Greetings!
I hope you had a great Thanksgiving holiday. If you're like me, you ate too much turkey and candied yams. But, you also took the time to reflect on all that there is to be grateful for in life. I am grateful for my family and friends and to work at SBCCD. We are very fortunate to be a part of this life-changing organization. We are facing some tough challenges but we are strong, and we are smart, and we will continue to provide the opportunities for success that our students depend upon.
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 Special Budget Update |
The Problem
Let's begin with the big numbers. The state budget deficit for next year is curretly projected to be $25.4 billion of which $6 billion is from the current fiscal year ending June 30, 2011. About $20 billion of this is a "structural deficit" which means that state expenditures exceed income by that amount on a continuous basis until at least 2016 (according to the legislative analyst).
Incoming governor, Jerry Brown has been heard to say that the budget is as sick as he feared, and that the cure will be extremely painful.
$20 Billion in Perspective
The $20 billion structural deficit, when put into perspective, is very significant. According to the L.A. Times "if you could fire all of the state workers paid out of the general fund -- except for university employees, who are not under the governor's control -- you'd only save 9.2 billion. Eliminating all funding for the University of California and Cal State University and you'd only save $5.4 billion. Close down all of the state prisons and you'd gain $9 billion." We are talking about a lot of money!
What about the Community Colleges?
As reported by the Community College League, the minimum funding guarantee for Proposition 98 is scheduled to drop by $2.2 billion next year. As you know, Proposition 98 is the legal minimum funding mechanism for education, K-14. Based on this information, there is a potential drop in funding for the community colleges of $255 million. In addition to the possible funding reduction, the state has already spent $129 million out of next year's budget to fund this year's expenditures.
What does this mean to SBCCD?
If the California Community College system is reduced by $255 million, our share is around $2.5 million, about 3% of our unrestricted general fund.
What are we doing now?
This week, Chancellor's Cabinet implemented a selective hiring freeze. This means that most positions paid for from the unrestricted general fund will not be filled until we learn about the governor's budget early next year. Most positions funded by grants will be approved and a limited number of general fund positions, mostly related to health and safety or other important initiatives will be approved.
This decision was based on the desire to maintain the largest base of flexible dollars possible from which we could absorb budget reductions and limit the number of vulnerable "new" employees subject to potential layoff.
What's next?
The next milestone is the release of the Governor's Executive Budget. This budget will cover the rest of 2010-2011 through June 30th, and all of 2011-2012. The budget is scheduled for release on January 10, 2011. The Chancellor's Cabinet has scheduled a day long budget retreat on January 17th to analyze the Governor's Budget and determine next steps and to engage the collegial consultation process.
Closing Comments
As we move into the holiday season and the new year, let's stay hopeful that the budget scenarios we face do not come to fruition. Let's be hopeful that in January, the Governor will release a budget that recognizes the importance of education to the future of California and its citizens.
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