State Budget Update & Governor’s 2012-2013 Budget

STATE BUDGET UPDATE &

GOVERNOR’S 2012-2013 BUDGET

Mt. San Jacinto Community CollegeBoard of Trustees Meeting

January 19, 2012

Presentation Topics

2011-2012 Budget Update Governor’s January Budget Proposal Potential Impact to:

Higher Education

California Community Colleges

Mt. San Jacinto College

Board of Trustees—January 19, 2012

*Budget Information provided by the Community College League of California & the Chancellor’s Office during the Budget Webinar on January 11, 2012

Budget Update 2011-2012 Budget

At Budget Enactment:$400 million ongoing general fund cutFee increase to $36 per unit effective Fall 2011

January Mid-Year Actions Additional Cuts totaling $102 million Fee increase to $46, effective Summer 2012Effective ongoing cut of $385 million


Threats:• More students applying for Board of Governors

fee waivers, leading to lower fee revenues

• Governor proposes cutting $146.9 million in general fund apportionments, with expected increased property taxes from the end of redevelopment

• Deficit coefficient due to property tax shortfalls




Budget Update 2011-2012 Budget “Trigger” Cuts

Series1

-$4

-$3

-$2

-$1

$0

Tier 1

Tier 2

Bill

ions

Tier 0 No Additional Cuts

$30 million Reduction to Community CollegesEnrollment Fee Increase of $10 (to $46)$23 million cut to Child Care$548 million reduction to UC, CSU & Other State Programs

Additional $72 million reduction to Community Colleges $248 million to K-12 Transportation Up to $1.5 billion cut to K-12 Revenue Limits (This would be prorated based on the level of reduced

revenue projections)

2011-12 Adopted Budget built on this assumption!

Tier 2 Trigger Pulled December 2011

• Additional $700K reduction in apportionment revenue

• Equivalent to 150 FTES

Governor plans to collect signatures for an initiative to temporarily increase taxes:

• November 6, 2012 ballot• Simple majority required• Raises sales tax by 0.5% from January

1, 2013 through December 31, 2016• Raises personal income taxes on

individuals > $250,000 from 2012 through 2016 tax years




Budget Update 2012-2013 BudgetNew Budget Triggers

If the revenue targets associated with the governor’s tax plan are not met, triggered cuts would be made:


Budget Update 2012-2013 BudgetCommunity College Scenarios

$218 million “deferral buy-back”

$12.5 million mandates block grant

$264 million base cut, workload reduction of around 5.56%

No Scenario A Augmentations

Categorical Consolidation Both Scenarios $411.6 million

Scenario A Scenario B


Budget Update 2012-2013 BudgetDeferral “Buyback”

Maneuver “spends money,” “reducing debt,” without a program benefit.

2012-13 Proposed2011-12

“Flexible” Programs

• Basic Skills• Student Financial Aid Admin.• EOPS• Cal Works• Matriculation • Academic Senate• Equal Employment Opportunity • Part Time Faculty Compensation • Fund for Student Success• Economic Development• Transfer Education & Articulation • Child Care Bailout• Nursing

“Restricted” Programs

• Disabled Students • Foster Care Education • Telecommunication & Technology


Budget Update 2012-2013 BudgetCategorical Flexibility

Tax measure is politically uncertain and costly.

Tax measure may not yield full $6.9B(LAO suggests perhaps only $4.8B)

Planning will be difficult. Workload reduction of 5.56% will be decided in November

Student fee shortfall with more BOG waivers. Property tax shortfall, particularly in light of

redevelopment projections/uncertainty.


Budget Update 2012-2013 Budget Budget Risks


Budget Update Redevelopment Successor Agency Oversight Boards

Budget Bill ABXI 26 included as part of the fiscal year 2011-12 State budget dissolves more than 400 Redevelopment Agencies (RDA’s) in the State. Supreme Court decided RDA’s may be abolished Successor Agencies will be established to pay the on-

going obligations of RDA’s. Each oversight board will be comprised of seven members

appointed by the County Board of Supervisors, the County Superintendent of Education and others.

The legislation stipulates that each oversight board will include a community college representative appointed by the State Chancellor of the California Community Colleges

Redevelopment Agencies (RDA’s) in the MSJC district include: Banning Redevelopment Agency Beaumont Redevelopment Agency Calimesa Redevelopment Agency County of Riverside Redevelopment Agency Hemet Redevelopment Agency Lake Elsinore Redevelopment Agency Murrieta Redevelopment Agency Perris Redevelopment Agency San Jacinto Redevelopment Agency Temecula Redevelopment Agency


Budget Update Redevelopment Successor Agency Oversight Boards

2012-2013 Base Revenue (Before reductions) $49,131,469Number & percent credit FTES 9,309

(96.08%)Number & percent noncredit FTES 258 (2.66%)Number & Percent CDCP FTES 122 (1.26%)


Budget Update 2012-13 Budget Simulation for MSJC

Scenario A: Governor’s Budget & Tax Package

Scenario B: Governor’s Budget, with Failure of Tax Package

Net Apportionment Cut:

$0 $-2,425,942

Workload reduction percent:

0% 5.56%

Total FTES Reduced 0 -539.14


Budget Update Ten Year Revenue Analysis

FY02-03 FY03-04 FY04-05 FY05-06 FY06-07 FY07-08 FY0809 FY0910 EST1011

PROJ1112

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

PROPERTY TAXES STATE APPORTIONMENT ENROLLMENT FEES OTHERFEDERAL

November Initiative Passes


Budget Update Credit FTES –Actual vs. Funded

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Projected

2012-2013 Projected

8,4589,373 9,730

10,212 9,835 10,079 9,8679,309

9,847

11,160

12,401

10,96110,335 10,400

Funded FTES Actual FTES


Budget Update Timeline

JANUARY1 2 3 4 5 6 78 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 2829 30 31

APRIL 1 2 3 4 5 6 78 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 2829 30

FEBRUARY 1 2 3 4

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

MARCH 1 2 3

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

MAY 1 2 3 4 5

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

JUNE 1 2

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

June 15—Constitutional deadline for Legislature

to send budget to Governor

May 14—Governor releases May

Revise

Legislative Budget Hearings & Proposals

Governor’s January Budget

Proposal

Questions?


State Budget Update & Governor’s 2012-2013 Budget

Budget Development CommitteeBecky Elam, VP Business Services Dr. William Vincent, VP Student ServicesDr. Dennis Anderson, VP Instruction Irma Ramos, VP Human Resources Beth Gomez, Dean Business Services Michael Welden, Faculty Member, Math Ted Blake, Learning Center Elias Escamilla, Counselor Elisabeth Anghel, Librarian Gail Jensen, Business Services Jennifer Pickens , Instructional Aid Karen Connell, Business ServicesFred Frontino, DSPS Bruce Brady, Procurement Ana Moreno, Student Government Steven Sanchez, Student Government

State Budget Update & Governor’s 2012-2013 Budget

Documents

Transcript of State Budget Update & Governor’s 2012-2013 Budget