Charter School Capital California 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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Charter School Capital California Budget Impact On Charter Schools

  1. 1. Understanding the CA State Budget Impact on Charter SchoolsCopyright © 2012 Charter School Capital
  2. 2. TODAY’S SPEAKERSChas Cardall Branche Jones Miles Denniston CA LEGISLATIVE CHARTER SCHOOL ORRICK CONSULTANT MGT CORP John Helgeson Stuart Ellis CHARTER SCHOOL CHARTER SCHOOL CAPITAL CAPITAL Copyright © 2012 Charter School Capital 1
  3. 3. AGENDA THE ISSUE THE IMPACT THE SOLUTION QUESTIONS Copyright © 2012 Charter School Capital 2
  4. 4. THE ISSUE 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 3
  5. 5. THE ISSUE 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 4
  6. 6. THE ISSUE 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 5
  7. 7. THE ISSUE 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 6
  8. 8. THE ISSUE 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 7
  9. 9. THE IMPACT 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 8
  10. 10. THE IMPACT An exercise to put this deferral in context… Copyright © 2012 Charter School Capital 9
  11. 11. THE IMPACT November Ballot Initiatives •  Background on Prop 30 + Prop 38 Copyright © 2012 Charter School Capital 10
  12. 12. THE IMPACT 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 11
  13. 13. THE IMPACT 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 12
  14. 14. THE IMPACT 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 13
  15. 15. THE IMPACT 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 14
  16. 16. THE IMPACT 30% November Ballot InitiativesPercent of Annual Revenues Received Each Month 25% •  20% Scenarios explained •  (BAR CHART GOES HERE) 15% Base Line 2011-2012 10% Pass Not Pass 5% 0% Fiscal Year 2012-2013 Copyright © 2012 Charter School Capital 15
  17. 17. THE IMPACT 120% 100% Cummulative Percent of Annual Revenues Paid 80% 60% Base Line 2011-2012 Pass 40% Not Pass 20% 0% Fiscal Year 2012-2013 Copyright © 2012 Charter School Capital 16
  18. 18. THE SOLUTION 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 17
  19. 19. THE SOLUTION 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 18
  20. 20. THE SOLUTION 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 19
  21. 21. QUESTIONS? Copyright © 2012 Charter School Capital 20
  22. 22. Contact Information:John Helgeson: jhelgeson@charterschoolcapital.orgStuart Ellis: sellis@charterschoolcapital.orgToll Free: 877.272.1001charterschoolcapital.org Copyright © 2011 Charter School Capital

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