Budget FY 11/12
Vice Chancellor’s Budget
Valley-Mission Community College is one of the 72 locally governed districts in
the California Community College (CCC) system.
The District’s revenue is dependent on the State’s enrollment-based
funding formula. SB 361, established in 2006, revised the CCC’s
apportionment allocation formulas to help ensure that district funding rates
were equalized at the 90th percentile of the highest funded
the allocation from the state general fund depends on enrollment, which varies
from year to year based on the economy, employment rates, and other
factors. Once the state budget is
approved, the Board of Governors and the State Chancellor’s Office determine
the allocations for each district. The
allocations are based on revenues from state and local sources, including
student fees. How much funding the
colleges receive depends on the state’s economy, state general fund revenues,
and the spending priorities of the Governor and state legislature. The amount of state funding for the community
colleges is determined by Proposition 98, which guarantees that about 40% of
the state general fund is allocated to K-12 public school systems and community
colleges. The share of the Proposition
98 funds for the community colleges varies annually. For FY 11/12 the community colleges’ share is
West Valley-Mission Community College District’s Final Budget for FY 11/12 was
developed within an approved timeline, the budget calendar, and presented to
the combined District Council/District Budget Advisory Committee and the Board
of Trustees’ Audit and Budget Oversight Committee (ABOC). The revenue assumptions were based on the
final State budget approved on June 29, 2011, and adjusted for the District’s
enrollment goals. The expenditure
budgets were adjusted based on revenue projections for the District, any known
trends in on-going expenditures, assumptions related to salary and benefit
increases, and projected one-time costs.
State Funding Assumptions
January 10, 2011, the Governor released the State Budget for FY 11/12. The Governor’s approach to cover a $25.4
billion shortfall relies on both cuts and revenues in roughly equal proportions
to achieve a balanced budget. The
proposal calls for a $12.5 billion in spending reductions, $12 billion in
revenue extensions, and $1.9 billion in other solutions to close the gap and
provide for a $1 billion reserve.
following are the major points of the proposed community college budget:
$400 million reduction in apportionments
$110 million for apportionment growth of
1.9% (approximately 22,700 full-time equivalent students)
Fee increase of $10 per unit (from $26 to
$36), which funds apportionment growth
An additional $129 million in inter-year
funding deferrals, bringing the total deferral to $961 million
No further cuts to student support
An extension of the categorical program
flexibility measures included in the 2009-10 Budget Act by another two years
On March 18, 2011, the Legislature,
utilizing the authority to pass a budget with a majority vote provided through
Proposition 25, the 2011-12 Budget Act (SB 69). For community colleges, this
locks in many of the provisions discussed since the Governor released his
budget proposal in January:
$400 million cut to the base apportionment, taken as a workload reduction.
- A $10
increase in per unit fees, which will mitigate the base cut.
rejection of the census change proposal.
rejection of the proposal for 1.9% growth.
- A new
inter-year deferral of $129 million.
of the “decoupling” of the 2% Financial Aid Services categorical program,
but only on a one-time basis.
While the 2011-12 Budget has been
approved by the Legislature, it rests on two major assumptions: 1) the
elimination of Redevelopment Agencies, which would save $1.7 billion in the
General Fund, and 2) that the Governor’s proposed revenue package will reach
the ballot and be approved by voters.
On May 16, 2011, the Governor
released his annual May Revision. The
Department of Finance has identified an increase in revenue of $6.6 billion
covering the 2010-11 and 2011-12 years. Thus, the scope of the budget gap
identified by the Governor has been reduced from $26.6 billion to $10.8
billion. The new revenue allows the Governor to increase funding for Prop. 98
and modify his tax proposals. The Proposition 98 funding increase of about $3
billion is used primarily for buyback of inter-deferrals rather than new
programmatic spending. As it is too late for a ballot vote for the 2011-2012
fiscal year, the Governor suggests that taxes would be extended by a direct
vote of the Legislature and would later be ratified by the voters. The May
Revision proposes to keep most of the earlier actions taken on the community
$400 million base reduction plus an increase of fees of $10 per unit.
revenues to buy back $350 million in inter-year deferrals. This proposal
would reduce the deferrals from $961 million to $611 million.
reduction identified earlier does not change under the Governor’s May
is no proposal for census reform or for any other significant policy
June 15, 2011, the Legislature passed the State Budget for 2011-12 on a largely
party-line vote. The following morning
the Governor vetoed the budget bills passed by the Legislature.
June 28, 2011, the Legislature, with help from the Governor, crafted a final
State budget that passed on a majority vote.
This budget relies heavily on increased revenue assumptions to avoid
additional cuts. Because of the $4
billion in additional revenues, the budget puts into place a series of
“triggers” if revenues are not coming in as projected. For community colleges, the “triggers” would
- Tier 0 (at least $3 billion
materializes): No cuts
- Tier 1 (between $2 to $3
billion): $30 million apportionment
cut, backfilled by an increase in fees of $10.
- Tier 2 (between $0 to $2
billion) Tier 1 cut and fee increase plus $72 million additional
final budget also assumes the $400 million apportionment cut, offset by $110
million in student fee revenue originally proposed in January, as well as the
new $129 million deferral from spring 2012 until October 2012.
Valley-Mission Community College District Assumptions
impact of the Governor’s proposal is a net reduction to apportionment of
$290 million to community colleges treated as workload reduction; however,
the total reduction is a little over $313 million. The $23 million difference is the result
of district base funding increasing over the 2009-10 and 2010-11 fiscal
years with no recognized increase in state support for these increases.
The major factors leading to these increases included the addition of two
new community colleges and several new centers. The workload reduction for West Valley-Mission Community College
District is $4,883,387.
program funding remains the same as the FY 10/11 current year budget. Categorical Flexibility program continues
in FY 11/12.
There are no anticipated shortfalls in
property taxes, but there will be an additional deferral of $129 million for FY
There are no growth funds.
The budget is balanced—revenues
match expenditures. This was achieved
primarily with the use of available one-time funds. As those funds will not be available for the
FY 12/13 budget, the District is developing a budget reduction plan that would
be completed by December 1, 2011, and implemented for the FY 12/13 budget.
In the event that the “triggers” are
pulled, as anticipated State revenues are not coming in as projected, the
District would have an additional shortfall of $1 to $1.5 million, which would
be covered from Land Corporation funds.
For the categorical programs,
funding remains the same as the FY 10/11 current year budget, and expenditures
match the revenues.