2015 - 2019 Long Range Financial Plan
2015 - 2019 Long Range Financial Plan Tonight’s Goals Discuss the economic context over planning horizon. Review the 2015-2019 Long Range Financial Plan with a focus on FY 2014-15. Explain the assumptions that underlie the forecast. Understand the fiscal challenges and future uncertainties. Respond to questions and concerns. Discuss next steps.
All Signs Point To Expansion Total Nonfarm Employment (SA, millions) Avg Hours Worked - Manufacturing 44 1.75 42 1.70 40 1.65 38 1.60 36 1.55 34 1.50 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Real Wages and Salaries (SAAR) Unemployment Rate (SA) $82,000 14 12 $80,000 10 $78,000 8 $76,000 6 $74,000 4 $72,000 2 $70,000 0 3 2005Q1 2007Q1 2009Q1 2011Q1 2013Q1 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13
Oregon Growth Improving Due to Improvement in More Regions Private Sector Picking Up Year-over-Year Growth Rates Oregon Employment Gains -1% 0% 1% 2% 3% 4% 5% 6% QCEW, Year-over-Year Sum of Counties All Counties Portland MSA Ex Portland MSA North Coast 40,000 South Coast 30,000 PDX Mar '13 Valley 20,000 Jun '13 S Oregon 10,000 Gorge C Oregon 0 Jan-11 Jan-12 Jan-13 SC/SE Oregon NE Oregon 4
Hardest Hit Areas Begin to Recover Bend Employment Growth Private Sector Employment Year-over-Year, 3 MMA, QCEW Seasonally Adjusted, 3 Month Moving Average Housing Government Other Private 0% 30% 20% Oregon -5% 10% 0% Medford -10% -10% -20% -15% -30% Bend -40% -20% Jan-07 Jan-09 Jan-11 Jan-13 May-07 May-09 May-11 May-13 5
10-Year Forecast Table R.2 General Fund Revenue Forecast Summary (Millions of Dollars, Current Law) Forecast Forecast Forecast Forecast Forecast Forecast 2011-13 % 2013-15 % 2015-17 % 2017-19 % 2019-21 % 2021-23 % Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Personal Income Taxes 12,118.2 15.8% 13,716.1 13.2% 15,389.6 12.2% 16,929.0 10.0% 18,666.0 10.3% 20,512.6 9.9% Corporate Income Taxes 883.9 6.8% 1,030.5 16.6% 1,069.0 3.7% 1,043.3 -2.4% 1,073.1 2.9% 1,167.2 8.8% All Others 1,164.9 -5.0% 1,016.3 -12.8% 1,001.1 -1.5% 1,063.1 6.2% 1,142.7 7.5% 1,220.5 6.8% Gross General Fund 14,167.0 13.1% 15,762.8 11.3% 17,459.7 10.8% 19,035.4 9.0% 20,881.9 9.7% 22,900.3 9.7% Offsets and Transfers (12.0) (67.5) (85.6) (94.5) (57.0) (61.0) Net Revenue 14,155.0 13.0% 15,695.3 10.9% 17,374.1 10.7% 18,940.9 9.0% 20,824.9 9.9% 22,839.3 9.7% Other taxes include General Fund portions of the Eastern Oregon Severance Tax, Western Oregon Severance Tax and Amusement Device Tax. Commercial Fish Licenses & Fees and Pari-mutual Receipts are included in Other Revenues 6
Biennial Revenue Growth 24% PIT TOTAL 20% 16% 12% 8% 4% 0% -4% -8% -12% 7 7
2015 - 2019 Long Range Financial Plan Statewide Education Budget Context K-12 Education funding improvements after Great Recession disinvestment. 2013 reforms to PERS provided short-term expenditure relief. Contract concessions with employee groups still an issue along with “working conditions”. State is silent on all day KG funding increases in 2015-16.
2015 - 2019 Long Range Financial Plan K- 12 Education’s Share of the State Budget 46.0% 44.8% 44.0% 42.7% 41.5% 42.0% 39.5% 40.0% 38.8% 38.0% 38.0% 36.0% 34.0% 2003-05 2005-07 2007-09 2009-11 2011-13 2013-15
2015 - 2019 Long Range Financial Plan Long Range Plan Objectives Build on 2013-14 investments in Strategic Plan priorities and objectives. Launch all day kindergarten in 2015-16. Prioritize and resource instructional technology initiatives. Maintain successful programs, including CLCs, and equitable class sizes. Appropriately resource continued implementation of Proficient Learning Model & Common Core State Standards. Provide competitive compensation to attract, recruit & retain highly effective staff.
RSD Strategic Priorities Elevate Student Every student graduates college-prepared Achievement and/or career ready. Support and A highly effective and professional team that Develop Our prioritizes student growth, values collaboration and seeks continuous growth and improvement. Human Resources Sustain Safe and Personalized supports that nurture stakeholder Vibrant School engagement, student success, and safe and effective school environments. Communities Balance Resources Wise, transparent stewardship of district resources to Maximize that are prioritized for student achievement. Student Achievement
2015 - 2019 Long Range Financial Plan 2014-15 Revenue Assumptions Legislature’s Education Budget o $6.55 Billion + $100 Million K-12 Allocation o 51% in the second year o Poverty data change & weights increased Growth in local revenues of 4.3% Flat enrollment o Non-charter grows 0.2% o RPA declines 2.5%
2015 - 2019 Long Range Financial Plan State Formula Revenue per ADMw $7,037 $8,000 $6,840 $6,246 $6,129 $6,161 $5,968 $6,051 $5,922 $7,000 $5,801 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
2015 - 2019 Long Range Financial Plan October 1 st Enrollment 8,000 5.0% 3.9% 7,000 3.2% 6,000 1.5% 5,000 Students 1.0% 4,000 0.0% 0.2% 3,000 2,000 -1.8% -4.1% -2.8% -2.8% 1,000 0 -5.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Non Charter Charter In-District Charter Out-of-District % Change Non Charter
2015 - 2019 Long Range Financial Plan Revenue Challenges & Uncertainties Future Impact State School Fund Task Force recommendations o High Cost Disability & ELL o Advanced Diploma o Definition of Equity Adequacy of formula revenues for all day KG Potential volatility of poverty data & weights Tax Reform Enrollment Growth
2015 - 2019 Long Range Financial Plan State Formula Revenue per ADMw $9,000 $7,866 $7,594 $7,293 $7,037 $7,049 $8,000 $6,840 $6,246 $6,161 $5,968 $6,051 $5,922 $6,129 $7,000 $5,801 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
2015 - 2019 Long Range Financial Plan October 1 st Enrollment 7,600 5.0% 7,400 3.9% 3.2% 7,200 1.5% 7,000 Students 6,800 1.5% 1.0% 0.9% 0.0% 0.2% 0.3% 0.4% 6,600 6,400 -1.8% 6,200 -4.1% -2.8% -2.8% 6,000 5,800 -5.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Non Charter Charter In-District Charter Out-of-District % Change Non Charter
2015 - 2019 Long Range Financial Plan 2014-15 Expenditure Assumptions - Staffing Class Size Ratios KG 20.00 (23.00) High School 33.20 (34.00) Grades 1-5 27.60 (27.00) Redmond K-12 Online 68.00 (75.00) Middle School 31.75 (32.00) Minimal FTE Growth – 1.2% o Licensed – No growth o Classified – 4.06 FTE increase (Technology) o Admin – 3.00 FTE increase (Technology; Planning Principal)
2015 - 2019 Long Range Financial Plan 2014-15 Expenditure Assumptions - Salary Salary-Related o No additional days restored (3 workdays short) o Horizontal & vertical salary schedule movement o No COLA Related Payroll Costs o PERS rates – no change in rates o Medical Insurance Cap – no increase from $1,145 o No restoration of tuition reimbursement
2015 - 2019 Long Range Financial Plan RSD Average PERS Rates 30.0% 30.0% Base Rate 26.1% Net Rate with Reserves 25.0% 25.0% Net Rate with Reform 21.8% 19.0% 20.0% 20.0% 18.8% 17.7% 16.5% 14.4% 15.0% 15.0% 13.5% 13.1% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2007-09 2009-11 2011-13 2013-15* Excludes 6% member contributions Includes Tier One/Tier Two and OPSRP *Includes impact of 2013 PERS reforms
RSD Compensation Comparison Licensed Classified Agreement* 3 Cut Days 3 Cut Days 3 Cut Days 4% COLA 3% COLA 3% COLA Step Movement Step Movement 2008-09 Range Movement $988 Ins Cap $988 Ins Cap $988 Ins Cap $300 Opt-Out 3 Cut Days 3 Cut Days 3 Cut Days 2009-10 No COLA No COLA No COLA Step Movement Step Movement Range Movement * 4 Day Week * $1,038 Ins Cap $900-$1,038 Ins $1,038 Ins Cap $310 Opt-Out 6 Cut Days 6 Cut Days 6 Cut Days No COLA No COLA No COLA Step Movement Step Movement 2010-11 Range Movement $1,095 Ins Cap $900-$1,095 Ins $1,095 Ins Cap $330 Opt-Out 9 Cut Days 9 Cut Days 9 Cut Days No COLA No COLA No COLA 1/3 Step Movement 1/3 Step Movement 2011-12 1/3 Range Movement $1,095 Ins Cap $900-$1,095 Ins $1,095 Ins Cap $345 Opt-Out $345 Opt-Out 15 Cut Days 14 Cut Days 9 - 14 Cut Days No COLA No COLA No COLA 1/2 Step Movement 1/2 Step Movement 2012-13 Range Movement $1,095 Ins Cap $900-$1,095 Ins $1,095 Ins Cap $345 Opt-Out $360 Opt-Out 3 Cut Days 3 Cut Days No COLA No COLA No COLA 1/6 Step Movement 2013-14 Range Movement $1,145 Ins Cap $950-$1,145 Ins $1,145 Ins Cap $345 Opt-Out $360 Opt-Out * Supervisors, Confidential, Administrators.
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