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Good Morning, The purpose of this communication is to provide two updates related to funding for the final revenue amount for the 2021–22 Education Protection Account (EPA) entitlement calculation and associated impacts on Principal Apportionment payments. Additional information will be made available when the California Department of Education (CDE) certifies the 2021–22 Second Principal Apportionment (P-2). First, EPA revenues for the 2021–22 Fiscal Year are $15.8 billion, the highest funding level since the account was established. This is a 53 percent increase in the revenue estimate that was used for Quarter 1 through 3 EPA payments. Based on this, the statewide EPA payment for the Fourth Quarter (Q4) apportionment will be $8 billion, which may result in a significant increase to a local educational agency’s (LEA) Q4 EPA payment. Similar to last year’s P-2, many LEAs will experience the following impacts:
1. The June 24, 2022 EPA Q4 payment will be large. 2. The June 30, 2022, Principal Apportionment payment may be negative or zero. County offices of education should keep in mind that a county that is overpaid as a whole will not receive a 2021–22 P-2 deposit and 2022–23 Advance Principal Apportionment payments at the county level will be offset by the State Controller’s Office until overpaid Principal Apportionment funds are recovered. The CDE will post to our website payment information for both the Principal Apportionment and EPA on June 17, 2022. Secondly, the significant increase in EPA revenue resulted in the need to adjust the EPA calculations, which have operated since the inception of LCFF. In order to fully apportion the total amount of 2021–22 EPA revenues to LEAs, revenue limit rates for school districts and charters were adjusted by the statutory COLA rates from 2013–14 through 2021–22 for the Q4 2021-22 EPA calculations. This adjustment will not be applied to the revenue limit rates used for any purpose other than the EPA entitlement calculation. For EPA, the 2012–13 revenue limit rates for school districts and charter schools will continue to be adjusted by the statutory COLA in 2022–23 and future years. As a reminder, EPA entitlements are an offset to LCFF state aid and, therefore, this increase in EPA funding and adjustment to the EPA calculation will not impact the determination of an LEA’s entitlement under LCFF. If you have any questions, please contact me at edearstyne@cde.ca.gov<mailto:edearstyne@cde.ca.gov> or Kiyomi Meeker, Administrator, Principal Apportionment Policy Office, at kmeeker@cde.ca.gov<mailto:kmeeker@cde.ca.gov>. Elizabeth Dearstyne (she/her) Director, School Fiscal Services Division California Department of Education 1430 N Street, Ste. 3800 Sacramento, CA 95814
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