Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: January 19, 2007             No. 2

Overview of the Proposed Community College Budget for 2007-08 

The Governor’s Budget continues the state’s commitment to funding increases for enrollment growth, basic budget support, financial aid, and expansion of recent initiatives in career-technical education and nursing. Additionally, the Governor’s Budget proposes a new initiative to address pressing state needs—focusing on increasing the rate of meaningful educational outcomes for the most at-risk community college students. 

For the California Community Colleges, the Budget includes $8.6 billion ($6.6 billion from General Fund and Proposition 98 sources), which reflects an increase of $322.3 million ($362.3 million in General Fund and Proposition 98 sources) above the revised 2006-07 Budget. These amounts reflect a 3.9% total funding increase, including a 5.9% General Fund and Proposition 98 increase over the current year. 

The overall increase in Proposition 98 funding for K-14 education is $1.8 billion. The community college share of Proposition 98 is at 11.06%, a level that has been attained only once since Proposition 98 was established—compared to the current year share of 10.74%. 

Community College Fees 

The Budget proposes no fee increase. Community college fees for credit courses will remain at $20 per credit unit pursuant to an agreement reached in negotiations on the 2006 Budget Act. Community college fees remain the lowest in the nation and are 24% of the national average. 

Major Adjustments 

Budget Year 

• $224.9 million for a cost-of-living adjustment (COLA) of 4.04% for general-purpose apportionments.
• $109.1 million for enrollment growth for apportionments of 2%. This funding will enable community colleges to enroll an additional 23,000 full time equivalent (FTES) students. This level exceeds the 1.65% change in the adult population and is in addition to the funding that is already in the system for the unrestored FTES from the prior three years. When the $109.1 million is added to the restoration funding that is already in the system, there will be the potential for at least 4% growth over the estimated level of current year FTES. The amount of actual restoration dollars available in 2007-08 will not be known until the First Principal Apportionment (P-1) in February.
• $19.6 million increase for categorical program enrollment growth (2%) and COLA (4.04%). These programs include basic skills, matriculation, disabled students programs and services, campus childcare tax bailout, and extended opportunity programs and services.
• $33.1 million redirection of surplus basic skills overcap incentive funding to support additional matriculation and support services for community college students. Of this amount, $19.1 million is specifically dedicated to additional counseling and tutoring services for those students most at risk of failing to complete a program.
• $9 million one-time current-year funding and $9 million in ongoing funding to support additional nursing program investments in community colleges. These funds are available in the community college base from the 2006 Budget Act set-aside actions and are now proposed to assist colleges in expanding enrollments by providing startup funding for new nursing programs, funding for new clinical simulation laboratories, funding to expand services that will reduce attrition, and funding incentives to add more prerequisite science courses.
• $33.2 million increase to offset the remaining revenue reduction incurred by colleges in the budget year due to the reduction in student fees from $26 to $20 per unit in the spring of 2007 and other workload adjustments.
• $197.2 million reduction to apportionments to reflect estimated growth in local property taxes of an identical amount.
• $350,000 in ongoing funds for the Fiscal Crisis and Management Assistance Team (FCMAT) to ensure that resources are available to respond to financial instability indicators.

Capital Outlay 

The Governor’s Budget proposes funding 60 projects at a cost of $479.4 million from 2006 bond funds (Proposition 1D). In addition, the Governor is proposing that a new education facilities bond measure be placed on the 2008 and 2010 ballots to generate approximately $6 billion earmarked for community college capital outlay projects. The Governor’s proposal would provide community colleges with more than 50% of the total amount ($11 billion). 

Left Outs 

The System Office requested funds for Career Development and College Preparation, Student Services allocation for newly accredited colleges, Basic Skills Initiative, Part-Time Faculty Office Hours/Health Insurance, Increase for Full-Time Faculty Positions, Compensation Equity for Part-Time Faculty, Mathematics Engineering Science Achievement (MESA), Economic Development, Technology, Reimbursement of State Mandates, and Physical Plant/Instructional Equipment, but none of these items were provided any new funding in the 2007-08 Budget (see Attachment A for the 2007-08 Comparison of System Budget Request to the Governor’s Budget). 

—Arnold Bray