By Howard  Stahl                    

In this article, I would like to share information about the district’s 2010-2011 budget.  At the present time, there is still no state budget.  As a result, much may change between now and when the budget act is finally enacted later this year (or maybe even next year…).  Nonetheless, the information below is what we know as of right now.

2009-2010 In Review

Last year, the district faced many different challenges including unfunded students, unprecedented reductions to categorical programs that serve our neediest, at-risk students, and a very weak economy that pushed many returning students to the college to improve their job skills.  Following a number of recommendations put forward by the DPAC Budget Committee that were later accepted by Dr. Tsang, the district planned for a number of different expenditure reductions.  As adopted, the 2009-2010 district budget included an operating deficit of $1,805,563 (that is, expenses incurred in excess of revenues received).

However, when the year finally concluded, a number of unplanned, positive one-time events occurred.  For example, Federal ARRA funds from the Obama stimulus program as well as a CALPers Rate Holiday resulted in total one-time revenue increases of $2,628,942.  Even while serving 1,928 unfunded FTES last year, the district ended the year with a surplus of $1,061,345.  This good news deserves repeating – that even in the face of the worst educational funding levels in a generation, the college completed the year in the black, adding over a million dollars to its reserves, which now stand at $18,470,103!  The following chart shows the college’s reserve balance over the past five years.

Chart 1: Santa Monica College Reserves

The most serious issue the district continues to face is the state’s ongoing underfunding of the college.  This problem is not unique to our college – every education system in the state is facing this same underfunding crisis.  For our college, in 2009-2010, we served 1,928 FTES above and beyond the level of funding provided by the state.  Had the college been paid for all the students it serves, the college would have received an additional $8,428,387 in apportionment funding.  The chart below shows the unfunded FTES over the past two years and the lost revenue these unfunded students represent.

Chart 2: Lost Revenue Due To Unfunded FTES

During the academic year 2009-2010, the college received no state funding for 8 out of every 100 students served by the college. Clearly, this is a trend that needs to be reversed, not just for our college but for every public institution in California!  

2010-2011 Adopted Budget
    
Looking ahead to this year, the Board of Trustees adopted a new budget at its September board meeting.  This new budget is based on the governor’s original budget proposal and includes assumptions that may or may not hold once the actual state budget is enacted.  The budget assumes:

•    Principal apportionment of $107,059,094
•    FTES Growth of 2.21%
($2,2136,223 in new funding for 475 additional FTES)
•    a COLA of -0.38%
(Please be aware that, contractually, the district cannot apply a negative COLA to reduce your paycheck).
•    No further deficit factor or workload reduction
•    A decrease of $159,333 in part-time faculty categorical funding
(Please be aware that, contractually, faculty salaries remain in effect and unchanged regardless of the level of funding provided to the district)
•    A decrease in non-resident tuition of -2.0%
(a loss of $409,477 to the District general fund)

The district predicts an operating deficit of $5,998,320 (that is, expenses incurred in excess of revenues received) in its 2010-2011 adopted budget.  Time will tell whether all these assumptions will hold true or whether one-time items will occur that benefit the district in unplanned ways.  Historically, when the district predicts a deficit in the adopted budget, it rarely transpires.  Clearly, our substantial reserves show that our district is in good financial shape.

The Faculty Association will continue to report on the budget when any future, inevitable adjustments are made.