Thursday, November 17, 2011


smf: the CCSA had the first and most concise analysis of this unfortunate news. Charter Schools – especially small truly independent ones - are probably most in jeopardy with these cuts because of their small size and perceived lack of credit-worthiness.

Supt. Deasy, setting a dark tone  in his remarks on Patt Morrison’s radio show today  (Patt had a separate feature on the LAO report) said the mid-year cuts are no longer a possibility, they are inevitable …but then later chirped an enthusiastic tweet about how the LAUSD/UTLA contract negotiations promise a bright new wonderful tomorrow.

from the California Charter Schools Association Capitol Update |

November 16, 2011 -  Today, the Legislative Analyst's Office (LAO) released its economic forecast report, the 2012-13 Budget: California's Fiscal Outlook.  According to the report, state General Fund revenues will be short by $3.7 billion by the end of this year, and the state will face a $13 billion shortfall in 2012-13.  The LAO's revised revenue forecast for 2011-12 are a critical point in evaluating whether automatic “trigger” cuts to education will be implemented in January.  If these projections are confirmed by Department of Finance in December, automatic cuts of $2 billion would be imposed in January. 

Under the LAO forecast, schools would face mid-year cuts of about $1.5 billion, with $1.1 billion coming out of K-12 general purpose funding.  These cuts would reduce Proposition 98 spending to $47.2 billion in 2011-12 and represent a 3.3% reduction to revenue limits.  For charter schools this would mean a mid-year cut of approximately $185 per pupil in general purpose funds.  This cut would be accompanied by authority to reduce the school year by five days, though this may not be a practical option for many schools and districts.  The  LAO further cautions that because of the continued deficits, for 2012-13 the state may not be able to fully fund the Proposition 98 minimum guarantee again, and that any trigger cuts made in 2011-12 could carry forward into 2012-13.

Under the “trigger” provisions of the 2011-12 Budget Act, specified cuts are based on the level of the projected shortfall.  The first $1 billion of the shortfall triggers $600 million in cuts to the California State University system, University of California system, and various developmental and health services programs.  When the revenue shortfall exceeds $2 billion, cuts then apply to Proposition 98 funding for K-12 and community colleges. The law specifies that up to about $1.8 billion in Proposition 98 cuts may occur, depending on the shortfall. About $300 million would come out of home to school transportation and community colleges, and the rest out of K-12 general purpose funds. The LAO forecast projects $1.5 billion of the possible $1.8 billion in Proposition 98 cuts would be necessary.  $1.1 billion of that would come from general purpose revenues.

In December, the Department of Finance (DOF) will make its own forecast which will also influence the trigger decision.  However, we believe it is unlikely the DOF forecast will be different enough to eliminate the need for the trigger cuts, though the exact level of the cuts will be determined by the DOF.  The Director of Finance noted today that “Some level of trigger cuts will likely occur, but the exact amount will be known in December." 

While there is still a possibility that the Legislature could reconvene before the cuts are triggered and attempt to resolve the shortfall in a different way, it is difficult at this point to imagine what that solution might look like.

For more details on the projection review the full LAO report

for the California Charter Schools Association:

Cynthia Bryant – Senior Vice President, Government Affairs
Colin Miller – Vice President, Policy
Tanya Hoffman – Director, Legislative Affairs
Michelle Low – Director, Regulatory Affairs
Nicole Virga Bautista – Manager, Government Affairs

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