extreme change in NUSD’s financial situation, on Tuesday night the Board of Trustees took immediate action to initiate the first steps in balancing the District’s budget.  The Board approved several budget saving measures, including a hiring freeze for most positions, restrictions on overtime, travel, conferences, and contracts, as well as expanded expenditure controls for all departments and sites. The presentation and actions taken by the Board can be found at (NUSD Budget Presentation).

While these initial steps will be critical to ensure that NUSD is in the best financial position possible going into the 2020-2021 year, the difficult work and tough decisions are still to come. The Board of Trustees have directed staff to propose recommendations for significant budget reductions for the 2020-2021 year and develop a process for additional reductions for the 2021-2022 year.

NUSD has scheduled a Virtual Town Hall on the District’s Budget on Facebook Live https://www.facebook.com/NovatoUnified/ for next Thursday at 3:00 PM to 3:30 to give the staff and community an update on the financial situation of the District and answer questions from the community.

Please submit your questions or recommendation of budget reduction to the following survey https://bit.ly/May28Budget

Additional information and resources can be found on the District’s Business webpage at https://nusd.org/business-services/.

Sincerely,

Yancy Hawkins