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Santa Monica College Faculty Association
1900 Pico Blvd.
Liberal Arts, Room 140
Santa Monica, CA  90405
Phone 310-434-4394
FAX 310-434-3601

President: Mitra Moassessi

Executive Secretary: Janet Watts

www.SMCFA.org

The Budget Passes - Into Next Year (November 2010) PDF Print E-mail
By Mitra Moassessi

    On the morning of October 8, 100 days after the due date for the 2010-11 budget, the legislature reached agreement on the state budget. Later that day, Governor Schwarzenegger signed the budget into law and used his line item veto power to reduce general fund spending by an additional $963 million, mainly by cutting health and child care services, and as a result, raising the reserve to $1.3 billion. General fund spending for 2010-11 would be $86.6 billion, compared to an $86.3 billion spending level for 2009-10.

    The Budget Act closes a budget gap of $19.3 billion by: $7.8 billion in expenditure related solutions, $5.4 billion of mostly yet to be approved federal funding, $3.3 billion in higher assumed state revenues, $2.7 billion of one-time loans and funding shifts, and $1.4 billion in additional revenue.

    The budget agreement also includes two more years of suspending the businesses’ ability to use net operating losses to reduce their tax liability. This suspension generates revenues of $1.2 billion, which is partially offset by a $132 million in new tax breaks for certain businesses.

    The Budget Act makes some changes to the state pension benefits for new state employees (doesn’t affect STRS and community college employees covered by PERS).   These changes include increasing the retirement age in order to achieve full benefits and calculating the pension benefits for future employees based on the highest consecutive three year average salary, instead of the single highest year.

    One of the expenditures related solutions that directly affects K-12 and community colleges is the suspension of the Proposition 98 minimum funding requirement (Proposition 98 is a voter approved amendment to the state constitution that sets a lower limit to the amount of money that the state is required to spend for K-14 education every year).

    Under proposition 98, for 2010-11 the minimum funding required should have been $53.8 billion.  The legislature suspended Proposition 98 and appropriated $49.7 billion for K-14 education, which is $4.1 billion less than the minimum guaranteed.

    For California Community Colleges, the budget also includes:

$126 million in growth money
$35 million for categorical programs (The governor vetoed this line item on October 19)
An additional $25 million for Economic Workforce Development (The governor vetoed this line item on October 19)
An additional $20 million for Career Technical Education Programs
Rejection of a negative COLA, COLA is set at zero

    For community colleges, the budget also contains a deferral of $129 million, which includes the $126 million growth money.  Rather than receiving this money this year, the community colleges will receive the money in the next fiscal year.

    The $126 million for growth will cover approximately one quarter of students who are already in the system and have received services from community colleges without any funding from the state.

     By providing the growth money, the state is giving an incentive to the colleges to once again do more with less.  Although this money can provide some relief for community colleges, deferring it to the next fiscal year makes it nothing more than promise of a relief. It will be up to the next governor and legislature to make the education a real priority.  Unfortunately, as long as there is a two-thirds requirement to pass the budget, it will be hard to believe that anyone would be willing or able to make the hard choices.
  		 

 

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