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Copyright © 2012 Charter School Capital, Inc.
Understanding the CA State Budget Impact on Charter Schools
Copyright © 2012 Charter School Capital
TODAY’S SPEAKERS
2
Chas Cardall Branche Jones CA LEGISLATIVE
CONSULTANT ORRICK, HERRINGTON
& SUTCLIFFE
John Helgeson Stuart Ellis CHARTER SCHOOL
CAPITAL CHARTER SCHOOL
CAPITAL
Copyright © 2012 Charter School Capital
AGENDA
3
What We Will Cover Today
• The Issue • The Impact • The Solution • Questions
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
THE IMPACT
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November Ballot Initiatives • Overview on Prop 30 + Prop 38
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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THE IMPACT
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Copyright © 2012 Charter School Capital
THE IMPACT
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Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
THE IMPACT
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An exercise to put this deferral in context…
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 cash flow will look like - Visit CDE site http://www.cde.ca.gov/fg/aa/pa/iassf12adv.asp
- Plan, plan, plan
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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
Copyright © 2012 Charter School Capital
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QUESTIONS?
Copyright © 2012 Charter School Capital, Inc.
Stuart Ellis: [email protected]
Contact Information:
Toll Free: 877.272.1001
http://charterschoolcapital.org
John Helgeson: [email protected]