Budget Information

Budget Information

May Revise - May 16, 2011

 

May 16, 2011

Dear Colleagues,

As expected, the governor released the scheduled revision to his January budget proposal this morning. I'm reading it over as I grab a cup of tea before a participatory governance presentation with Jane Patton at Napa Valley College.

The changes to the community college budget are:

  • $350 million "buy-down" of the $961 million interyear deferral to $611 million (no programmatic effect)
  • adjustments for changes in local property tax collections

In summary, the May Revise is good news for community colleges, although we likely want to consider whether buying down previous year deferrals is smart when we're slashing enrollment funding.

If only the "new" deferral ($129 million from spring 2012 until July 2012) was bought out, we could reduce the net apportionment reduction from $290 million to $69 million. This would restore enrollment funding for nearly 48,400 full-time students and restore many faculty and staff jobs.

At a time when hundreds of thousands of students are looking to community colleges and as we send faculty and staff to the unemployment line, this would be smarter policy than to simply make the state's books look better.

Of course, the additional revenue that makes these options open is still contingent on a two-thirds vote of both houses to extend temporary taxes. If that fails, we're essentially back to the January budget amounts, assuming no suspension of Proposition 98.

However, the governor's revision provides a little bit of a glimpse at what might be necessary in an all-cuts budget:

Because Proposition 98 represents more than 40 percent of General Fund spending, K‐12 schools and community colleges would need to bear a heavy share of any “all cuts” budget. An “all cuts” budget would require a suspension of the Proposition 98 minimum guarantee and deep reductions. To remain in balance in future years, the minimum guarantee would likely need to be suspended in subsequent years. Such an approach would drive future maintenance factor payment requirements—already at $10 billion—significantly higher.

A $5 billion reduction to Proposition 98 funding is equivalent to eliminating 4 weeks of the K‐12 school year and 52,000 community college courses. Alternatively, it equates to laying off 51,000 teachers, raising K‐12 class sizes from an average of 25 students to 30 students, and raising community college fees from $36 to $125 per unit. In whatever way such reductions were implemented, such a funding drop would require a major downsizing of the state’s education system.

May Revision (p. 12)

Long story short...we have a bit more breathing room, but an all-cuts budget is still possible and the ramifications for community colleges could be significant.

Sincerely,

Scott Lay
President and Chief Executive Officer, The League
Orange Coast College '94




Community College League of California
2017 O Street, Sacramento, California 95811
916.444.8641 . www.ccleague.org
 


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Last Updated: 5/16/11