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EdTec Connect Update: Proposition 30 and the
Education Protection Account Q&A

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The passage of Proposition 30 in November 2012 stabilized funding for schools this year by creating the Education Protection Account, but also created many questions about how those funds would be calculated and when they would be distributed. The CDE’s External Services Subcommittee recently had a discussion, which clarified some of these points.

How EPA is calculated?

Back in July, when the CDE certified the Advanced Apportionment, schools received a 21% reduction in revenue limit funding that was calculated based off the total amount of general purpose funding (state aid and property taxes) from the 2011-12 P2. This reduction was applied directly to schools’ certified state aid amount in the advanced apportionment with the assumption from the state being that Proposition 30 would pass creating an additional $6.9 billion in funding through the Education Protection Account.

Now that Prop 30 has passed, the Department of Finance will be rereleasing estimates for EPA funding in January, but those estimates will not change the reduction amounts that will be taken from state aid at P1. Those reductions will remain consistent at 21% of total revenue limit funding. The final EPA calculation will be made with the P2 certification. Right now funding rates for EPA are projected in the table below.

Funding Rates
EPA (~21% of GP) $1,076 $1,092 $1,125 $1,302
Revenue Limit $4,000 $4,061 $4,183 $4,839
Total GP Funding $5,076 $5,153 $5,308 $6,141

Since the reduction to revenue limit is only being applied to state aid, a school with property tax funding per ADA that is more than the revenue limit amounts listed above will receive a reduced amount of EPA funding. If a school receives all general purpose funding through property taxes there will be no reduction to any revenue limit funding, but the school would still qualify for a minimum level of EPA funding, which is $200 per ADA.

When will the EPA funds be paid?

For the 2012-13 fiscal year, the entirety of the Education Protection Account will be paid once P2 has been certified. The CDE will be issuing warrants to county treasuries by June 30th, which means that charters can’t necessarily expect to have those funds in their bank accounts by the end of June. As we’ve seen in prior years, it is possible that the P2 will be certified early and that the EPA funds could arrive before June 30th.

In future years that EPA payments are scheduled to be made quarterly with payments in September, December, March and June. The September and December payment would likely be based on prior year P2 ADA, with an adjustment made in March for P1 and a final amount calculated in June once P2 has been certified.

Is the EPA funding subject to change after P2 is certified?

Yes, just as state aid and property tax funding are subject to change based on data from P-Annual, EPA funds could also be adjusted. Any adjustment to the funding based on the P-Annual certification would be applied to the March quarterly payment the following year.

EdTec clients, please contact your Client Manager if you have any questions. If you’re not an EdTec client and would like to discuss our high quality charter school support services, please email us at askus@edtec.com or call 510-663-3500 ext. 329.