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2011-12 May Revise Webinar

AGENDA3:00pm – 3:30pm WEBINAR Presentation3:30pm – 4:00pm Q & A

PARTICIPANTS Scott Lay, President/CEO, The LeagueJack Scott, Chancellor, California Community CollegesErik Skinner, Exec. Vice Chancellor, California Community CollegesTheresa Tena, Director Fiscal Policy,The League

Dan Troy, Vice-Chancellor Fiscal Policy, California Community Colleges

2011-12 Budget Webinar

• The May Revise Proposal

• Proposals for Community Colleges

• Initial Response and Analysis

• Questions and Comments

Overview

• Economic recovery = $6.6 B increased tax revenues

• Even with revenue and $13.4B in solutions structural shortfall of $10B.

• Governor Brown’s continued call for a vote of the people - $9.4 of solutions

• “Wall of debt”

Updated Budget Deficit

• Budget Deficit in February $26.6 Cuts and Other Solutions -13.4

Higher Revenues -6.6

Higher Spending 2.0

Proposition 10 Litigation 1.0

Remaining Deficit 9.6

Build Reserve 1.2

• Solutions Needed $10.8

Wall of Debt

• Budgetary Borrowing $34.7B– Deferred payments to K-14, Economic Recovery Bonds,

Loans from Special Funds, Underfunding of P-98 etc.

• Authorized Unsold Bonds $48.2B

• Bonds Sold and Owed $81.1B

Out-year Structural Shortfall

Proposition 98

• Increased revenue triggers an increase in Proposition 98 guarantee

• CY Prop 98 Increase

– K-12 $72M

– CCC $57M

– Total $129M

• BY Prop 98 Increase

– K-12 $2.653B

– CCC $ 340M

– Total $2.992B

Proposition 98

• Proposition 98 and the “Wall of Debt”– New Proposition 98 funds should be used

to erase all of the deferrals and pay off owed mandate claims.

• Deferral Buyback is “invisible” will not buy more course sections or rehire faculty/staff

• Not NEW money - funding to remain “flat” overall

CCC May Revise Proposal

• 11% of Proposition 98 to CCC

• $350 million "buy-down" of the $961 million inter-year deferral to $611 million (no programmatic effect)

• adjustments for changes in local property tax collections; $57M CY and $75M CY offsets lower student fee collections in the CY.

What is NOT in MR for CCC

• No additional cuts

• No policy reforms

• Await the recommendations of Board of Governors Student Success Task Force

Community College Budget

• Where do things now stand?• Likely range of impacts to CCC

• Scenario #A• Roughly a $290 million impact net of

enrollment fees. (~5% reduction).• Included in budget bill held by Legislature

Community College Budget

• Scenario #B• Roughly a $490M net reduction (~10%

reduction)• Assumes tax package does not pass.

Pressure Points

• Proposition 25 – “June 15” deadline• State will run out of cash• Election (when?) vs. Legislative Vote• Redistricting Commission

Questions and Comments

Please submit your

questions online.