Pub. 9 2019-2020 Issue 2

7 CONTINUED ON PAGE 8 Without the 6% increase in the WPU, it is unlikely that the voters would approve the proposed amendment. The UEA was going to oppose it, and there was no one willing to fund a “Yes” campaign. Without an amendment to the state constitution, the Legislature would not have appropriated anywhere near this much to public education, especially not on an ongoing basis. In pulling together the budget, the Legislature relied on revenue estimates as economic conditions existed as of February 17. On that day, the Dow Jones Industrial Average was at 29,398. As the impacts of COVID-19 have emerged, the Dow stands at 21,237. A 25% decrease in the Dow isn’t a perfect gauge of economic conditions, but it does reflect a fundamental change in our economy. Restaurants, schools, bars, sports leagues, ski resorts, etc. are not operating, and may not operate at normal capacity for weeks, perhaps months. In other words, personal and corporate incomes have dropped significantly and won’t rebound for months. Since those incomes form the basis for how much income tax the state collects, the economic assumptions built into the revenue projections the Legislature used in constructing their budget no longer hold. The Legislature will have to hold a special session to amend its revenue projections and the state budget. It is not clear when they will hold that special session, but May seems the most likely time frame. More importantly, it is difficult to imagine a scenario where they can maintain robust increases in public education funding. If economic consequences prevent them from providing those promised increases in public education funding, the changes to public education funding could be large and are unknown. What does that mean for us as charter schools? Be very careful how much of the ongoing increases you factor into your school’s budget. There is good reason to believe not all of these increases will emerge. Perhaps it would be wise to treat some portion of the increases in the value of the WPU as one-time, even for one-time nice to have expenses. If the hoped-for increases don’t emerge, you won’t have to rework your budget fundamentally. And if they do emerge, even better. That said, it is unlikely that economic conditions will change what the Legislature provides in LRF funding. Under the existing code, LRF funding should increase by about $207 per student. On the policy front, the Legislature passed far fewer education bills this year than they usually do. For that, we are all grateful (I even got to see my wife occasionally during the General Session. She usually is a legislative widow, as I am to the Capitol by about 6:30, and don’t get home until bedtime.) Much of the Legislature’s attention this year focused onmaking sure LEAs have appropriate financial information systems. HB 67 — LEA Financial Information Systems (Rep. Ballard) This bill directs the State Board to identify the modules every LEA’s financial information system needs and then provide either a grant or reimbursement to LEAs to obtain and implement those modules at their schools. The Legislature appropriated $4 million ongoing for this effort. HB 242 — Charter school operations and school accounting amendments (Rep. Moss) For most charter schools, the most important part of this bill will be the requirement to convert from using FASB to GASB as the source of their accounting principles. Business