Budget Update:
Post-Prop 30 Budget Landscape
Background:
Uncertainty surrounding Proposition 30 this fall made it hard to get a clear view of budget prospects through the rest of 2012-13 and into 2013-14, for the California Community College system in general and SRJC in particular. Last summer the California state Legislature passed a 2012-13 budget balanced on the assumption of new tax revenues coming from Prop 30's passage, which at that time seemed far from a sure thing. The event of Prop 30's defeat would have enacted automatic "trigger cuts" that the Legislature had built into the budget. These would have had a devastating impact on public education in California, coming on top of the massive cuts we've experienced since 2008. In response to this uncertainty, SRJC's administration budgeted cautiously for the 2012-13 year, in the expectation that Prop 30 would fail; essentially, the administration preemptively applied roughly half of the cuts that Prop 30's defeat would have triggered.
The state budget picture for California Community Colleges:
The excellent news of Prop 30's passage means that the budget picture, both on the state level and here at SRJC, is starting to come into sharper focus. Things are finally starting to look up, but Prop 30 is far from a cure-all, and the picture remains mixed. The Legislative Analyst's Office (LAO) foresees another $1.9 billion deficit for the State budget in 2013-14—that's the bad news—but notes that such a figure would represent the smallest deficit in the last 9 years—that counts, at this point, as the good news. Looking further out, and assuming that the national and state economies continue to recover, the LAO foresees the return of surpluses in California's annual budgets. Responding to this LAO report, Scott Lay, President of the Community College League of California, cautiously anticipates a long, slow process of rebuilding and restoring the damage done to Community Colleges since 2008. He notes that the LAO estimates $217–$343 million in new state funding coming to California Community Colleges over the next few years, but points out that those dollars are still not enough to fill all the pots that have been drained in recent years. Salary COLAs (cost-of-living adjustments), for example, which have been suspended for five years, will be competing with restoration of categorical cuts and increases in funding for additional FTES (full-time equivalent students), among other needs. (Link to Scott Lay's letter here.)
Where SRJC stands today:
Here at SRJC, we might expect that, having planned for the trigger cuts that were prevented by Prop 30's passage, we should be looking at substantial new revenues for Spring 2013. Such, however, is not the case. Why? First, with or without Prop 30, the District faces a roughly $6 million annual "structural" deficit, largely as a consequence of the accumulated cuts of the past years. Repairing this deficit at SRJC, as Scott Lay has suggested about the California Community College system as a whole, is likely to be the work of years. Second, while the passage of Prop 30 means that some districts in the state are receiving immediate resources that they are using to rebuild class offerings for Spring 2013, SRJC will not receive any of this money for this spring. Third, and most importantly, the dearth of classes for Spring 2013 is a consequence of the District's choice, in its wisdom, to take advantage of a budgeting provision known as "stability." Under stability, the District is allowed to keep 2012-13 enrollment at the original numbers set forth in its budget while still accepting funding based on a higher enrollment target set by the State. As noted above, in determining the 2012-13 class schedule, the District worked from the assumption that Prop 30 would fail and, as a result, aimed for an enrollment target of approximately 19,045. The higher enrollment number that the State had set for us—and that was used in determining our State apportionment for this year—was 19,216. (These figures are taken from Doug Roberts's November 13 PowerPoint presentation to the Board of Trustees.) Next year, however, enrollment must come up to state targets. Failure to do so will result in cuts in our apportionment from the State.
Looking ahead to 2013-14:
Currently, therefore, the District is projecting an increase in course offerings for 2013-14 of 7–10% FTES over the 2012-13 figure. Courses for Summer 2013 will be funded at more or less the same level as those for Summer 2012 (65–70 FTES, according to Mary Kay Rudolph, Vice President of Academic Affairs for the JC). As of now, the administration has in fact added a small handful of courses to the Spring 2013 schedule. It's unclear whether more may be forthcoming, but if so, it won't be many. For a more detailed survey of the SRJC budget, from the District's point of view, you may view a recording of SRJC Vice President for Business Administration Doug Roberts's Budget Forum, held last Tuesday, November 27; DVDs of the forum are available at both Mahoney and Doyle Libraries. To view Vice President Roberts's PowerPoint presentation to the Board of Trustees at its November 2012 meeting, click here.
Please note that at AFA's General Meeting on December 12 in Doyle 4245 with video conferencing to Petaluma Mahoney 726, Will Baty of AFA's BAT (Budget Analysis Team) Squad will be talking to the AFA Membership about the budget. We urge you to attend and avail yourself of Will's considerable expertise on budget facts and issues.