Download: Complete Bulletin. PDF file.

School districts that operate under a contingency budget in the 2006-07 school year will
have their spending increase capped at 4.00 percent over last year's budget. According to the law,
the contingency budget cap is equal to the lesser of 120% of the calendar year average CPI
increase or 4.00 percent. In 2005, the average calendar year increase in the CPI was 3.4% and
increasing 3.4% by 120% equals 4.08%. Therefore, the contingency budget cap for 2006-07 will
be 4.00 percent.

Under a contingency budget, a district may only fund those items that are deemed to be an
"ordinary contingent expense." Although an item may be an "ordinary contingent expense," the
total amount of a contingency budget may not exceed the contingency budget spending cap.
Certain expenditures, such as those for voter-approved capital projects and expenditures
attributable to increases in enrollment, are exempt from the contingency budget cap.
Spending increases for the 2005-06 school year under a contingency budget were capped
at 3.24 percent over their 2004-05 budget.

The chart in the complete bulletin shows what the cap has been in previous years.