K-12 schools and community colleges are becoming increasingly frustrated – and anxious – over the state’s failure to pay its bills.

The impasse over the state budget, now into its third month, has created a cash-flow crisis for the state, which in turn is passing it on  to school districts and health-care  agencies by stiffing them. The latest deferred payment, $2.5 billion for K-12 schools, was announced last month by state Treasurer Bill Lockyer,  Controller John Chiang, and Ana Matosantos,  director of the Department of Finance.

Like children of alcoholics, districts have become quite adept at adapting to reckless behavior, by grabbing at any cash at hand and borrowing to meet payroll.  But as usual, the most vulnerable districts and, at the college level, the poorest students – those eligible for Cal Grants — are facing the biggest burdens.

Districts have gone through this drill before; this is the fourth year that the state has put off payments due in June to the next fiscal year – a situation that is making auditors uneasy and can translate into higher risk when districts  go to outside markets for short-term borrowing, as many are doing now.

The saving grace may be low interest rates. But the deferrals are coming in a year when schools are operating on the edge, having already built their budgets assuming big budget cuts and are bracing possibly for more.

Districts that can’t find the cash to borrow internally, from reserves  or other accounts, have turned first to county treasurers and then, failing that, to private lines of credit, often jointly through the California School Boards Assn. or the Community College League of California. Rates on TRANs – Tax and Revenue Anticipation Notes – are running from 1.5 to 2 percent for school districts viewed as good risks to 5 to 6 percent for districts – currently about a dozen – that county offices of education have given a negative financial rating, meaning they are already in fiscal trouble this year.

A TRAN requires paying interest for a contract year, regardless of whether a district can repay it sooner. Depending on the size of the district, this can amount to tens or hundreds of thousands of dollars in unanticipated interest charges – adding injury to insult to besieged districts.

Community colleges estimate that deferred and delayed payments already have cost $5 million, between fees and interest, and that’s a conservative figure, according to Erik Skinner, vice chancellor of the system. Last year, the state cut $520 million – 8 percent from the community colleges budget – which led to a drop of 12 percent in first-time enrollment.  Gov. Schwarzenegger has requested to restore $126 million of that this year. But meanwhile, the state has missed payments of $116 million in July and $277 million in August.  If the state misses the next payment – $450 million toward the end of the month – community college officials say there will be substantial cuts in programming, on top of the current record student wait lists.

Recipients of Cal Grants have already felt the impact. The state has missed $260 million in Cal  Grant payments. UC and CSU schools have agreed to lend lower-income students the aid they’d have received, and community colleges have waived the fee portion of Cal Grant for now. But only a third of community colleges say they have the money to cover books, transportation and other costs, which comprise a greater expense than fees. If families can’t come up with the difference, some students will have to drop out.