"A Tough Budget for Tough Times"
Governor Brown released his budget yesterday with the goal of balancing a budget deficit totaling $25.4 billion over the current year ($8.2 billion) and next year ($17.2 billion). This deficit can grow by an additional $1.2 billion if the sale of state-owned real estate does not occur as planned.
The Governor's plan proposes $12.5 billion in spending reductions; $12 billion in revenue extensions and modifications and $1.9 billion in other solutions that will balance the budget and create a reserve of about $1 billion.
Spending reduction recommendations hit many sectors. Notably absent from reductions was the K-12 system, which the Governor said had taken its disproportionate share of reductions over recent years. Reductions were proposed for
- Medi-Cal ($1.7 billion)
- CalWORKS ($1.5 billion)
- Department of Developmental Services ($750 million)
- University of California ($500 million)
- California State University ($500 million)
- 10% reduction in take-home pay for state employees not currently included in collective bargaining agreements ($308 million)
- $200 million in other reductions to be achieved through reorganizations of governmental functions and other efficiency measures.
California Community Colleges Reduced
The California Community College system was reduced $400 million for "Apportionment Reductions and Reforms". Part of the reforms is the Governor's stated desire to reform "census accounting practices to provide better incentives for maximizing academic course sections available for students seeking vocational certificates and transfer to four-year colleges within the diminished level of funding."
The Governor goes on to say that he intends to work with the Board of Governors, Chancellor, and other stakeholders to "develop specific census date reforms and other changes to apportionment funding that result in equitably spreading reductions while rewarding colleges for ensuring necessary prerequisites to enrollment are met, assisting students in completing courses they enroll in, and prioritizing course offerings needed for transfer and vocational skills. This can be accomplished in a variety of ways, including adjusting funding rates for priority courses, developing base apportionment adjustment factors related to course completion rates and other strategies."
The bottom line however, is a system-wide reduction of $400 million or roughly 7%. Since SBCCD represents about 1.1% of the system total, our share of reductions may well be over $4 million. Other aspects of the budget include:
- No 2010-2011 mid-year budget cuts.
- A proposed fee increase of $10 per unit from $26 to $36.
- 1.9% enrollment growth funded by the fee increase.
- Additional funding deferrals of $129 million bringing community college deferrals to almost $1 billion. This would take payments owed to the colleges for January through May and defer them until October of the following year. This will require significant cash reserves or borrowing to maintain cash flow and make payments to staff and to vendors.
- No further cuts to student support categorical program and continued flexibility provisions.
The budget is based on the assumption that the voters will approve $12 billion in additional revenues which requires approval from the State Legislature to place it on the ballot for a vote.
What Does this All Mean?
We do not know exactly what this means right now. We can make some assumptions until more analysis is completed and more dialogue occurs.
- These reductions come on the heels of past reductions of about $3 million to our district.
- No mid-year cuts for 2010-2011.
- Our share of the reductions can be as high as $4 million.
- Fee increases of 38.5% will devastate our students and hinder their ability to afford an education.
Next Steps
- Vice Chancellor Ng, will be developing his analysis of the budget and will be attending a special workshop on Friday in Sacramento.
- On January 19th, Chancellor's Cabinet will hold an all-day budget retreat to develop alternative plans to deal with the budget reductions.
- With no mid-year cuts to this year's budget we will have some flexibility to utilize this year's growth funding and some vacant position savings to address the cuts for next year.
- After the retreat on the 19th, we will be making a budget presentation to the Board of Trustees at the special study session on January 27th. The subject of student success will also be discussed at this study session.
- Over the coming months, as the budget develops, we will engage the collegial consultation structure in discussions about the budget to develop further recommendations in anticipation of the 2011-2012 budget adoption.
- The continuation of full-time staff at existing salary levels is still a firm priority.
- We are still enrolling almost 1,800 full-time equivalent students above our funded base. It seems likely that practice must end and a lower enrollment target may be established.
All of this information is being shared very early in the process. There is much information still to be gathered and understood. I promise to keep you informed as we move forward.
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