charter school capital california budget impact on charter schools

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Copyright © 2012 Charter School Capital Understanding the CA State Budget Impact on Charter Schools

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Charter School Capital and a panel of experts provide timely and actionable information regarding the impacts of this funding reduction, an overview of current legislation and insights on how to plan for the cash flow shortfall.

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Page 1: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

Understanding the CA State Budget Impact on Charter Schools

Page 2: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

TODAY’S SPEAKERS

1

Chas Cardall Branche Jones CA LEGISLATIVE

CONSULTANT

Miles Denniston CHARTER SCHOOL

MGT CORP ORRICK

John Helgeson Stuart Ellis CHARTER SCHOOL

CAPITAL CHARTER SCHOOL

CAPITAL

Page 3: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

AGENDA

2

THE SOLUTION

QUESTIONS

THE IMPACT

THE ISSUE

Page 4: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE ISSUE

3

California State Budget

•  What is the real issue? -  Biggest impact has been glossed over

-  Focus has been on tax increase initiatives

-  But, immediate impact is from 21.2% reduction in general purpose entitlement funds

Page 5: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE ISSUE

4

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

Page 6: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE ISSUE

5

California State Budget

•  Who does this impact? -  Impacts all public school – including charter schools

-  Most charters don’t have the savings to absorb this state payment delay

Page 7: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE ISSUE

6

California State Budget

•  When will this occur? -  Already has - began in July

-  Schools with deferral waivers may not have noticed this yet

Page 8: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE ISSUE

7

California State Budget

•  How does Prop 30 pay a role in this discussion? - Payment delay taking place now regardless of November

results

Page 9: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

8

Deferral Comparison

•  How does this compare to others? -  Expect monthly deferrals that result in 21.2% of your annual

budget

-  Delayed until June

-  Each monthly payment will be less than originally projected

Page 10: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

9

An exercise to put this deferral in context…

Page 11: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

10

November Ballot Initiatives

•  Background on Prop 30 + Prop 38

Page 12: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

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

Page 13: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

12

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

Page 14: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

13

November Ballot Initiatives

•  Only Prop 38 passes

-  Not clear what may happen with funding timing and amounts

-  Some implementing legislation seems likely

Page 15: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

14

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

Page 16: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

15

November Ballot Initiatives

•  Scenarios explained

•  (BAR CHART GOES HERE)

0%

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Page 17: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE IMPACT

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0%

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Base Line

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Page 18: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

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 new budget will look like

-  Plan, plan, plan

Page 19: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE SOLUTION

18

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

Page 20: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

THE SOLUTION

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We’re Here To Help You

•  Just ask

-  Charter School Capital and CSMC are both well versed on this subject

-  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/charter-funding-blog/

Page 21: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2012 Charter School Capital

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QUESTIONS?

Page 22: Charter School Capital California Budget Impact On Charter Schools

Copyright © 2011 Charter School Capital

Stuart Ellis: [email protected]

Contact Information:

Toll Free: 877.272.1001

charterschoolcapital.org

John Helgeson: [email protected]