FHDA Budget Update to Board of Trustees - Aug. 3, 2009
Please click here to view the PowerPoint presentation to the Board of Trustees.Date: August 3, 2009
Board of Trustees Agenda Item
From: Vice Chancellor, Andy Dunn
We have been tracking very closely the evolution of the state’s proposed budget solution and how the state plans to close its budget gap. This update reflects projections prepared by both the State Chancellor’s Office and the Community College League and is based on information the district has received and analyzed as of July 17, 2009.
On Friday July 24, 2009, both houses of the legislature completed their work on the budget package and forwarded it to the governor. Of the $24 billion in identified solutions there are approximately $15 billion in spending cuts. The balance of budgetary solutions include $4 billion in revenue accelerations and fees; $2.7 billion in funding shifts and deferrals; $2.1 billion in new borrowing; and a reserve of approximately $900 million. This reserve amount, reduced form $4.5 billion and coupled with other one-time solutions allowed the state to avoid some of the more severe cuts previously outlined including the elimination of all new Cal Grant awards, the elimination of the CalWORKs program, and deeper cuts to health and human services programs and state parks.
No action was taken to suspend Proposition 98; instead approximately $1.6 billion in 2008-09 K-12 categorical funding that had not yet cleared the Controller’s Office was eliminated, negating the need for suspension. A Prop 98 maintenance factor, addressing two years of below threshold funding, was included in the group of bills making up this budget package. Community college leadership was not consulted in the language of the bill and it remains unclear at this juncture why the community colleges are slated to only receive 8% of these funds rather than the 11% that represents the community college proportional share. Further, bill language specifies an allocation of funds between career technical education (CTE) and general purpose allocations. Funding, however, will not be distributed under the language until 2012-13, allowing time to seek relief if necessary.
On July 28, 2009 the governor signed this budget solution into law. We anticipate further details from the State Chancellor’s office addressing key issues including greater detail on the cuts to specific categorical programs, the language related to workload reductions and categorical funding flexibility.
Statewide budget workshops are planned for the week of August 17 which should allow us to prepare a budget document for the public hearing currently scheduled for August 31 based on the latest information available.