2018 2018-19 Governor’s 19 Governor’s Budget Proposal Budget Proposal State Center Community College District State Center Community College District Board of Trustees Meeting Board of Trustees Meeting February 6, 2018 February 6, 2018
Governor’s Priorities Governor’s Priorities Building Reserves Building Reserves Minimize Costs to Students Minimize Costs to Students Promote New Technology & Promote New Technology & Innovation Innovation Improve Completion Rates Improve Completion Rates Align with State Chancellor’s Vision Align with State Chancellor’s Vision for Success Goals for Success Goals 2
Governor’s Concerns Governor’s Concerns Future California Economic Future California Economic Recession Recession Uncertainty of Federal Funds Uncertainty of Federal Funds Federal Tax Reform & Impact Federal Tax Reform & Impact not Included in Budget not Included in Budget Proposal Proposal 3
Governor’s Governor’s Proposed Proposed 2018 2018-19 State 19 State Budget Budget
On On-Going Funding Going Funding 2017-18 2018-19 State Adopted CCC System Gov's Jan Budget Budget Request Proposal Growth Funds $57.8m or 1% - $60m or 1% COLA $102.0m or 1.56% - $161.2m or 2.51% Base Funding $183.6m - - General Operating Expenses - $200m - New Student Centered Funding Formula - - $175m Full-Time Faculty - $75m none Part-Time Faculty - $25m none College Promise - $25m $46m Online Education - TBD $20m 5
New Student Centered New Student Centered Funding Formula Funding Formula 50% 50% Base Funding (Based on Enrollments) Base Funding 25% 25% Support Low Support Low Income Students Income Students – District 25% 25% supplemental grants for low income students with waivers and Pell Grants 50% 50% 25% 25% Reward Progress Reward Progress 25% 25% (1) Number of certificates and degrees awarded; (2) Number of students who complete a degree or certificate in 3 years or less; and (3) Each Associates Degree for transfer Base Funding Support Low Income Students HOLD HOLD HARMLESS PROVISION (1 year) HARMLESS PROVISION (1 year) Reward Progress 6
Online Education Online Education $20m $20m On On-Going Funds Going Funds $100m $100m One One-Time Funds Time Funds Fully online CA Community College to address underserved working students. Targeting 25 -34 year olds with no degree 7
One One-Time Funding Time Funding 2017-18 2018-19 State Adopted CCC System Gov's Jan Budget Budget Request Proposal Online Education - TBD $100m Scheduled Maintenance/ $76.8 (no match) - $275.2m Instructional Equipment Prop 39 (Energy Efficiency) $46.5m - - Equal Employment Opportunity $3.4m $5m - Innovation Awards $20m - $20m 8
Categorical Funding Categorical Funding 2018-19 State Adopted CCC System Gov's Jan Budget Budget Request Proposal Guided Pathways $150m - - SSSP, Equity, Workforce - - - AEBG - - $20.5m (2.51% COLA) AEBG (Data Collection) - - $5.0m EOPS, DSPS, CalWorks & Child Care Tax Bailout - - $7.3m (2.51% COLA) 9
Capital Projects Capital Projects 2017-18 2018-19 CCC System Gov's Jan State Adopted Budget Request Budget Proposal Prop 51 Bonds 15 Projects Approved 5 Projects Approved Redwoods CCD Arts Bldg. Replacement Coast CCD Language Arts Complex Mt. San Antonio New PE Complex Peralta CCD (2) Learning Resource Center & Child Dev. Center 10
Future Future Considerations Considerations
Recession Looming in the Future Recession Looming in the Future Balanced Budgets Have been Quickly Balanced Budgets Have been Quickly Followed by Huge Deficits Followed by Huge Deficits $20 $10 Dollars in Billions $0 -$10 -$20 -$30 -$40 -$50 Source: Governor's Budget Summary, Page 2 12
Rising STRS & PERS Rates Rising STRS & PERS Rates Projected pension rates by plan STRS PERS 30.0% 27.3% 26.8% 26.1% 25.2% 23.8% 25.0% 20.8% 18.1% 20.0% Employer rate 20.25% 20.25% 20.25% 20.1% 15.531% 19.1% 18.13% 13.888% 15.0% 16.28% 11.442% 11.771% 11.847% 14.43% 12.58% 10.0% 10.73% 8.88% 8.25% 5.0% 0.0% 2013-14 2014-15 2015-16 2016-17 2017-18 Proposed Proposed Proposed Proposed Proposed Proposed Proposed 18-19 19-20 20-21 21-22 22-23 23-24 24-25
Rising STRS & PERS Costs Rising STRS & PERS Costs Fiscal Year Fiscal Year STRS STRS PERS PERS Total Annual Total Annual Total Annual Total Annual Increase* Increase* Increase* Increase* Increase* Increase* Cumulative* Cumulative* Proposed 2014 Proposed 2014-15 15 734,779 23,956 758,736 758,736 758,736 Proposed 2015 Proposed 2015-16 16 1,441,751 181,646 1,623,397 1,623,397 2,382,133 Proposed 2016 Proposed 2016-17 17 1,385,834 721,897 2,107,731 2,107,731 4,489,864 Proposed 2017 Proposed 2017-18 18 1,363,637 528,870 1,892,507 1,892,507 6,382,370 Proposed 2018-19 Proposed 2018 19 1,390,049 816,843 2,206,892 2,206,892 8,589,262 Proposed 2019 Proposed 2019-20 20 1,416,854 872,412 2,289,265 2,289,265 10,878,527 Proposed 2020 Proposed 2020-21 21 817,908 981,127 1,799,035 1,799,035 12,677,562 Proposed 2021 Proposed 2021-22 22 854,548 505,568 1,360,117 1,360,117 14,037,679 Proposed 2022 Proposed 2022-23 23 253,323 358,859 612,181 612,181 14,649,861 Proposed 2023-24 Proposed 2023 24 146,981 302,195 449,177 449,177 15,099,037 Proposed 2024 Proposed 2024-25 25 148,451 243,732 392,183 392,183 15,491,221 *Amounts only include Fund 11 (General Fund) 14
Summary Summary ▪ Early in the Budget Process ▪ New Initiatives with Details to be Worked out ▪ Uncertainty ▫ New Funding Formula ▫ Economy ▫ Federal Funding ▫ Federal Tax Reform Impact 15
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