Item 4: Adoption of Resolution 5023 Calling a City Election on May 17, 2011, on a Temporary City Income Tax to Raise Funds for Local Schools

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strategies include a limited, but still substantial, risk until it is determined that projected City tax revenue is matched by realized revenue from the tax. For subsequent years, the level of state funding, labor negotiations, changes in City income tax revenue and other factors that affect budgets could change, and those changes could require additional reductions in teachers, increases in furlough days and/or increases in class size. 3.Will Bethel impose instructional furlough days or increase class size if a local income tax is referred to the voters in November, either at $4.8 million or $7.6 million as per the assumptions above? Yes, it is likely that one or both of these budget reduction methods would necessarily be imposed. Response from 4J: 1.How much revenue is needed in FY 12 to allow 4J to eliminate instructional furlough days and keep average class size from increasing? Assuming that 4J receives from the State the current projected revenues, then they need: At the $12 million revenue level, reductions directly affecting classroom instruction could likely be reduced significantly in 2011-12 if other budget reduction strategies including compensation- related adjustments are achieved and the district issued Tax Anticipation Notes. Given the uncertainty of these budget variables, the district would not be able to assess this until after the th May 17 election. This level of funding would not preclude further reductions in 2012-13. If the $19 million in revenue were guaranteed, it is likely that reductions directly affecting classroom instruction could potentially be eliminated assuming other budget reduction strategies including compensation-related adjustments are achieved and the district issued Tax Anticipation Notes. Again, given the uncertainty of several budget variables, the district would th not be able to assess this until after the May 17 election. 2.Will 4J lay off any teachers, impose instructional furlough days or increase class sizes if a local income tax is approved by the voters in May, either at $12 or $19 million as per the assumptions above? Probably, but depending on the level of income tax realized, the reductions directly affecting classroom instruction would likely be reduced. We potentially could put furlough days at the end of the year and then restore them once the measure is passed and income is realized. Imposing an income tax to collect $12 or $19 million does not guarantee that amount being available for FY 12 because there is no guarantee of collection rates, cost of implementation, timing of tax payments, or taxpayer incomes. If a school income tax were projected to raise the entire amount of the FY12 deficit, until the legislature acts and 4J receives the first year of new City income tax revenues, the District cannot guarantee the number of teachers, the number of furlough days or class sizes. For subsequent years, the level of state funding, labor negotiations, changes in City income tax revenue and other factors that affect our budgets could change, and those changes could require additional reductions in teachers, increases in furlough days and/or increases in class size. \\Cesrv500\cc support\CMO\2011 Council Agendas\M110214\S1102144.doc