Budget Information

Budget Information

Legislature Approves 2012-13 State Budget - June 27, 2012

 

 

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Both houses of the Legislature are working through twenty-one budget-related bills that codifies the deal reached between legislative Democrats and Governor Jerry Brown. While a few more bills still need to make it through the two houses, it is clear the votes are present for the most difficult issues.

For community colleges, the plan remains the same as we announced last Thursday, although there has been a small reduction in the amount of deferral buy-down that would happen if the tax measure passes. The full plan is described below.

I have little good to say about this spending plan. It is awful. It is unfathomable that school districts would be given authority to reduce the school year to 160 days (from the 180 days before 2010 and which is customary across the U.S.). Over two years, we have eliminated community redevelopment and, now, Healthy Families program for working class poor kids.

The choice will be clear for voters in November, although I can't say that I am confident that the tax measure will be approved. It will be an extraordinarily difficult year of planning for community college districts, faced with either 1% growth or 7.3% decline in funded enrollment, which will be decided on November 6.

Now that the budget is final, we will be providing scenarios and talking points so you can explain the challenges faced by the continued cuts to your district, as well as the benefit received for your college over the next several years by the tax measure.

Thank you for your advocacy through this very difficult year!

 

Current year (2011-2012)

  • Student Fee Revenue Shortfall: The budget does not backfill the estimated student fee revenue shortfall of $100 million in the current year.
  • Redevelopment: The budget reduces $116.1 million General Fund for assumed redevelopment revenues, but only with language that no more General Funds will be taken than are actually received by community colleges from redirected redevelopment property tax revenues. The "truing up" for moneys withheld in May is expected in July.

Budget year (2012-2013)

  • Overall: If the governor's tax measure passes, the plan provides $209 million for community colleges, including $159 million for deferral buy-down and $50 million for enrollment restoration/growth.
  • Redevelopment: The budget adopts 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 community 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 $209 million. Of the $209 million, $159 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 $209 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.

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


Budget Information
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Pippa Gibson
Phone: 408.864.8936
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Last Updated: 6/28/12