Demystifying the
Budgeting Process
Pierce College AFT 1521
February 25, 2010
Ken Takeda
Vice President, Administrative Services
1
Presentation Outline







Budget Allocation Process
Funding of K-14 Education
Funding of Community Colleges
LACCD Budget
Pierce College 09/10 Budget
Budget Calendar
Questions and Answers
2
Budget Allocation Process
3
Funding of K-14 Education




California Community Colleges (CCCs) are part of
state’s Master Plan for Higher Ed but are not funded
same way as UC and CSU systems
For funding, CCCs are linked to K-12 districts
Minimum annual funding for K-12 and CCCs is
determined by Proposition 98
Proposition 98:




Amendment to state constitution passed in 1988
Purpose: Guaranteed funding source that grows each
year with economy and number of students
Source: General fund, local property taxes
One of three formulas (“Tests”) is used to determine
funding each year; which test depends on how
economy and General Fund revenues grow from
year to year:
4
Funding of K-14 Education




Test 1—Share of General Fund. Provides 39
percent of General Fund revenues. Had not been
used since 1988-89.
Test 2—Growth in Per Capita Personal
Income. Increases prior year funding by growth
in attendance and per capita personal income.
Operative in years with normal to strong General
Fund revenue growth.
Test 3—Growth in General Fund Revenues.
Increases prior-year funding by growth in
attendance and per capita General Fund
revenues. Operative when General Fund revenues
fall or grow slowly.
Suspension: Legislature can suspend Prop 98
guarantee with 2/3 vote for one year and provide
any level of K-14 funding.
5
Funding of K-14 Education




By definition, Prop 98 sets maximum funding
available to other state programs
Prop 98 general fund commitment = about 45% of
state general fund
Weak economy and slow revenue growth create
budget pressures for all programs; K-12 and CCCs
are not insulated from this because of Prop 98
Declining Prop 98 guarantee due to ADA and
economic trends
6
Funding of K-14 Education
Ongoing Proposition 98 Funding ($ in millions)
Program
2008-09
2009-10
2010-11
K-12 Education
$30,260
$30,844
$32,023
12,726
13,237
11,950
42,986
44,082
43,974
General Fund
3,918
3,722
3,981
Local property tax
2,011
1,953
1,913
5,929
5,675
5,895
105
94
85
General Fund
Local property tax
Subtotals
Community Colleges
Subtotals
Other Agencies
Total Proposition 98
$49,019
$49,851 $49,954
7
Funding of Community Colleges


Community colleges’ share of Prop 98 allocation =
11-12%; balance goes to K-12
State Chancellor’s Office allocates CCCs’ share of
Prop 98 funding to local districts based on SB 361
(Scott, 2006), which:




Replaced complex and outdated funding formula
“Equalized” funding rates across districts
Recognized fixed operating costs of colleges; fairer
allocation to smaller colleges
Established (in Ed Code) beginning funding rates for
credit, non-credit, and career development and
college preparation (CDCP) non-credit full-time
equivalent students (FTES)
8
Funding of Community Colleges
1 FTES = 525 Contact Hours
1
5
3
17.5
2
525
student, enrolled in
classes per primary term, at
hours per week, per class for
weeks per primary term, attending
primary terms, yields
Standard Measure
Used Statewide for…




Funding
Key performance indicator
Productivity measure
Program Review
hours per year
9
Funding of Community Colleges
Unrestricted General Fund





“Foundation” or “basic” funding per institution. For
FY 2010-11:
 FTES=>20,000 (large college)
$4,428,727
 10,000<=FTES<20,000 (medium)
$3,875,136
 FTES<10,000 (small)
$3,321,545
Revenue per FTES. For FY 2010-11:
 Credit
$4,564.83
 Non-credit
$2,744.96
 CDCP
$3,232.07
Annual cost-of-living adjustment (COLA)
Above funding = Base Revenue
Enrollment growth and restoration funding
10
Funding of Community Colleges
Concept
Example

Base
100 FTES
= prior year funded total

Actual
110 FTES
= reported: projected or actual

Actual Growth
10 FTES

Growth Rate/Cap 6% of Base = 6 FTES

Funded Growth
6 FTES

Funded Total
106 FTES

Over Cap
4 FTES
(base + growth)
actual above base
actual growth to cap
= base + funded growth
not funded by apportionment,
eligible for Over Cap funding
11
Funding of Community Colleges
Unrestricted General Fund (cont):


Other unrestricted General Fund allocations:
 Lottery
 Apprenticeship
 Non-resident tuition
 Part-time faculty compensation
 Other state
Local sources:
 Interest income
 Dedicated revenues
12
Funding of Community Colleges
Restricted General Fund





State separately funds 22 categorical programs that
are part of CCCs’ “restricted” General Fund
Highest funded in 2009-10: Basic Skills, CalWORKS,
CTE, DSPS, Economic Development, EOPS,
Matriculation, Student Fin Aid admin
Other state support: block grants, SB1133 CTE
Federal: Perkins (VTEA), veterans ed, work study
Local: Community Services, Health Services,
Parking
13
Funding of Community Colleges
Other Funds




In addition to the General Fund, community college
districts maintain other funds: federally-supported,
state-supported, locally-funded
Federal: Student financial aid, building
State: capital outlay/special reserve, child
development (CDCs), student financial aid
Local: Bookstore, capital outlay, cafeteria, debt
service, general obligation bond/building
14
LACCD Budget—All Funds
FUND
GENERAL FUND
Unrestricted
2008-09 Budget
2009-10 Budget
$ (in thousands)
$ (in thousands)
604,022
574,052
87,331
97,538
691,353
671,591
38,818
40,211
CAFETERIA
3,726
3,303
CHILD DEVELOPMENT
4,153
3,864
136,303
153,910
1,037,917
825,864
115,995
156,029
410
7,310
TOT APPROPRIATIONS
2,028,675
1,862,082
Less Interfund Transfers
6,676
12,591
2,021,999
1,849,491
Restricted
TOTAL GENERAL FUND
BOOKSTORE
SPECIAL RESERVE
BUILDING
FINANCIAL AID
DEBT SERVICE
TOTAL AVAILABLE
15
LACCD Budget—Allocation Model






Uses SB 361 funding formula to distribute state general
revenue to colleges as part of Unrestricted General Fund
Each college receives base allocation based on college
size + funding for credit, noncredit and enhanced
noncredit FTES at state-funded rates
Small colleges received supplemental basic allocation of
$500,000 to its basic allocation in FY2006-07, adjusted by
COLA in future years; Trade-Tech receives $500,000 for
high-cost programs
Colleges are assessed for District Contingency Reserve at
5% of unrestricted General Fund; college reserves
additional 1% of its unrestricted General Fund
Each college is assessed for centralized and District Office
services based on share of total FTES
Balances are retained by colleges and District Office
16
LACCD Budget—Unrestricted GF
College
2008-09 Budget
2009-10 Budget
City
60,736,473
55,885,265
East
110,398,061
102,973,680
Harbor
28,910,982
28,080,909
Mission
26,661,625
25,718,121
Pierce
69,619,567
64,828,425
Southwest
22,277,746
21,011,252
Trade-Tech
50,789,838
48,062,358
Valley
52,229,540
49,659,130
West
31,464,972
28,911,467
1,458,644
1,493,111
454,547,448
426,623,718
ITV
College Total
17
LACCD Budget—Unrestricted GF
Location
College Total
Forward
2008-09 Budget 2009-10 Budget
454,547,448
426,623,718
26,375,297
22,765,233
--
10,761,712
Centralized Accounts
67,563,265
47,254,793
Contingency Reserve
27,182,613
25,690,166
Sheriff’s Contract
13,000,000
12,951,047
--
12,951,536
1,243,597
888,672
13,868,981
14,119,402
604,022,201
574,052,479
District Office
Information Tech
Categorical Support
Restricted Deficit
College Reserve
Total Unrestricted
18
Pierce College 09/10 Budget
Revenue Source
#FTES
Rate
Basic Allocation
Credit
Non-Credit
CDCP
Total Base Revenue
Less: Workload Red
Net Base Revenue
$
Amount
$ 3,875,136
14,775.16
4,564.83
67,446,006
296.83
2,744.96
813,695
-
3,232.07
-
$ 72,134,837
(2,714,406)
$ 69,420,431
Non-Resident Tuition
1,524,843
Dedicated Revenues
719,318
Lottery
Interest/Other
Total Revenues
1,974,584
641,651
$ 74,280,827
19
Pierce College 09/10 Budget
Adjustment
#FTES
Total Revenues
Rate
$
Amount
$ 74,280,827
Assessment--DW, DO:
•
Total Credit
15,366
1,030.65
(15,836,928)
•
Non-Credit
296
606.82
(179,881)
Sheriff's Contract
ITV redistribution
08-09 Balance Forward
Additional Reduction
Revised Allocation
(1,583,948)
22,290
8,488,659
(362,594)
$ 64,828,425
20
Pierce College 09/10 Budget
Description
Certificated Salaries
2009-10 Final
% of Total
$35,142,515
54.2
Non-Certificated Salaries
12,438,227
19.2
Benefits
11,053,075
17.0
991,222
1.5
2,191,933
3.4
479,377
0.7
2,532,076
3.9
64,828,425
100.0
Printing & Supplies
Operating Expenses
Capital Outlay
Other
Total
21
Pierce College 09/10 Budget
Description
2009-10 Budget
Projected
Expenditures
Certificated Salaries
35,142,515
30,710.336
Non-Certificated Salaries
12,438,227
12,193,328
Benefits
11,053,075
10,952,167
991,222
1,172,094
2,191,933
3,441,690
479,377
408,088
2,532,076
40,059
64,828,425
58,917,763
Printing & Supplies
Operating Expenses
Capital Outlay
Other
Total
22
Budget Calendar for FY 2010-11





Jan 8:
Mar 5:
May 14:
Jun 30:
Sep 15:
Governor’s Budget
Preliminary Budget
Revised Governor’s Budget
Tentative Budget
Final Budget
23
Questions and Answers
Thank you for your time and attention
Contact information:
Bill de Rubertis, retiree
Budget Committee Co-Chair Emeritus
Pierce College
6201 Winnetka Avenue
Woodland Hills, CA 91371-0002
deRubeWA@piercecollege.edu
24