Budget Information

Budget Information

CCC Chancellor Jack Scott RE: Federal Economic Stimulus Funding

To: Chief Executive Officers, Board of Trustees, Chief Business Officers
From: Jack Scott, Chancellor, California Community Colleges
Subject: Federal Economic Stimulus funding
Date: March 18, 2009

I apologize for the length of this memo, but I believe its importance and complexity justifies its length.

This memo provides information about the recently enacted federal economic stimulus package, known as the American Recovery and Reinvestment Act (ARRA), and potential opportunities for the California Community Colleges.  As you are probably aware, there are several pots of stimulus funding available for community colleges to pursue, either at the systemwide level or at the local district or college levels.  You should note that all federal stimulus funding is temporary and generally available for the next two years.

Overall, California is estimated to receive $31 billion in state aid during the current and next two fiscal years.  Of this amount, K-12 and higher education are expected to receive $7.9 billion in a variety of areas, such as grants, subsidized bonds, tax credits, and subsidies to individuals, colleges, and local educational agencies.  In addition, the state is expected to receive $6 billion to fund various labor and workforce development activities, of which the community colleges are in a strong position to secure a portion of these funds.

The Chancellor’s Office has been working to identify funding opportunities in the federal package that are available to benefit the community colleges. We are engaged in ongoing conversations with key participants including the Governor’s Office, the Legislature, the Legislative Analysts’ Office, the Department of Finance, the Department of Education, and federal representatives. The timeframe for state leaders to make allocation decisions for most of the funding opportunities included in the stimulus package will be the next few months. Legislative leaders have scheduled overview hearings on the federal stimulus package and plan to have the related funding options discussed during the spring budget process. Some funding opportunities may proceed on a faster time frame; we will make every effort to alert you to any changes in the timing of funding allocations. The following bullets summarize the various federal stimulus program funds most likely to yield financial opportunities to the California Community Colleges. In the coming days and weeks, we will continue to investigate details related to these and other funding streams included in the federal stimulus package. The Chancellor’s Office will provide new information as it becomes available.

1.      State Fiscal Stabilization Fund ($6 billion).   The federal stimulus package provides California with this funding allocation based on the state’s school age and total population. These funds are divided into two separate pots:

  • $4.9 billion for K-12 and higher education. These funds must first be used to mitigate state funding cuts for K-12 and higher education in fiscal years 2009-10, 2010-11, and 2011-12. Funding in excess of the amount needed to meet this first purpose would be allocated to K-12 schools serving high poverty populations. It is likely that all $4.9 billion will be used for the purpose of mitigating funding reductions. However, given that funding for the California Community Colleges increased in the 2009-10 state budget, while funding for K-12 schools, UC, and CSU all declined, it is unlikely that the community colleges will receive funding under this section of the federal stimulus package.
  • $1.1 billion for “public safety and other governmental services.” The state has considerable flexibility in the use of these funds. Included in the permissible uses of the funds are the construction, modernization, renovation, and repair of education facilities. However, given that the state continues to wrestle with significant funding shortfalls, it is likely that all $1.1 billion would be used elsewhere to offset other state General Fund costs.
  • As noted above, the likelihood of the community colleges being able to access State Fiscal Stabilization Fund monies appears unlikely at this time. However, the Chancellor’s Office will remain engaged in budget deliberations surrounding these funds in the event that an opportunity arises. To this end, we have provided the Governor’s Office and legislative leaders with a proposal seeking funding for up to $678 million in “shovel-ready” renovation and repair projects at colleges around the state. These projects would result in immediate job creation while also extending the life of buildings and improving energy efficiency.

2.      Workforce Investment Act (WIA) ($494 million). The federal stimulus package provides an  additional $494 million in WIA funds for California.  These new funds are intended to serve youth, adults and dislocated workers.  The funds are allocated in three main streams: Eighty-five percent WIA funding Allocation.  Based on a statutory formula, $427 million, or 85 percent, is allocated to local WIBs to support local job training and workforce development efforts. The local WIBs determine the allocation of the $427 million based on the approved local workforce plans and agreed upon performance benchmarks.  Community college access to these funds is determined by the local WIBs. We understand that the funds may be available to the local WIBs as early as mid-April. Therefore, we strongly suggest that you make contact with your local WIBs as soon as possible to determine the process for distributing these new dollars and to position your college(s) to receive these funds.

  • The Chancellor’s Office is actively engaged in discussions with the WIBs at the state and local level to ensure that the boards regard the community colleges as their preferred training and education partners.  The colleges should also be working with their Career Technical Education Regional Consortia. These organizations will play a strong role in ensuring that the community colleges within the CTE regions are connected to the local WIBs.  The Chancellor’s Office is available to assist in helping facilitate relationships with the Regional Consortia, if needed.
  • Fifteen percent WIA Funding Allocation. The remaining $74 million, or 15 percent, is discretionary funding issued to the Governor for statewide initiatives and competitive grants for employment and training programs.  The Governor has already announced the establishment of a Green Jobs Initiative to be funded by a portion of these discretionary WIA funds.  The Chancellor’s Office is working closely with the Governor’s Office on this initiative. The State Department of Labor and Workforce Development will be responsible for issuing these resources on a competitive grant basis to institutions that address the following criteria:  1) focus on the development of public-private partnerships to help train and educate at-risk youth from 18 to 24 years of age; 2) increase job training opportunities; 3) expand educational attainment; 4) provide valuable work experience or exposure; and 5) incorporate community service.
  • Apart from formula funded WIA programs referenced above, state, local WIBs, and other providers and agencies are able to apply directly to the US Department of Labor for competitive grants in the following areas. The guidance for these competitive grants is expected to be released in the next few months:
  • $750 million nationwide for competitive grants for worker training in high growth and emerging industry sectors.  The early guidance from DOL indicates that $500 million is earmarked for job training in the areas of energy efficiency and renewable industries.  Any remaining funds will be prioritized to train workers for careers in allied health care fields.  This pot of funding holds significant potential for the state Chancellor’s office in collaboration with community colleges to submit competitive grants to the US Department of Labor.
  • $200 million nationwide for additional assistance for dislocated workers.  We are still awaiting guidance on the focus and priorities for issuing these grants.
  • $50 million nationwide for YouthBuild Activities that target high school drop-outs who re-enroll in an alternative school.  We are still awaiting guidance on the focus and priorities for issuing these grants.

The Chancellor’s Office will be working closely with the US Labor Secretary Hilda Solis to ensure that colleges receive an appropriate share of the Department’s competitive grant funding. The Chancellor’s Office will keep you apprised of any new information received about these grants.

3.      Other K-12 Programs. The federal economic stimulus package also expands funding for  11 targeted K-12 programs. While historically these programs have been geared to K-12 schools,  a few of them offer new or expanded opportunities for community colleges to gain additional funding through partnerships with K-12:

  • Enhancing Education Through Technology ($71 million).  These funds are intended to improve the use of technology in the classroom.  This funding will distributed through a competitive grant process administered by the U.S. Department of Education. These funds are expected to flow through the California Department of Education.
  • Student Longitudinal Data System Grants ($250 million).  These funds are intended to support the development of statewide student longitudinal data systems that include postsecondary education and workforce information.  The funds will be distributed by the Institute for Educational Sciences. The Chancellor’s Office is looking into opportunities to increase the system’s data collection capacity.
  • Child Care and Development Block Grants ($220).  These funds are intended to supplement state funding for child care for low-income families.  Of this amount, about $28 million must be used to improve the quality and availability of child care.  The ARRA requires that $10 million of this funding be used to improve the quality of infant and toddler care.  Community Colleges have historically played an important role in training childcare providers as a function of increasing quality care.  These funds will flow through the California Department of Education.

4.      Other Funding Opportunities. There are a number of new programs and grant opportunities within ARRA that are still being investigated by the Chancellor’s Office.  Many of the details of about how these funds will be distributed are not yet available.  The following highlights a few areas that we believe are worth exploring on behalf of the California Community Colleges.

  • $200 million for Broadband Grants administered by US Department of Commerce.
  • $2.5 billion for Rural Broadband Grants and Loans administered by the US Department of Agriculture.
  • $5 billion for Low-Income Weatherization Assistance Program administered by the US Department of Energy.

In summary, there are many opportunities available for the California Community Colleges to pursue, especially with regard to new WIA funds at the local level, within the Governor’s Administration and through the US Department of Labor. In addition, more opportunities may emerge as the guidance is made available by the various US Departments, such as Education, Energy, Commerce, and Agriculture.  My office will keep you apprised of new and relevant information as it becomes available.

We will cooperate with all of you in obtaining as much funds as possible to obtain funding through the federal stimulus package.

Jack Scott, Chancellor
California Community Colleges
System Office
1102 Q Street, 4th Floor
Sacramento, CA 95811

Budget Information
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Pippa Gibson
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Last Updated: 3/19/09