Budget Information

Budget Information

Proposed Community College Budget - Oct. 6, 2010

October 6, 2010

Dear Colleagues,

While we have had a pretty good idea of the details of the community college budget for the last 48 hours, we have been frankly waiting to see if the budget deal would fall apart before we shared it. It now appears that the Legislature will convene and adopt a budget plan tomorrow, and the community college budget appears clear.

The good news

The budget provides several augmentations to the community college budget:

2.2% enrollment growth ($126 million)
$35 million to backfill categorical cuts imposed in 2010-11 (replacing the ARRA backfill)
$25 million for the Economic and Workforce Development program to "meet emerging workforce needs"
$20 million for Career Technology programs
no cost-of-living adjustment (positive or negative)

The bad news

$189 million of the budget "increase" is paid from a new deferral of $189 million from the 2010-11 fiscal year to the 2011-12 fiscal year, creating a total interyear deferral of $892 million
the budget is believed to rely on many overly optimistic assumptions that will likely require mid-year cuts, overseen by the new governor

The "Ugh, but perhaps necessary" news

The budget package will roll back many of the benefit enhancements to the California Public Employees Retirement System (CalPERS) for employees first hired into the system after November 10, 2010. For public school CalPERS employees (classified and administrators), the changes would:

restore the 2% at age 60 (up to 2.418% at 63) retirement calculation
calculate retirement compensation on the final three-year average of compensation (rather than single highest year)

The budget package does not address CalSTRS, although the actuarial problem for the program for most community college academic employees is worse than CalPERS. Because any recognition of the problem and corresponding changes would create liabilities rather than savings for the state general fund, the enormous financing problem for the system is not addressed in the budget plan. We expect legislative consideration of CalSTRS in the next two years.


The budget relies on accounting gimmickry to maintain access to community colleges and expand programs that are putting Californians back to work. This will require districts to borrow more money from the private sector, which will lead to significant interest and fees. In the 2010-11 fiscal year, we already estimate that we could have offered 1,200 course sections for the $5 million in cash management costs necessary to keep the lights on and faculty and staff paid during the budget impasse and due to existing deferrals. We will spend more next year.

However, we have to appreciate the desire of the governor and Legislature to invest in higher education. Make no doubt about it--this is an awful budget. The budget will likely be reopened before the year is finished. Proposition 98, which protects K-12 and community colleges, also encourages the accounting gimmickry, as the state will get credit next year for an "increase" in the budget that local colleges are asked to pay for this year.

The League believes strongly that it's time for a majority vote budget, which is why we are supporting Proposition 25 on the November 2 ballot. We encourage you to <http://www.voterguide.sos.ca.gov/propositions/25/>learn more about Proposition 25.

This will be another austere year on our campuses. The growth funds, even if colleges are willing to borrow money and trust that it will actually materialize next year, only partially restore the workload reduction imposed in the 2009-10 fiscal year.

I'm glad I'm not in Sacramento, as I should hold my tongue on this budget. I just left Long Beach, where 90 community college leaders--faculty, staff, students, administrators and trustees--talked about what we all can do to improve student success even in these difficult budget times. Now I'm at the Strengthening Student Success conference, where the conversation continues with the RP Group, the Academic Senate and several organizations.

I know these times are tough. I know our hard-working faculty and staff are passing on compensation increases while facing a challenging economy. Nevertheless, I've never seen more interest in eliminating the achievement gap, closing the participation rate gap and ensuring more students leave our colleges with a meaningful completion that nobody can ever take away. Let's keep our eye on the prize, recognize that the budget could be a lot worse, and keep focusing on the trifecta of student access, success and equity.

Scott Lay
President and Chief Executive Officer
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

Last Updated: 10/7/10