LBCC Responds to Governor’s Budget Update
DATE: January 20, 2011
FROM: Ann-Marie Gabel,
Vice-President, Administrative Services
SUBJECT: Governor's Budget Update
Last week Governor Brown issued his proposed budget for the 2011-12 budget year. The proposed budget attempts to close a $25.4 billion State deficit covering both the 2010-11 and 2011-12 fiscal years by generating $12 billion in additional revenues (primarily through tax extensions), imposing $12.5 billion in expenditure reductions, and providing $1.9 billion in other solutions. As expected, this budget does not bode well for community colleges. The components relevant to community colleges entail:
· $400 million reduction – the proposal includes changing the census date and other apportionment reductions and reforms. This represents just under a 7% reduction to our current funding. For LBCC, this approximates a $7 million cut.
· $110 million in growth – this represents 1.9% and for LBCC could garner around $1.7 million in additional revenue.
· $10 increase in student fees – this would bring the student enrollment fee up to $36 per unit and would fund the 1.9% growth mentioned above.
· No COLA.
· No further change to categorical funding; however, it extends the categorical flexibility provisions through 2014-15.
· $129 million additional cash deferral – this brings the total cash deferrals up to $961 million. For LBCC, the additional deferral would be about $3.2 million, bringing our total cash deferrals up to $24 million. This is significant since it means that 27% of our funding is not received until the next fiscal year. Basically, for every $1 that the State owes us, we only receive $0.73 during the same year that we spend it.
· No mid-year cuts – this means that the 2.26% growth funding provided in the 2010-11 State budget remains. This is great news since LBCC will receive $2.2 million in growth revenue if we increase our FTES. You may recall that we did not budget for this growth revenue nor build growth into our course offerings. Therefore, we are in the process of determining where we can add additional Spring sections so that we will capture this growth funding. This unexpected revenue will help us reduce the necessary cuts for the 2011-12 fiscal year which are going to be vast.
The cuts proposed above are absolutely the best case scenario. Governor Brown’s proposed budget is predicated on the voters passing five year tax extensions in June. If the tax extensions are voted down in June, then we can expect cuts to community colleges totaling somewhere in the range of $600 - $900 million.
To put things into perspective, LBCC has already undergone over $12 million in cuts since 2008-09. We have countered these revenue reductions by reducing our expenditures over $9.8 million. Thus far, this tremendous undertaking has only been accomplished with the assistance of every employee at LBCC. I would like to thank you for what you have done so far during these very troubling times. I wish I could say that the troubling times have come to an end, but we are now faced with the challenge of having to reduce our expenditures by another $5-7 million, in the best case scenario. The worst case scenario means that we would need to make reductions totaling $14-16 million.
The Budget Advisory Committee will be analyzing our budget and making recommendations throughout the Spring semester. I encourage everyone to contact their BAC representative to learn additional information or provide input. It is going to take all of us working together, as a united team, to find ways to further reduce expenditures in order to balance our budget considering the additional loss in revenue. I know we will accomplish this very difficult and daunting task. I only ask and hope that we do it collectively without pitting ourselves against each other.
Vice-President, Administrative Services
Previous Updates can be found at: