charter school capital california budget impact on charter schools 3

Copyright © 2012 Charter School Capital, Inc.

Understanding the CA State Budget Impact on Charter Schools

Copyright © 2012 Charter School Capital

TODAY’S SPEAKERS

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Chas Cardall Branche Jones CA LEGISLATIVE

CONSULTANT ORRICK, HERRINGTON

& SUTCLIFFE

John Helgeson Stuart Ellis CHARTER SCHOOL

CAPITAL CHARTER SCHOOL

CAPITAL


AGENDA

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What We Will Cover Today

•  The Issue •  The Impact •  The Solution •  Questions


THE ISSUE

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California State Budget •  What is the real issue?

-  One of the biggest problems has been glossed over -  Focus has been on tax increase initiatives -  But, immediate impact is from 21.2% reduction in general

purpose entitlement funds


THE ISSUE

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California State Budget •  What is the delay in funding?

-  This is not a cut – it’s a delay in payment -  It’s in addition to existing deferrals already in place -  21.2% is not taken all at once, but through monthly

installments


THE ISSUE

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California State Budget •  Who does this impact?

-  Impacts all public schools – including charter schools -  Most charters don’t have the savings to absorb this state

payment delay


THE ISSUE

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California State Budget •  When will this occur?

-  Already has - began in July -  Schools with deferral waivers may not have noticed this yet


THE IMPACT

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November Ballot Initiatives •  Overview on Prop 30 + Prop 38


THE IMPACT

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November Ballot Initiatives •  Only Prop 30 passes

-  Existing 21.2% delay in payment assumes Prop 30 passes -  Should be no additional reductions or deferrals -  New tax revenues go into “Education Protection Account” of

the State’s General Fund -  Funds in this account to be paid out next June


THE IMPACT

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November Ballot Initiatives •  Prop 30 + Prop 38 Fail

-  Substantial cut in general purpose entitlement funding (trigger cuts)

-  More deferrals during the P-1 payment period -  Legislature may enact mid-year budget amendments


THE IMPACT

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November Ballot Initiatives •  Only Prop 38 passes

-  Not clear what may happen with funding timing and amounts -  Some implementing legislation seems likely


THE IMPACT

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November Ballot Initiatives •  Both Prop 30 and Prop 38 Pass

-  Initiative that receives the most votes will be implemented and the other will not be effective


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THE IMPACT

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THE IMPACT

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THE IMPACT

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Deferral Comparison •  How does this compare to others?

-  Expect monthly deferrals that result in 21.2% of your general purpose entitlement

-  Delayed until June -  Each monthly payment will be less than originally projected


THE IMPACT

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An exercise to put this deferral in context…


THE SOLUTION

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What Should You Do? •  Educate yourself

-  Understand the impacts to your school -  Ask questions -  Carefully analyze month-by-month payments to know what

your cash flow will look like -  Visit CDE site http://www.cde.ca.gov/fg/aa/pa/iassf12adv.asp

-  Plan, plan, plan


THE SOLUTION

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Help Spread The Word •  Every charter school in CA should know

-  This 21.2% deferral will affect every charter school -  If not planned for, it could be significant enough to really hurt

some charter school budgets


THE SOLUTION

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We’re Here To Help You •  Just ask

-  Reach out with any questions you have -  We want you to succeed in bringing high quality education to

your students -  Sign up for our blog to follow timely information at

http://charterschoolcapital.org and click on the blog link •  Charter School Capital provides cash flow assistance to cover

the 21% or other delays


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QUESTIONS?

charter school capital california budget impact on charter schools 3

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