Budget Deal Announced / Vote Tuesday - June 21, 2012
Today, Democratic leaders in the Legislature and the governor announced a budget deal that will ensure the state has a spending plan before the beginning of the 2012-13 fiscal year. The plan is expected to be considered on Tuesday.
For community colleges, the plan is modestly different from what we have described over the last week, as the budget will provide $50 million for enrollment restoration/growth. In summary, the budget is expected to have the following major provisions affecting community colleges.
Current year (2011-2012)
Budget year (2012-2013)
Overall: If the governor's tax measure passes, the plan provides $213 million for community colleges, including $163 million for deferral buydown and $50 million for enrollment restoration/growth.
- Redevelopment: The budget adoptes the governor's reduction of $341 million General Fund for assumed redevelopment revenues ($140.5 million tax increment, $200.5 million liquid assets), but with language that no more General Funds will be taken than are actually received by communtiy colleges from redirected redevelopment property tax revenues.
- Apportionment flexibility: The budget rejects language to repeal the SB 361 per-student funding formula.
- Categorical flexibility: The budget rejects language to provide increased flexibility among categorical programs.
- Mandates: The budget adopts a compromise mandates block grant, under which districts could choose to either 1) receive $28/FTES and opt out of claims going forward or 2) use the existing claims process. This addresses only new claims beginning July 1, 2012 and does not address the accrued backlog of reimbursements owed community colleges.
Cal Grants: The budget rejects the proposal to increase GPA requirements for Cal Grants, but accepted the governor's proposal to repeal the recent Student Aid Commission decision to allow community college transfer entitlements to students who don't transfer immediately from a community college to a four-year institution.
The Bottom Line
If the November tax measure passes, the community college budget increases $213 million. Of the $213 million, $163 million would be used to buy down deferrals and $50 million would be available for enrollment restoration/growth.
- If the November tax measure fails, the community college budget will be cut the $213 million added, plus an additional $338 million workload reduction cut, for a total of a $551 million trigger cut.
- Under both scenarios, a large amount of cash will be deferred from July-November until later in the year as the state manages a significant cash flow problem. In 2011-12, community colleges received $1.7 billion from July through January. In 2012-13, community colleges will receive either $1.0 or $1.1 billion in the same time frame, depending respectively on whether the tax measure does not pass or does pass.
Additionally, some of our districts have been closely following an action by the Legislature to "grab" redevelopment pass-through funds for $250 million in budget solutions. This was rejected in the final package.
There are significant changes to health and human services in the budget. We believe that the CalWORKs changes will be less harmful to community college students than originally proposed, although deeper child care rate cuts will hurt community college child development centers.
We still have not seen the education "trailer bill," which will provide the legal language associated with many of these items. When it becomes publicly available, we will review it carefully and let you know of any changes.
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