Sequestration Impacts on Arizona Charter Schools
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Transcript of Sequestration Impacts on Arizona Charter Schools
Copyright © 2013 Charter School Capital, Inc.
Sequestration Impacts On AZ Charter
Schools
June 18, 2013
2 Copyright © 2013 Charter School Capital, Inc.
WELCOME
• Panelists – John Helgeson, Charter School Capital – Frank Yanez, FMY Consultants – Lynne Adams, Osborn Maledon
• What is sequestration? • What are the impacts? • How will it impact my charter school? • What should I plan for?
Agenda
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What Is Sequestration?
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WHAT IS SEQUESTRATION?
• Budget Control Act of 2011 – Creates a mechanism to encourage a “give and take” in budget
negotiations known as sequester – Implementation is sequestration
• Definition – “Sequestration is a mechanism to enforce deficit reduction by motivating
Congress to compromise on budget negotiations or face mandatory cuts of $85B.”
– Forces federal budget cuts – Budget cuts like this are bad policy
Definition
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WHAT IS SEQUESTRATION?
• Legislators in DC not able to create a budget with appropriate cuts to reduce the 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 program
Politics
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WHAT IS SEQUESTRATION?
Federal Deficit – FY 2008 - 2015
0
200
400
600
800
1000
1200
1400
1600
2008 2009 2010 2011 2012 2013 2014 2015
US Federal Deficit - FY 2008 - 2014
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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 year
When?
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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 months
rather than 7 months this year
Is this one time?
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What Are The Impacts?
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SEQUESTRATION IMPACTS
Pre-cut federal spending on elementary/secondary ed
School Lunch (Dept. of Ag)
23%
Title 1 (Ed) 20%
Special Ed (Ed) 16%
Head Start (HHS) 9%
Other 21%
School Improvements
(Ed) 9%
Impact Aid (Ed) 2%
Total = $78B
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SEQUESTRATION IMPACTS
Non-exempt defense
discretionary 28%
Non-exempt nondefense discretionary
funding 18%
Medicare 7%
Non-exempt nondefense mandatory programs
18%
Non-exempt defense
mandatory programs
29%
Overall $85B in Cuts
What is being cut?
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SEQUESTRATION IMPACTS
Title 1, $740
Impact Aid, $58
Special Ed, $644
Head Start, $406
Teacher Quality State Grants, $126
21st Century Community
Learning Ctrs, $59
Rural Ed, $9
Federal cuts in $ millions to education
$2 Billion in total cuts across programs
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SEQUESTRATION IMPACTS
• Effects are not universal because states and individuals benefit from programs differently
• Impact timing depends on program and local delivery system • Federal funding for education cut 5.2% • It appears students most impacted will be those from disadvantaged areas
and those with special needs, although ALL federal funding is reduced – Title 1 and Special Ed being hit hardest – Many Federal programs help those from disadvantaged areas and with
cuts, these areas will be hit the most
What are the impacts?
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SEQUESTRATION IMPACTS
• Charters will be particularly hard hit – Facility costs won’t be reduced to account for less funding, so entirety of
budget cuts will be forced to come from smaller classroom budgets – Nationally on average, charter school students received $4,000 less each
year than peers in traditional public schools – In Arizona, disparity is $1,900 – Cuts in spending or significant delays in payment for key programs and
services such as Special Education, Title 1 and Impact Aid o Title I, II, IDEA, NSLP and Impact Aid could be reduced 5-6% o Requirements for programs will not be lessened o Less money to run programs with the same requirements o Decision on where to attain the money that is being lost to continue
programs at current level of success
General impacts to charter schools
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How Will Cuts Impact You?
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HOW WILL CUTS IMPACT YOU?
• $52.9M in cuts statewide • Title 1
– $18M cut – 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 1,000 teachers could be laid off hurting more than 100,000 students
Impacts to Arizona schools
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HOW WILL CUTS IMPACT YOU?
• Title 1 and Special Education cuts will hit schools next month (July) – These programs are “forward funded,” so no cuts last fiscal year – Schools receive funding in July and October – DOE has stated that the total amount of cuts will be made in July
payments • Schools will start new fiscal year with significantly reduced federal funds • Good news? No delayed funding for charter schools, just for district schools
Impacts to Arizona schools
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HOW WILL CUTS IMPACT YOU?
• School districts likely to see the greatest cuts in Title 1 funding – Tucson Unified District
o 8.8% cut = $2.4M – Phoenix Union High School District
o 8.7% cut = $1.5M – Mesa Unified District
o 1.9% cut = $454,077 • Districts that receive impact aid (districts with reservation lands or military
bases) will continue to see significant reductions in impact aid funding
Impacts to Arizona schools
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HOW WILL CUTS IMPACT YOU?
• Tucson-area charter school in operation for 11 years • Approximately 1,300 students, 2 campuses • 2013 Allocations
– Title I $835,376 – Title II $25,271 – IDEA $182,634
• 2014 Potential Reductions – Title I $49,553 – Title II $1,516 – IDEA $10,958
• Total Potential Reduction -- $62,027
Scenario – Arizona Community Development Corp
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What Can You Do?
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WHAT CAN YOU DO?
• Do the math and forecast so you know how much less you have to spend • Don’t assume you will get the same funding amounts as last year because
Title 1 and IDEA cuts will hit for the first time in July • Build in the potential for significant delays in payments • Plan for the worst case scenario • If you have questions…ask us – we’re here to help you
Plan
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WHAT CAN YOU DO?
• How will this impact new schools? • As schools opt out, will these funds go to schools continuing Title I? • What type of reduction should we be planning for? • What is the impact on CSP grant for new schools? • In FY13, our school experience 20% not paid for Impact Aid. What % should
we expect for FY14?
FAQs
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Questions?
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Thank You.
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877-272-1001 Frank Yanez [email protected]