Not surprisingly, school budgets are tightening, and tightening fast. Commissioner Gendron late Tuesday issued Informational Letter No. 29, General Purpose Aid in the FY 2010-11 State Budget.
In light of the current national economic crisis and its effect and potential effect on state revenues, you are undoubtedly concerned about how state funding for education will be impacted. The current projection is that the next two-year budget “structural gap” will be $508 million. That is, the projected costs for existing programs are $508 million greater than projected revenues. Given the current state of the national economy, there is little doubt that revenue projections due in November and the ones to follow are likely to decline and the projected gap will grow.
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In response to the budget exercise, the Department is submitting a proopsed budget that freezes GPA at FY 2009 levels. This represents in the neighborhood of $170 million less than what would have been required to bring GPA to the 55 percent target, but does not move the actual dollar amount backward. Clearly, even this proposed freeze in GPA would cause considerable hardship.
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One strategy that we are considering for the distribution of GPA among school administrative units under this proposal is to freeze the allocation and subsidy for each school administrative unit at its FY2009 level.
This amount would be adjusted only for FY 2010 major capital debt and bus allocations.
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It is also important to note that the penalties for non-compliance with the reorganization law will also be applied to the frozen subsidy amount for each unit. Any penalty adjustments to non-compliant units will be redistributed to compliant units – again, within the frozen GPA environment.