State Issues - March 9, 2010

Governor Schwarzenegger presented his 2010-11 state budget in January, and in light of the statewide financial context ($20 billion budget deficit), it contains good news for community colleges.

The proposed budget:

• Provides $126 million to fund enrollment growth of 2.21 percent.  This would enable about 26,000 new full-time students to enroll in community colleges throughout California.
• Reduces funding for apportionments and select categorical programs by $22.9 million to account for a negative cost-of-living adjustment (COLA), computed at -0.38 percent.  The negative amount is due to declines in labor and fuel costs used in the statutory formula to calculate the COLA for K-12 and community colleges.
• Cuts $10 million from Extended Opportunity Programs and Services (EOPS).
• Cuts $10 million from Part-time Faculty Compensation.
• Increases Career-Technical Education by $20 million.
• Maintains all categorical cuts and flexibility allowances approved in 2009-10, and does not backfill the $35 million in federal funds provided in 2009-10 to ease the cuts.
• Proposes student fees be maintained at $26/unit.
• Makes technical changes to accommodate and backfill reduced property taxes and other budget year revenue shortfalls and acknowledges, but does not backfill, student fee revenue shortfall of $10 million in the current year.
• Proposes the suspension of the competitive Cal Grant program, with no new awards provided beginning in fall 2010.

 According to California Community Colleges Chancellor Jack Scott, the proposed budget "is as favorable as we could have hoped" given the state’s ongoing fiscal issues.

• It would protect colleges from the effects of declining property tax revenues.
• It also provides important enrollment growth funding to help colleges serve students.
• Most importantly, it does not propose additional budget cuts after the $800 million in cuts we experienced in 2009-10.

In February, the Legislative Analyst's Office released its evaluation of the Governor's proposed budget (The 2010-11 Budget: Higher Education).  The LAO report offered a number of suggestions, including:

• Raising student enrollment fees to $40 per unit beginning in fall 2010, which would provide approximately $150 million in new revenue
• Eliminating the $126 million for student enrollment growth that would come from the state’s general fund, and instead allocate that money through increased student fee revenue
• Eliminating the proposed "negative" COLA, using the additional fee revenue
• Rejecting the suspension of the competitive Cal Grant program

While the idea of raising student fees and using that added revenue to fund enrollment growth may sound appealing, it should be noted that the $40 rate would represent a doubling of student fees in 18 months.

In response to the state's budget situation, the college's Board of Trustees passed a resolution stating its intent to advocate for a balanced approach to resolve the fiscal issues that hamper the effective delivery of community college education.