At 10 a.m. today, Governor Brown released his May Revision to the January budget, with increased emphasis on the three pillars of education by investing in access, success, and equity while recognizing our colleges’ growing operational costs.
As the Governor states, “Health and education, that’s the focus.”
The May Revision provides $619 million in new Proposition 98 allocations to community colleges. It reflects a strong immediate economic outlook with the recent surge of $6.7 billion in state revenues derived primarily from high wage earners and capital gains.
In spite of these increases, community colleges are still regaining ground lost during the recession. As the Public Policy Institute of California has noted, “Between 2007–08 and 2011–12, the community colleges faced cuts totaling almost $1.5 billion, far larger than in any other period.” Colleges have lost 18 percent of their purchasing power since 2008 while operating costs have risen faster than state budget appropriations and local property taxes. We must be prepared for the almost doubling of employer contributions for CalPERS/CalSTRS by 2021 (estimated to cost almost $400 million) and the lack of capital outlay support. For a link to the mandated increase in CalSTRS contributions, click here.
Despite the surge in revenues, the Governor remains fiscally prudent and is quick to point out that the budget outlook in future years is far from optimistic. For instance, 2015-16 budget year will be the last full year of revenues from Proposition 30, with the sales tax portion expiring at the end of 2016.
In conversations I have had these past months, trustees and chancellors/presidents statewide are cognizant of the fiscal challenges ahead and agree on the need for flexibility to address operational costs.
Please keep in mind that the May Revision is the Governor’s proposal, and the Legislature is still tasked to present their version of an approved budget to the Governor by June 15th.
Good Budget News for California’s Community Colleges
Governor Brown’s proposed 2015-16 budget is the best in recent years for our system. He made substantial investments in student success, equity and access while respecting our colleges’ need to make appropriate decisions for the uniqueness of districts. It is clear that Governor Brown identifies with our mission while also understanding the growing costs facing our districts. The budget bills containing the Governor’s proposals are AB 103 (Weber) and SB 69 (Leno).
Its important to note that, while this is a good budget year for community colleges, there are a number of fiscal challenges colleges will face in the next several years. They include a sharp increase in employer contributions to CalPERS/CalSTRS, the sunset of Proposition 30 revenues, lack of state support for facilities and the absence of either a property tax or general –shortfall backfill. Both the Community College Chancellor’s Office and the Department of Finance have encouraged community colleges to spend their budget augmentations wisely and prudently, given these considerations.
For an extended analysis of the budget proposal, click here.
Governor Brown's Budget Augmentation Proposal – Line Items