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Copyright © 2013 Charter School Capital, Inc.SequestrationImpacts OnCharterSchoolsMay 22, 2013
2Copyright © 2013 Charter School Capital, Inc.WELCOME•  Panelists– John Helgeson, Charter School Capital– Frank Yanez, FMY...
Copyright © 2013 Charter School Capital, Inc.What Is Sequestration?
4Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Budget Control Act of 2011– Creates a mechanism to ...
5Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?Federal Deficit – FY 2008 - 20150200400600800100012001...
6Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Legislators in DC not able to create a budget with ...
7Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Began March 1 of this year•  Continue through end o...
8Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Unknown•  If Congress does not agree to a compromis...
Copyright © 2013 Charter School Capital, Inc.9Copyright © 2013 Charter School Capital, Inc.What Are The Impacts?
10Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSNon-exemptdefensediscretionary28%Non-exemptnondefensed...
11Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSFederal spending on elementary/secondary edSchool Lunc...
12Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSTitle 1, $740Impact Aid,$58Special Ed,$644Head Start,$...
13Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTS•  Effects are not universal because states and indivi...
14Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTS•  Charters will be particularly hard hit– Facility co...
Copyright © 2013 Charter School Capital, Inc.How Will Cuts Impact You?
16Copyright © 2013 Charter School Capital, Inc.HOW WILL CUTS IMPACT YOU?•  Teachers and schools– $17.7M primary and second...
17Copyright © 2013 Charter School Capital, Inc.HOW WILL CUTS IMPACT YOU?•  School districts likely to see the greatest cut...
Copyright © 2013 Charter School Capital, Inc.What Can You Do?
19Copyright © 2013 Charter School Capital, Inc.WHAT CAN YOU DO?•  Do math so you know how much less you have to spend•  Bu...
Copyright © 2013 Charter School Capital, Inc.Questions?
Copyright © 2013 Charter School Capital, Inc.21Copyright © 2013 Charter School Capital, Inc.Thank You.
22Copyright © 2013 Charter School Capital, Inc.877-272-1001Frank Yanezfyanez@charterschoolcapital.org
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Sequestration Impacts on Charter Schools

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Transcript of "Sequestration Impacts on Charter Schools"

  1. 1. Copyright © 2013 Charter School Capital, Inc.SequestrationImpacts OnCharterSchoolsMay 22, 2013
  2. 2. 2Copyright © 2013 Charter School Capital, Inc.WELCOME•  Panelists– John Helgeson, Charter School Capital– Frank Yanez, FMY Consultants– John Palmer, Orrick, Herrigton & Sutcliffe LLP•  What is sequestration?•  What are the impacts?•  How will it impact my charter school?•  What should I plan for?Agenda
  3. 3. Copyright © 2013 Charter School Capital, Inc.What Is Sequestration?
  4. 4. 4Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Budget Control Act of 2011– Creates a mechanism to encourage a “give and take” in budgetnegotiations known as sequester– Implementation is sequestration•  Definition =– “Sequestration is a mechanism to enforce deficit reduction by motivatingCongress to compromise on budget negotiations or face mandatory cutsof $85B.”– Forces federal budget cuts– Budget cuts like this are bad policyDefinition
  5. 5. 5Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?Federal Deficit – FY 2008 - 2015020040060080010001200140016002008 2009 2010 2011 2012 2013 2014 2015US Federal Deficit - FY2008 - 2014
  6. 6. 6Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Legislators in DC not able to create a budget with appropriate cuts to reducethe federal budget deficit•  What is the budget deficit?– Deficit versus debt•  No compromise made•  $85B of mandatory cuts go in to effect and will impact every federal programPolitics
  7. 7. 7Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Began March 1 of this year•  Continue through end of Federal Fiscal Year (Sept 30)•  This year cuts will be implemented over 7 months instead of 12 months•  Feel more painful because of reduced timeframe this calendar yearWhen?
  8. 8. 8Copyright © 2013 Charter School Capital, Inc.WHAT IS SEQUESTRATION?•  Unknown•  If Congress does not agree to a compromise, then the sequester will continue•  Next year it would start in September, so cuts implemented across 12 monthsrather than 7 months this yearIs this one time?
  9. 9. Copyright © 2013 Charter School Capital, Inc.9Copyright © 2013 Charter School Capital, Inc.What Are The Impacts?
  10. 10. 10Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSNon-exemptdefensediscretionary28%Non-exemptnondefensediscretionaryfunding18%Medicare7%Non-exemptnondefensemandatoryprograms18%Non-exemptdefensemandatoryprograms29%Overall $85B in CutsWhat is being cut?
  11. 11. 11Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSFederal spending on elementary/secondary edSchool Lunch(Dept. of Ag)23%Title 1 (Ed)20%Special Ed(Ed) 16%Head Start(HHS) 9%Other 21%SchoolImprovements(Ed) 9%Impact Aid (Ed)2%Total = $78B
  12. 12. 12Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTSTitle 1, $740Impact Aid,$58Special Ed,$644Head Start,$406TeacherQuality StateGrants, $12621st CenturyCommunityLearning Ctrs,$59Rural Ed, $9Federal cuts in $ millions$2 Billion in total cuts across programs
  13. 13. 13Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTS•  Effects are not universal because states and individuals benefit fromprograms differently•  Impact timing depends on program and local delivery system•  Federal funding for education cut 5.1%•  It appears students most impacted will be those from disadvantaged areasand those with special needs– Title 1 and Special Ed being hit hardest– Many Federal programs help those from disadvantaged areas and withcuts, these areas will be hit the mostWhat are the impacts?
  14. 14. 14Copyright © 2013 Charter School Capital, Inc.SEQUESTRATION IMPACTS•  Charters will be particularly hard hit– Facility costs won’t be reduced to account for less funding, so entirety ofbudget cuts will be forced to come from smaller classroom budgets– Nationally on average, charter school students received $4,000 less eachyear than peers in traditional public schools– In Arizona, disparity is $1,900– Cuts in spending or significant delays in payment for key programs andservices such as Special Education, Title 1 and Impact AidGeneral impacts to charter schools
  15. 15. Copyright © 2013 Charter School Capital, Inc.How Will Cuts Impact You?
  16. 16. 16Copyright © 2013 Charter School Capital, Inc.HOW WILL CUTS IMPACT YOU?•  Teachers and schools– $17.7M primary and secondary education– 240 teacher and aide jobs at risk– 19,000 fewer students would be served– 70 fewer schools would receive funding•  Education for Children with Disabilities– $10M cut– 120 fewer teachers, aides, and staff who help children with disabilities•  National Education Association puts loss higher suggesting more than 1,000teachers could be laid off hurting more than 100,000 studentsImpacts to Arizona schools
  17. 17. 17Copyright © 2013 Charter School Capital, Inc.HOW WILL CUTS IMPACT YOU?•  School districts likely to see the greatest cuts in Title 1 funding– Tucson Unified Districto 8.8% cut = $2.4M– Phoenix Union High School Districto 8.7% cut = $1.5M– Mesa Unified Districto 1.9% cut = $454,077Impacts to Arizona schools
  18. 18. Copyright © 2013 Charter School Capital, Inc.What Can You Do?
  19. 19. 19Copyright © 2013 Charter School Capital, Inc.WHAT CAN YOU DO?•  Do math so you know how much less you have to spend•  Build in the potential for significant delays in payments•  Plan for the worst case scenario•  If you have questions…ask. We’re happy to help.Plan
  20. 20. Copyright © 2013 Charter School Capital, Inc.Questions?
  21. 21. Copyright © 2013 Charter School Capital, Inc.21Copyright © 2013 Charter School Capital, Inc.Thank You.
  22. 22. 22Copyright © 2013 Charter School Capital, Inc.877-272-1001Frank Yanezfyanez@charterschoolcapital.org
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