TO: GOVERNING BOARD
FROM: PRESIDENT
SUBJECT:
AGENDA ITEM BACKGROUND
2014-2018 Budget Planning Update
DATE
June 9, 2014
ENCLOSURE(S)
REASON FOR BOARD CONSIDERATION ITEM NUMBER
Page 1 of 15
ACTION
BACKGROUND :
The Governor’s 2014-15 Budget was released on January 9, 2014. An all campus e-mail was sent to the college community on February 28, 2014. The e-mail provided a summary of the impact the 2014-15 state budget will have on available resources at the college. The update is posted on the Budget
Information Website: http://www.cabrillo.edu/internal/adminservices/budgetcenter/.
On January 15, the College Planning Council (CPC) had a preliminary discussion about the 2014-15 state budget. On March 5, 2014, CPC reviewed the budget calendar and budget planning documents that will be used to develop the 2014-15 Preliminary Budget. CPC updated the Budget Process, Commitments,
Criteria and Strategies document on March 19, 2014.
The May Revise was received on May 13, 2014. See attachment D-F for the updates received from the
Chancellor’s Office and the California Community College League. Budget estimates have been updated to reflect relevant changes that are reflected in the 2014-15 Preliminary Budget. CPC reviewed budget changes related to the May Revise on May 21.
2014-15 Base Budget Planning Assumptions (Attachment A)
The 2014-15 budget planning assumptions reflect the assumptions for the Preliminary Budget:
.85% COLA, approximately $430,000 for Cabrillo
No restoration/growth funding is assumed for 2014-15. The mid-case assumes the college will drop from an enrollment cap of 10,894 to a cap of 10,775. The deficit factor applied to apportionment funded has been reduced from 1.75% to 1.25%. These changes result in a permanent loss of revenue of $555,000.
The expenditure assumptions include the replacement of four full-time faculty positions. Two vacant faculty positions will be eliminated from the budget.
Ongoing expenditures will increase, i.e., column and step increments, medical benefits, retiree benefits, utility expenses, PERS and other maintenance and repairs.
An increase in the employer STRS contribution rate of 1.25% has been added to the expenditure assumptions as a result of the Governor’s proposal to fully fund the STRS liability.
The ongoing portion of the 2013-14 salary increase will be budgeted for the 2014-15 Preliminary
Budget. Bargaining unit negotiations for 2014-15 are underway. A tentative agreement has been reached with CCFT. The details of the agreement will be included in the 2014-15 Final Budget.
Administrator Initiating Item:
Graciano Mendoza
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature

No Final Disposition

The 2014-15 Preliminary Budget will be developed using the mid-case scenario. The projected deficit for planning purposes is approximately $1.7 million.
2014 through 2018 Multi-Year Base Budget Planning Assumptions (Attachment B)
The long-term projection for 2014 through 2018 the only new unrestricted revenue we expect to receive is COLA.
The college’s enrollment will be evaluated on an ongoing basis. Enrollment will be evaluated on an ongoing basis.
One-Time Operating Reserves (Attachment C)
Preliminary estimates of operating reserves available are as follows:
The unallocated unrestricted general fund operating reserve balance as of March 1, 2014 was
$500,000. The term unallocated refers to funds in the budget that are not allocated for a specific purpose.
One-time increase in revenue of approximately $800,000 from the 2012-13 final apportionment calculation. The state backfilled a large percentage of the RDA shortfall for 2012-13. These funds will be received in 2013-14.
The college is anticipating budget savings of $ 2 million for 2013-14.
Based on current projections, the anticipated deficit for 2014-15 will be $1,764,000. The college will use operating reserves to cover the shortfall.
The $2 million estimated savings in the base operating budget, the new funding and the match allocations will not be included in the 2014-15 Preliminary Budget. Changes to funding and match allocations will be included in the 2014-15 Final Budget that will be approved by the
Governing Board in September, 2014.
The planning assumptions have been updated to reflect the impact of budget stability on ongoing revenue. One-time operating reserves will be used to balance the 2014-15 budget shortfall.
Attachment D: 5/13/14 Update from Dan Troy, Chancellor’s Office
Attachment E: 5/13/14 Update from Scott Lay, Community College League
Attachment F: 5/20/14 Board of Governor’s Update
Attachment G: 5/20/14 Update from Dan Troy, Chancellor’s Office

June 9, 2014 Board Meeting
2014-15 Base Budget Planning Assumptions (Best, Mid, Worst Case)
2013-14 Structural Deficit
2013-14 Revenue Adjustments
A. Restoration/Growth @ 1.63%
2014-15 Revenue Adjustment
2014-15 Revenue adjustments
A. Permanent Loss of Apportionment Funding (FTES Assumptions 10,675, 10,775,
10,894) with a Deficit factor of 1.25%
B. COLA- .85%
C. Restoration/Growth
TOTAL Revenue Adjustment
Worst
Case
(750,000)
0
(965,000)
0
0
(965,000)
Range
Mid-
Range
(750,000)
0
(555,000)
430,000
0
(125,000)
Attachment A
Best
Case
(750,000)
0
0
430,000
0
430,000
2013-14 Expenditure Adjustments
Full-time Faculty Obligation -
2014-15 Funded- FON positions 192.25 (Fall 2014 FON TBD- will be unfrozen)
Fall 2013 frozen FON- 177.6 (Fall Actual 187.25 excluding Children's Center teachers)
Step, Column, Longevity, etc
Add 12 units for Counseling CG courses
Medical Benefit Increase- 8% (50%-50% cost share = 1/2)
Retiree Medical Benefit Increase
Utilities
PERS
STRS
Net Operating Increases
Other?
Labor/Negotiations agreeements
Total Expenditure Adjustments
Projected 2014-15 Structural Balance (Deficit)*
One-time Reserves used to bridge deficit
Net Deficit for 2014-15
39,000 78,000 117,000
(1.0)
(348,000)
(21,000)
(400,000)
(50,000)
(100,000)
(43,000)
(230,000)
(150,000)
(2.0)
(324,000)
(21,000)
(364,000)
105,000
(50,000)
(33,000)
(230,000)
(50,000)
(3.0)
(300,000)
(21,000)
(328,000)
105,000
0
(23,000)
(135,000)
0
?
?
?
?
?
?
(1,303,000) (889,000) (585,000)
(3,018,000) (1,764,000) (905,000)
(3,018,000) (1,764,000) (905,000)
* The ongoing deficit includes the ongoing portion of the salary increase for 2013-14 only. Does not include categorical program impacts on the general fund.
The salary/benefit budget includes a credit to the expense lines of $300k for salary/benefit savings.

June 9, 2014 Board Meeting Attachment B
2014-15 through 2017-18
Base Budget
Planning Parameters
2014-15
Projected
(750,000)
2015-16
Projected
(1,764,000)
2016-17
Projected
(2,236,000)
2017-18
Projected
(3,013,000) Difference between ongoing Revenues & Expenses (Structural Deficit)
Increase in State Revenue Anticipated
A. Permanent Loss of Apportionment Revenue (FTES Assumptions- Mid-
Case = 10,775 with a 1.25% Deficit Factor
B. COLA @.85%, 1.0%, 1.0%,1.0%
A. Restoration/Growth
Net change in revenue
Net Increases in Ongoing Expenses
Full-time Faculty Position changes net of retirements & adjunct backfill
Add Counseling Teaching Units for CG 51 Courses
Step, Column, Longevity Increases, etc.
Medical Plan Rate Increase-- 8% (50%-50% cost share in place)
Retiree Benefit Increase
PERS Rate Increase
STRS Rate Increase
Utilities
Net Operating Increases
Labor agreements
Total Expenditure Increases
Budget Reductions
Ongoing Shortfall*
Operating Reserves available to bridge deficit
Deficit net of One-time funds
(555,000)
430,000
0
(125,000)
78,000
(21,000)
(324,000)
(364,000)
105,000
(33,000)
(230,000)
(50,000)
(50,000)
?
(889,000)
?
(1,764,000)
1,764,000
0
550,000
?
?
(1,214,000)
?
?
(324,000)
(248,000)
(50,000)
(150,000)
?
(100,000)
(150,000)
?
(1,022,000)
?
(2,236,000)
555,000
?
?
(1,681,000)
?
?
(324,000)
(248,000)
(50,000)
(460,000)
?
(100,000)
(150,000)
?
(1,332,000)
?
(3,013,000)
560,000
?
?
(2,453,000)
?
?
(324,000)
(248,000)
(50,000)
(666,000)
?
(100,000)
(150,000)
?
(1,538,000)
?
(3,991,000)
* Cost of 1% for all employees = $427,000. The salary estimates do not include
the one-time salary increase for 2013-14.
RDA and EPA revenue shortfalls continue to be a major threat.
The RDA shortfall was backfilled for 2012-13 and 2013-14 but there is no guarantee this will continue.

June 9, 2014 Board Meting
ONE-TIME OPERATING RESERVES
Operating Reserves unallocated as of 3/1/14
Projected
$500,000
ADD:
2012-13 one-time increase from recalculation
*Anticipated Budget Savings from 2013-14
LESS:
Reserves needed to balance 2014-15 budget
Net one-time allocations for Board Elections and Retiree Benefits
*Increase in SSSP Match
Program Planning Funding for 2014-15
Other
Projected Operating Reserves available in 2014-15
* These items will be included in the 2014-15 Final Budget when funding levels are known and the 2013-14 fiscal year is closed.
$800,000
$2,000,000
($1,764,000)
($234,000)
?
?
?
$1,302,000
Does not include FTES reserve balance of $596,838 or the 5% General Reserve
Attachment C

Attachment D
Colleagues,
The Governor released his May Revision update on the morning of Tuesday, May 13 th
. While those watching the updated revenues flow into the Treasury for the 13-14 fiscal year may have hoped for ongoing increases even beyond the relatively strong proposal outlined in January, the
Governor and his staff see a more complicated picture. While there was strong revenue growth in the 13-14 fiscal year, the Governor does not see the current year increase carrying over into the 14-15 fiscal year to any large extent.
Further, as the Proposition 98 minimum guarantee is based largely on year-over-year change, the upward tick in the 13-14 year combined with a modest revenue increase in the 14-15 projection actually decreases the minimum guarantee in the budget year relative to the January estimate.
Despite the decrease in the 14-15 guarantee, the Governor’s proposal actually manages to create room for some increased programmatic support by shifting some of the buy down of deferrals from the budget year to the current year.
While more time and details are needed to get a fuller picture of the proposal, the key highlights are as follows:
$50M is added to the Economic and Workforce Development Program (EWD) on a one-time basis “to improve student success in career technical education.” The funds are intended to develop, enhance, and expand CTE programs that build upon existing regional capacity to better meet regional market demands.
$42.4M is added to offset decreases in local property tax and fee revenue estimates for the
14-15 year.
$6M for increased technology infrastructure ($1.4M one-time, $4.6M ongoing) to upgrade bandwidth and replace technology equipment at local campuses
Adjustments to Access Funding and COLA – o A decrease of $14.8M to reflect a change from 3 percent to 2.75 percent in funds for new access for the 2014-15 fiscal year. Additionally, the Governor will push back the implementation of a revised growth formula until the 2015-16 fiscal year. o A decrease of $1.2M to reflect a drop in the COLA from 0.86 percent to 0.85 percent
Adjustment to the January maintenance and instructional equipment proposal – o A decrease from $175M to $148M o All funds will go toward deferred maintenance in the revised proposal, rather than a
50/50 split with instructional equipment o A local match will not be required in 2014-15
A decrease of $1.5M for Proposition 39 projects/workforce development, due to reduced revenues attributable to the California Clean Energy Jobs Act
The May Revise will also propose increasing the funding rate for Career Development and
College Preparation courses to the rate for credit courses commencing with the 2015-16 year

Attachment D
Deferral pay down adjustments – o A decrease of $55.5M in the prior year o An increase of $133.6M in the current year o A decrease of $78.1M in the budget year o While there are adjustments of payments among the three fiscal years, the net result is still a complete pay down of system deferrals as of the 14-15 fiscal year
The Governor is expected to emphasize the need for fiscal restraint amid many calls for greater spending and restoration of general fund programs that were negatively impacted during the
Great Recession. To this end, the Governor will be pushing passage within the Legislature of a ballot initiative to be placed before voters this fall that will modify a proposed Rainy Day Fund that will smooth out the state’s boom and bust budget cycles (fueled primarily by capital gains returns) and require the state to pay down liabilities. Further, it is anticipated that the Governor will work on a solution regarding CalSTRS obligations, though it is not clear at this time what he will propose.
Next steps will include a response by the Legislative Analyst’s Office (recall that at this time last year, the LAO projection of revenues was far more optimistic the Governor’s figures), review by the budget committees of each house, and a legislative conference committee to iron out differences between the two houses. It is expected that the budget will be approved and signed by the Governor prior to July 1, 2014.
Regards,
Dan Troy
Vice Chancellor, College Finance and Facilities Planning
California Community Colleges Chancellor’s Office

Attachment E
May 13, 2014
Dear Victoria,
Good morning. Governor Jerry Brown just released the May Revision to his proposed 2014-15
State Budget , and the spending plan builds on the solid budget proposal for community colleges released in January.
Here are the major community college items, with changes from January identified in yellow:
Item
(amounts in 000s)
Ongoing Funds
Enrollment Growth
Student Success and
Support Program
Student Success and
Support Program -
Equity
Disabled Students
Programs and Services
Extended Opportunity
Programs and Services
Economic and
Workforce
Development
Student Financial Aid
Administration
CalWORKs
Part-time Faculty
Compensation
Basic Skills
Telecommunications
2013-14
Enacted
1.63%
2014-15
January
3%
2014-15
May
0.85%
2.75%
Note
General apportionment only
General apportionment only
$99,183 $199,183 $199,183 variable match
$0 $100,000
$84,223
$88,605
$22,929
$67,537
$35,545
$24,907
$84,223
$88,605
$22,929
$67,896
$35,545
$24,907
$20,037 $20,037
$15,790 $15,790
$100,000
$84,223
$88,605
$22,929
$67,896
$35,545
$24,907
$20,037
$20,390
See one-time funds below

Attachment E and Technology
Infrastructure
Nursing Education
Foster Care Education
Program
Part-time Faculty
Office Hours
Campus Childcare Tax
Bailout
Transfer and
Articulation
Part-time Faculty
Health Insurance
One-Time Funds
Physical Plant and
Instructional
Equipment
Economic and
Workforce
Development
Telecommunications and Technology
$13,378 $13,378
$11,786 $11,786
$3,514
$3,350
$698
$490
$13,378
$11,786
$148,000
$175,000 (maintenance only)
$3,514
$3,350
$698
$490
$3,514
$3,350
$698
$490 to increase
$50,000 student success in career-technical programs
$1,400
2014-15 no match in
The revised budget makes technical adjustments for property tax (+17.7m general fund) and student fee revenues (+24.7m general fund), and continues the plan to pay off all remaining apportionment deferrals. Student fees would remain at $46 per credit unit. The summary also proposes to increase the enhanced noncredit funding rate to the credit rate beginning in 2015-16, a significant win for our advocacy.
We'll continue to dive into the details as they become available and will share more shortly.
Sincerely,
Scott Lay
President and Chief Executive Officer, The League
Orange Coast College '94

PRESENTED TO THE BOARD OF GOVERNORS
DATE: May 20, 2014
SUBJECT: Update on the Governor’s 2014-15 May Revision
Budget Proposal
Item Number: 5.2
Attachment: No
Attachment F
CATEGORY:
Recommended By:
Fiscal Policy TYPE OF BOARD CONSIDERATION:
Consent/Routine
Dan Troy, Vice Chancellor
First Reading
Approved for
Consideration:
Brice W. Harris, Chancellor
Action
Information
ISSUE: This item presents an overview of the Governor’s 2014-15 budget proposal as it relates to the
X
California Community Colleges.
RECOMMENDATION: This item is presented for Board information and discussion.
ANALYSIS: The Governor released his May Revision update on the morning of Tuesday, May 13 th
. While those watching the updated revenues flow into the Treasury for the 13-14 fiscal year may have hoped for ongoing increases even beyond the relatively strong proposal outlined in January, the Governor and his staff see a more complicated picture. Although there was strong revenue growth in the 13-14 fiscal year, the Governor does not see the current year increase carrying over into the 14-15 fiscal year to any large extent.
Further, as the Proposition 98 minimum guarantee is based largely on year-over-year change, the upward tick in the 13-14 year combined with a modest revenue increase in the 14-15 projection actually decreases the minimum guarantee in the budget year relative to the January estimate. Despite the decrease in the 14-15 guarantee, the Governor’s proposal actually manages to create room for some increased programmatic support by shifting some of the buy down of deferrals from the budget year to the current year.
1

Attachment F
New Funding Proposals Put Forth in the May Revision
$50M is added to the Economic and Workforce Development Program (EWD) on a one-time basis “to improve student success in career technical education.” The funds are intended to develop, enhance, and expand CTE programs that build upon existing regional capacity to better meet regional market demands.
$42.4M is added to offset decreases in local property tax and fee revenue estimates for the 14-
15 year.
$6M for increased technology infrastructure ($1.4M one-time, $4.6M ongoing) to improve the reliability of internet connectivity and replace technology equipment at local campuses
Slight Changes to Access Funding and COLA
A decrease of funding for access by $14.8M to reflect a change from 3 percent to 2.75 percent in funds for new access for the 2014-15 fiscal year. Additionally, the Governor will push back the implementation of a revised growth formula until the 2015-16 fiscal year.
A decrease of $1.2M to reflect a drop in the statutory COLA from 0.86 percent to 0.85 percent.
Deferred Maintenance and Instructional Equipment
All funds will go toward deferred maintenance, rather than a 50/50 split with instructional equipment
Decreases funding for deferred maintenance and instructional equipment from $175M to
$148M
Eliminates the local match for the 2014-15 fiscal year
Proposition 39
Due to a lower revenue forecast for the California Clean Energy and Jobs Creation Act, the May Revision includes a decrease of $1.5M for Proposition 39 projects/workforce development, reducing funding for this purpose to $37.5M in 2014-15. The decision of how to split these funds between energy efficiency projects and workforce development is left to the Chancellor’s Office.
CDCP Funding Rate
The May Revise proposes to increase the funding rate for Career Development and College Preparation
(CDCP) courses to equal the funding rate for credit courses. The change would take effect beginning in
2015-16. The purpose of instituting this change in 2015-16 is to allow the colleges one year to plan before the rates change.
Deferral Retirement Adjustments
Given the increased revenue projections for 2013-14, the Governor’s May Revision modifies the plan to pay off community college deferrals by shifting a greater amount to the current year, and decreasing the amount paid in the prior year and budget year. The changes are summarized below:
A decrease of $55.5M in the prior year
An increase of $133.6M in the current year
2

Attachment F
A decrease of $78.1M in the budget year
While there are adjustments of payments among the three fiscal years, the net result is still a complete pay down of system deferrals as of the 14-15 fiscal year.
Governor’s Push for Fiscal Prudence
The Governor is emphasizing the need for fiscal restraint amid many calls for greater spending and restoration of general fund programs that were negatively impacted during the Great Recession. Rather than spending all the increased revenue that has buffered the state since the passage of Proposition 30 and an improving economy, Governor Brown had cautioned voters and legislators about the need to address the “Wall of Debt” in lieu of expanding services in a way he believes would be unsustainable.
The Governor’s May Revision includes two proposals that demonstrate the Governor’s goals of building reserves and paying down debts:
CalSTRS
Perhaps the most significant change in the Governor’s May Revision is the addition of a proposal to fully pay the $74 billion in unfunded CalSTRS liabilities over the next 30 years. Under the Governor’s proposal, these costs would be shared, with the state paying approximately 20 percent, teachers paying
10 percent, and the remaining 70 percent would be the responsibility of schools and community colleges.
The Governor proposes a 1.25% increase to the employer contribution rate in the 2014-15 fiscal year and annual increases of 1.61% thereafter until the rate reaches 19.1% in the 2020-21 fiscal year. The increased cost to colleges in 2014-15 is estimated at $28 million and the cost could grow to over $300 million when the rate ultimately reaches 19.1%. While it is certainly true that the state needs to address the long-term liability, increased obligations act as a negative COLA on district budgets. In whatever agreement the Legislature and the Governor come to concerning this issue, we believe there should be a corresponding plan to structure CCC budgets so that it can accommodate these significant new costs.
Rainy Day Fund
Governor Brown and others have long expressed concern about the “boom and bust” state budget cycles owing to the volatility of the state’s capital gains revenues. To address this issue, the Governor stated his intent in January to modify the “Rainy Day Fund” ballot initiative scheduled for the ballot this
November in a way that increase the state’s budget reserves, make progress toward addressing liabilities and “smooth” out budget expenditure cycles, including Proposition 98. This push led to last week’s unanimous passage of ACAX2 1, which contains these significant features:
As of 2015-16, require the Controller to annually transfer 1.5% of state General Fund revenues to a revised Budget Stabilization Account (BSA), until the BSA is equal to 10% of state general fund revenue
3

Attachment F
Require that half of the transferred amount be used to retire specified state obligations (e.g., public school liabilities, pension obligations)
Create a Proposition 98 reserve by diverting capital gains revenues that exceed 8% of general fund reserves, under certain circumstances
Transfer funds from the Proposition 98 reserve to K-14 schools to fund growth and COLA for years in which the minimum guarantee declines
Legislative Analyst’s Office Revenue Projections
The Legislative Analyst’s Office released their response to the Governor’s May revision on May 16, 2014.
Similar to last year, the LAO’s projections are more optimistic than those of the Governor. The LAO projected that revenues over 2011-12 through 2014-15 are $2.5 billion higher than the estimates made by the Department of Finance, with most of that increase attributable to the budget year. The legislature may choose to go with the LAO’s higher revenue projections as they are crafting their budget, which could add up to a nearly $250M increase to CCC budgets for the 2014-15 fiscal year. However, as we saw last year, the Governor Brown will strongly resist a budget that uses higher revenue estimates than those put forth by the Department of Finance.
CONCLUSION: This week, the Legislature will hold budget subcommittee hearings to review the
Governor’s proposals and take action to adopt a budget that reflects the priorities of each house. It is probable that the legislature will make changes in funding for the Governor’s proposals as they look to fund their own priorities. Next, a joint legislative conference committee will meet to begin the process of sorting out differences between the two houses and craft a final budget to be submitted to the
Governor for approval. It is likely that a final budget will be signed by June 30, 2014.
4

Attachment G
Colleagues,
The Governor released his May Revision update on the morning of Tuesday, May 13 th
. While those watching the updated revenues flow into the Treasury for the 13-14 fiscal year may have hoped for ongoing increases even beyond the relatively strong proposal outlined in January, the
Governor and his staff see a more complicated picture. While there was strong revenue growth in the 13-14 fiscal year, the Governor does not see the current year increase carrying over into the 14-15 fiscal year to any large extent.
Further, as the Proposition 98 minimum guarantee is based largely on year-over-year change, the upward tick in the 13-14 year combined with a modest revenue increase in the 14-15 projection actually decreases the minimum guarantee in the budget year relative to the January estimate.
Despite the decrease in the 14-15 guarantee, the Governor’s proposal actually manages to create room for some increased programmatic support by shifting some of the buy down of deferrals from the budget year to the current year.
While more time and details are needed to get a fuller picture of the proposal, the key highlights are as follows:
$50M is added to the Economic and Workforce Development Program (EWD) on a one-time basis “to improve student success in career technical education.” The funds are intended to develop, enhance, and expand CTE programs that build upon existing regional capacity to better meet regional market demands.
$42.4M is added to offset decreases in local property tax and fee revenue estimates for the
14-15 year.
$6M for increased technology infrastructure ($1.4M one-time, $4.6M ongoing) to upgrade bandwidth and replace technology equipment at local campuses
Adjustments to Access Funding and COLA –
O A decrease of $14.8M to reflect a change from 3 percent to 2.75 percent in funds for new access for the 2014-15 fiscal year. Additionally, the Governor will push back the implementation of a revised growth formula until the 2015-16 fiscal year.
O A decrease of $1.2M to reflect a drop in the COLA from 0.86 percent to 0.85 percent
Adjustment to the January maintenance and instructional equipment proposal –
O A decrease from $175M to $148M
O All funds will go toward deferred maintenance in the revised proposal, rather than a 50/50 split with instructional equipment

Attachment G
O A local match will not be required in 2014-15
A decrease of $1.5M for Proposition 39 projects/workforce development, due to reduced revenues attributable to the California Clean Energy Jobs Act
The May Revise will also propose increasing the funding rate for Career Development and
College Preparation courses to the rate for credit courses commencing with the 2015-16 year
Deferral pay down adjustments –
O A decrease of $55.5M in the prior year
O An increase of $133.6M in the current year
O A decrease of $78.1M in the budget year
O While there are adjustments of payments among the three fiscal years, the net result is still a complete pay down of system deferrals as of the 14-15 fiscal year
The Governor is expected to emphasize the need for fiscal restraint amid many calls for greater spending and restoration of general fund programs that were negatively impacted during the
Great Recession. To this end, the Governor will be pushing passage within the Legislature of a ballot initiative to be placed before voters this fall that will modify a proposed Rainy Day Fund that will smooth out the state’s boom and bust budget cycles (fueled primarily by capital gains returns) and require the state to pay down liabilities. Further, it is anticipated that the Governor will work on a solution regarding CalSTRS obligations, though it is not clear at this time what he will propose.
Next steps will include a response by the Legislative Analyst’s Office (recall that at this time last year, the LAO projection of revenues was far more optimistic the Governor’s figures), review by the budget committees of each house, and a legislative conference committee to iron out differences between the two houses. It is expected that the budget will be approved and signed by the Governor prior to July 1, 2014.
Regards,
Dan Troy
Vice Chancellor, College Finance and Facilities Planning
California Community Colleges Chancellor’s Office