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Budget Update—September 10, 2010
Home > Government Relations > State Budget

A bit of good news and bad news to round out your week.

Yesterday, state Controller John Chiang released the August revenues and expenditures for the state. Tax revenues are up $173 million above projections (1.5%), while expenditures are $1.2 billion below projections. This has enabled the postponement of IOUs that previously were expected in the next couple of weeks. Of course, the main reason expenditures are way below projected is that the state hasn't been paying community colleges since July ($343 million), and payments to K-12 schools and counties ceased last month. In other words, as soon as there is a budget, expenditures are expected to be at or above the amount projected. Nevertheless, the report is good news, as it looks like the hemorrhage of state revenues does seem to have stopped, and revenues have stabilized, even if there are few signs of any economic growth in the report.

The bad news, of course, is that the postponement of IOUs will also relieve pressure on legislators to reach a budget deal, on which neither side is particularly interested in finding common ground. Meanwhile, the governor is in Asia on a trade mission, leaving Lt. Governor Abel Maldonado in charge. Interestingly, Maldonado was the person who was most given credit (with praise and criticism) for putting to gether last year's budget deal. Don't expect Maldonado to be calling any Big 5 meetings of legislative leaders.

Our survey of district CBOs is not yet complete, but we are finding that most districts are prepared to make it through October without a budget, but there are a few that are precariously close to running out of cash and will need assistance in October. This is not a surprise, as nearly 15% of the annual state-determined (general fund and property taxes) budget for community colleges will be delayed once September 28 comes and goes.

There are serious discussions about interim appropriations authority to restore the money flow to community colleges, although don't expect any movement until we have colleges on the brink of closure. Neither the governor's office nor legislative leaders want to relieve the pressure to get a deal done. However, there are some signs of futility that may lead to the unprecedented interim appropriations authority as the budget is punted until after the election or even until the new governor is inaugurated in January.

While there is little we can do to effect the state budget at this time, League staff members are keeping their eyes on the prize of student success. The League's Commission on the Future report is currently in draft stage and is being reviewed and edited by the commission. Through a series of informational workshops for faculty, staff, administrative and trustee leaders through the next six weeks, the report will be finalized and published. Our Annual Convention sessions were finalized this week and should be on the website early next week. The convention, November 18-20 in Pasadena, is packed with workshops on getting through these difficult times, and is focused on student success.

It has been truly heartening having so many dialogs with faculty, staff, students, administrators and trustees about what we can do to improve student success and completion. While I have never been more disappointed with the political process in Sacramento, I have never been so excited about what we can do for our students.