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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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Copyright © 2012 Charter School Capital
Understanding the CA State 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
Copyright © 2012 Charter School Capital
AGENDA
2
THE SOLUTION
QUESTIONS
THE IMPACT
THE ISSUE
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
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
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
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
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
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
Copyright © 2012 Charter School Capital
THE IMPACT
9
An exercise to put this deferral in context…
Copyright © 2012 Charter School Capital
THE IMPACT
10
November Ballot Initiatives
• Background on Prop 30 + Prop 38
Copyright © 2012 Charter School Capital
THE IMPACT
11
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
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
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
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
Copyright © 2012 Charter School Capital
THE IMPACT
15
November Ballot Initiatives
• Scenarios explained
• (BAR CHART GOES HERE)
0%
5%
10%
15%
20%
25%
30%
Per
cen
t o
f A
nn
ual
Rev
enu
es R
ecei
ved
Eac
h M
on
th
Fiscal Year 2012-2013
Base Line
2011-2012
Pass
Not Pass
Copyright © 2012 Charter School Capital
THE IMPACT
16
0%
20%
40%
60%
80%
100%
120%
Cu
mm
ula
tive
Per
cen
t o
f A
nn
ual
Rev
enu
es P
aid
Fiscal Year 2012-2013
Base Line
2011-2012
Pass
Not Pass
Copyright © 2012 Charter School Capital
THE SOLUTION
17
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
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
Copyright © 2012 Charter School Capital
THE SOLUTION
19
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/
Copyright © 2012 Charter School Capital
20
QUESTIONS?
Copyright © 2011 Charter School Capital
Stuart Ellis: [email protected]
Contact Information:
Toll Free: 877.272.1001
charterschoolcapital.org
John Helgeson: [email protected]