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Deferrals

Relevant News and Articles

Deferrals, The Devil is in the Details: California K-12 public schools face a major funding crisis. Because of reduced economic activity due to the COVID pandemic and the resulting loss of state tax revenue, Proposition 98 payments for schools in California are currently being deferred from February through . . . Learn More

Guide to California’s education budget deferrals: pros, cons and costs of delayed payments: Districts won’t be reimbursed for $11 billion in spending until 2021-22(EdSource). Learn More at EdSource.org

CA Deferral Schedule

(click image to enlarge)

The California Deferrals Schedule (pictured to the left) shows the LCFF payment deferrals for the upcoming year. For more information on how deferrals will directly affect your charter school or district, get your Customized Cashflow Forecast.

(click image to enlarge)

The Cashflow Forecast is intended to provide an estimate of how the deferrals may impact your school’s cash flow. With your provided inputs, you will receive information including when your largest negative cash balance may be and in what amount. For a sample analysis, see the sample provided to the left.

Get Your Customized Cashflow Forecast

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Deferrals, The Devil is in the Details

Scott Haller | December 10, 2020

•California K-12 public schools face a major funding crisis. Because of reduced economic activity due to the COVID pandemic and the resulting loss of state tax revenue, Proposition 98 payments for schools in California are currently being deferred (See the Deferrals Schedule here) from February through June of 2021 into the 2021-2022 school year, to the tune of $13.5 billion.

• More than 1/3 of the school’s total LCFF revenue will not be fully recovered until the end of the 2021 calendar year. In addition, over $1.3 billion of special education funding is currently being deferred to 2021-2022.

• With the economic outlook still uncertain, as the pandemic continues to affect our daily lives, it is unclear how these numbers may change in the months ahead. It is best to be prepared and have a strategy in place. A few schools may be able to weather this storm by relying on significant cash reserves to carry them through this time.

• From February to November 2021, the vast majority of charter schools and small to medium school districts will need to find financing solutions that will allow them to manage this cash flow deficit so that teachers can continue to be paid and schools can remain open.

• This is not just a one-time problem. A decade ago when the state also began to defer payments to schools, it took 5 years to fully reverse the apportionment deferral policy even as the economy recovered. So deferrals at some level will be around for a while, as will the need for financing.

• Making the situation even more challenging, schools received no cost of living increase (COLA) to this year’s state funding levels, and future year COLA increases are problematic at best. Also, schools now have the additional expense of financing their cash flow deficits. In summary, there are difficult times ahead concerning the day-to-day business of running a school, both the large and the small.

• Lumen Network is here to help. With quick and simple access to affordable funding, we can connect you to school finance experts to help ease the stress of cashflow so you can focus on your primary function – educating our children. Learn More

Lumen Network is a non-profit organization whose mission is to spark synergy between school professionals, authorizers, advocates, and community resources by enhancing stakeholder connectivity and communication.

Get a Cashflow Forecast for your school here

Deferrals, The Devil is in the Details

Scott Haller | December 10, 2020

•California K-12 public schools face a major funding crisis. Because of reduced economic activity due to the COVID pandemic and the resulting loss of state tax revenue, Proposition 98 payments for schools in California are currently being deferred (See the Deferrals Schedule here) from February through June of 2021 into the 2021-2022 school year, to the tune of $13.5 billion.

• More than 1/3 of the school’s total LCFF revenue will not be fully recovered until the end of the 2021 calendar year. In addition, over $1.3 billion of special education funding is currently being deferred to 2021-2022.

• With the economic outlook still uncertain, as the pandemic continues to affect our daily lives, it is unclear how these numbers may change in the months ahead. It is best to be prepared and have a strategy in place. A few schools may be able to weather this storm by relying on significant cash reserves to carry them through this time.

• From February to November 2021, the vast majority of charter schools and small to medium school districts will need to find financing solutions that will allow them to manage this cash flow deficit so that teachers can continue to be paid and schools can remain open.

• This is not just a one-time problem. A decade ago when the state also began to defer payments to schools, it took 5 years to fully reverse the apportionment deferral policy even as the economy recovered. So deferrals at some level will be around for a while, as will the need for financing.

• Making the situation even more challenging, schools received no cost of living increase (COLA) to this year’s state funding levels, and future year COLA increases are problematic at best. Also, schools now have the additional expense of financing their cash flow deficits. In summary, there are difficult times ahead concerning the day-to-day business of running a school, both the large and the small.

• Lumen Network is here to help. With quick and simple access to affordable funding, we can connect you to school finance experts to help ease the stress of cashflow so you can focus on your primary function – educating our children. Learn More

Lumen Network is a non-profit organization whose mission is to spark synergy between school professionals, authorizers, advocates, and community resources by enhancing stakeholder connectivity and communication.

Get a Cashflow Forecast for your school here