From:  ROBERTSON_PIEDAD  Sent:   Thu 5/8/2003 3:22 PM
 To:   DISTRICT
Subject:   Budget Update
May 8, 2003

Dear College Community,
We are about to enter a crucial period in the current budget crisis and I believe this is a good time to give you an update.
Let’s begin with the latest in Sacramento. Legislators have taken significant steps, in a bipartisan action, to reduce the enormous state budget deficit. They approved a series of measures that will shave $4.6 billion off the two-year deficit. In addition, the state is seeking a $10 billion loan from private investment bankers. The latest actions, combined with the midyear budget cuts approved in March, reduce the two-year $34.5 billion deficit nearly in half.

Unfortunately, slower personal income tax projections are expected to add another $2 billion to the deficit when Gov. Gray Davis releases revised budget projections next Wednesday (May 14).

We will know more next Wednesday when the governor releases his revised budget. But uncertainty will continue to prevail until a 2003-04 budget is adopted and signed into law by the governor.

Given the uncertainty, we have to plan for the worst-case scenario – a $15 million shortfall for SMC.
We continue to consider all proposals for cost-cutting measures. Last month, we sent you a “laundry list” of a wide range of cost-saving proposals, which are being fine-tuned as we look at the figures more closely.

Based on that list, the Budget Committee and the Campuswide Coordinating Council have sent us cost-savings recommendations, which are currently being analyzed. But based on our most recent information, the Budget Committee’s numbers do not add up to the $15 million (the calculations assume that all the committee’s proposals – including retirement incentives – can actually be implemented).

In another development, Davis’ proposal to increase student fees from $11 to $24 a unit, beginning next school year, has prompted the introduction of legislation that would phase in fee increases over a period of time. For example, a bill by Assemblywoman Carol Liu increases fees from $11 to $16 a unit beginning in spring 2004, with the additional $5 per unit going to the college district, rather than the state. Further fee increases would follow in subsequent years.

On another front, SMC has joined a growing statewide movement to bring equity to college funding. As you may know, SMC is the lowest funded community college district in the state, receiving $3,493 per full-time-equivalent-student – well below the state average and less than half what is received by the highest funded district in California, $8,209 per FTES. Legislators have told us the budget crisis actually gives the state an opportunity to put into place a simpler and fairer funding mechanism by the time California recovers financially in two to three years. All we are looking for is to be funded at the state average of $4,000 per FTES. We will keep you posted on this issue.

The college community continues to make our voices heard on the budget crisis. Once the governor releases his revised budget, the Associated Students is poised to begin a second round of postcard writing, with 10,000 to be mailed to legislators and the governor. The A.S. has also set up an excellent website to organize "virtual marches" and galvanize supporters statewide. The website still needs signatures. You can go to http://www.sos-ccc.org.

This is a difficult time, and we are faced with excruciating choices. Let’s hope Gov. Davis’ revised budget contains less devastating news than we have had in the past few months.

Piedad F. Robertson
Superintendent/President