Campus Budget

Campus Budget

Budget Update: Final Agreement

Sorry all! Add 0.25% to each of my amounts for STRS. Too many numbers this morning.

.    Increases the employer contribution rate, currently at 8.25% of creditable compensation, over seven years beginning in FY 2014-15 as follows:

.                      a)  On July 1, 2014, by 0.63%;

.                      b)  On July 1, 2015, by 2.48%;

.                      c)  On July 1, 2016, by 4.33%;

.                      d)  On July 1, 2017, by 6.18%;

.                      e)  On July 1, 2018, by 8.03%;

.                      f)  On July 1, 2019, by 9.88%; and

.                      g)  On July 1, 2020, by 10.85%. 

 

 

 

 

Hi Dan, 

You indicate that the STRS rate will be 8.88% for 2014-15.  In the message that Scott sent out this morning, he indicated it would be 8.63% for 2014-15.  Will you please confirm that it will be 8.88%?  I want to clarify for my budget committee this afternoon since I send them both yours and Scott’s messages.

Thanks,

Ann-Marie

 

 

 

 

Dear Colleagues,

Yesterday, the Legislature passed the final version of the 2014-15 and sent it to the Governor’s desk.  The details of the budget did not change from the my report of the Conference Committee agreement (for reference, that message is included below).

I would like to draw your attention to a few additional notes on the agreement:

· The STRS employer rate for the 14-15 year will 8.88% (an increase of 0.63%).  From the 2015-16 through the 2019-20 fiscal years, the rate will grow by an additional 1.85%, annually. In 2020-21, it will further grow by 0.97%, resulting in an employer contribution rate of 19.1% at that time.  The details can be viewed in AB 1469.

· Trailer legislation includes legislative intent that funds provided for increased access “be expended for purposes of increasing the number of FTES in courses or programs that support the primary missions of the segment.” The Chancellor’s Office will also be required to annually report on the number of course sections and FTES that were added in the previous year that are “within the  primary missions of the segment.”  Clearly, there is significant interest from the Legislature in how the system grows, not just in how much it grows.  The details can be viewed in the Education Omnibus bill, SB 860.

Recapping some major details of the Budget Act:

· 2.75% for increased access

· 0.85% COLA

· $148M for maintenance and instructional equipment (includes district flexibility and removes the local match)

· $100M increase for the SSSP

· $70M for Student Equity Plans

· $50M increase for EWD

· $49.5M for earlier mandate reimbursement claims

· $37.5M for Proposition 39 energy efficiency projects and workforce development

· $30M increase for DSPS

· All but $94.6M of system deferrals will paid down

· A positive trigger allowing the Director of Finance to increase Proposition 98 funding if, in his determination, the Proposition 98 guarantee is higher than estimated at the time of the Budget Act.  The first call on additional expenditures will be to pay down the remaining deferrals.

· Language equalizing the funding rate for CDCP FTES to the same level as credit FTES, as of the 2015-16 fiscal year

·An increase in the Cal Grant B award to $1,648

Overall, we are very pleased to see the Governor and Legislature provide a budget so clearly supportive of access and success.  While the Budget Act does not regain ground for the lost purchasing power of the recessionary years, for the second consecutive year it does fund the annual COLA described in statute.  We are also pleased to see that districts are permitted flexibility as to how they choose to allocate their share of the $148M in Physical Plant/Instructional Equipment funding, and will not be required to meet a local match.  Also, the partial funding for prior mandate claims chips away at the state’s obligations to community college districts.  The planned increase in CDCP rates will more adequately fund this important work and help incentivize the provision of CTE instruction.

With 72 districts come 72 opinions (at least!) of what makes a good budget, but we believe this agreement continues the progress made in 2013-14 budget to restore access to higher education and to support efforts to improve student completion and success. 

 

Regards,

Dan Troy

Vice Chancellor, College Finance and Facilities Planning

California Community Colleges Chancellor’s Office

 

 

 

 

 

Dear Colleagues,

Earlier this evening, the joint Budget Conference Committee met and approved the major provisions of the 2014-15 budget for the California Community Colleges and other areas of the budget.

While subcommittees of both houses had previously voted to augment the CCCs by $246M by assuming the higher budget year revenue that has been estimated by the Legislative Analyst’s Office (my message from May 23rd described those increases), similar to last year, the Governor held fast to the level of spending proposed in the May Revision.  Ultimately, Governor Brown has prevailed.

A key adjustment made to K14 Proposition 98 spending is that it is will no longer be the case that deferrals will completely eliminated as of the 2014-15 fiscal year.  Some of this funding will be diverted within the minimum guarantee to fund legislative priorities such preschool/child care, another round of funding for the Career Pathways Trust competitive grant program ($250M, similar to the current year), and funding for prior mandate claims.

To that end, the Conference budget looks very similar to the Governor’s May Revision, with a few notable changes:

  • · Funding for Student Equity Plans will be reduced from $100M to $70M
  • · $30M augmentation for DSPS
  • · $49.5M for reimbursement of previous mandate claims
  • · A reduction of $94.465M in the paydown of deferrals
  • · Districts will have flexibility to determine the split of expenditures between maintenance and instructional equipment ($148M)
  • · Cal Grant B awards will increase to $1,648

Further, the final budget will include a positive trigger: If the Department of Finance determines as of the 2015 May Revision that the Proposition 98 guarantee is higher than what is estimated at the time of the budget agreement, additional expenditures will occur.  The first priority would be to paydown the remaining K14 deferrals ($94.465M for the CCCs). 

Otherwise, the provisions of the Conference agreement are very similar to the Governor’s May Revision (2.75% increased access, 0.85% COLA, $50M increase for EWD, etc.).  My message of May 13th covers the May Revision proposal in detail.

The current expectation is that the Conference budget will be voted on by each house over the weekend (probably Sunday), so the Legislature will meet the June 15th deadline.

Until the budget is final and signed by the Governor, changes are always possible.  Further, in some cases there can be changes made to the budget bill language or included in trailer bills that have affect us of which we may not yet be fully aware.  I will try to keep you updated as new information emerges.

 

Regards,

Dan Troy

Vice Chancellor, College Finance and Facilities Planning

California Community Colleges Chancellor’s Office

 

 

 

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Last Updated: 6/17/14