Board Highlights: Budget Update - Jan. 12, 2012
Vice Chancellor Kevin McElroy presented an overview of Gov. Jerry Brown's 2012-13 budget proposal and reviewed the ongoing budget picture for Foothill-De Anza. He reported that mid-year "trigger" cuts the governor recently enacted in response to lower-than-expected state revenues are expected to leave the district with a $10.4 million budget deficit in the current year, or a $9.7 million deficit if a workload reduction is implemented.
Passage of the governor's proposed tax initiative in November would have a major impact on community college funding for 2012-13, he said. But even if voters approve the tax package, the district's budget deficit for 2012-13 is projected to reach $11.3 million due to rising expenses. If the tax initiative fails, another round of mid-year trigger cuts for 2012-13 would leave Foothill-De Anza with a projected deficit of $16 million.
A number of variables could alter the deficit projections, such as whether property-tax and student-fee revenues are lower than expected; whether non-resident attendance holds steady; and whether enrollment grows or declines. At this point, Vice Chancellor McElroy said, it may be worth allowing a drop in productivity and offering more classes to gain enrollment because loss of enrollment funding permanently reduces the district's base funding.
The district's stability fund for 2011-12 is expected to dwindle to $4.5 million by the end of the fiscal year. These remaining funds, when combined with $4 million in stability funds set aside for use in 2012-13 plus a projected carryover balance of $8.5 million from the colleges and Central Services, would give the district about $17 million to close the 2012-13 budget deficit, he said.
Both campuses and Central Services will bring proposals to the board next month that are designed to achieve a total of $10.4 million in budget savings. A portion of the reductions will be implemented in June 2012. Additional reductions will depend on the governor's final budget and the size of the district's operating deficit and would be implemented no later than the end of the 2012-13 fiscal year.
Concerned about a drop-off in enrollment, Trustee Betsy Bechtel suggested the district address a perception among community residents that there is no opportunity to take classes for personal enrichment because the focus is now on transfer and vocational training. Vice Chancellor McElroy noted that enrollment may continue to drop off when the state enacts higher student fees. He said the increase in the student fees do not come back as increases to the colleges, a fact that Foothill Student Trustee Stephanie McGee suggested is worthy of student protest.
De Anza President Brian Murphy spoke about the difficulty to trying to maintain enrollment while state funding cuts are forcing reductions in course section and student support services.
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