Community College Facility Coalition (CCFC)
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January 10, 2019

CCFC Budget Update: Governor Newsom Releases First Budget Proposal – Capital Outlay Program Funding

Today, Governor Newsom released the 2019-20 budget proposal, three days after being sworn in to office. Assuming continued economic expansion during FY 2019-20, the budget proposes both new spending as well as significant savings. The Governor stressed that new spending was primarily aimed at one-time purposes rather than ongoing commitments, and savings would position California for a future economic downturn. The budget includes $144.2 billion in General Fund spending and funds the Rainy Day Fund reserve at $15.3 billion. The Governor estimates a surplus of $21.4 billion, which is approximately $6.5 billion more than the surplus projected by the Legislative Analyst’s Office in November 2018.

Capital Outlay and Proposition 51

The budget includes an increase of $358.7 million in general obligation bond funding for 12 new community college capital outlay projects and 15 continuing projects authorized in prior fiscal years. The budget proposes to fund both preliminary plans and working drawings for the 12 new starts.

New starts in FY 2019-20 include:

  • Butte-Glenn CCD - Butte College: Technology Remodel
  • Los Angeles CCD - Los Angeles City College: Theater Arts Replacement
  • Los Rios CCD - American River College: Technical Building Modernization
  • Merced CCD - Merced College: Agricultural Science and Industrial Technologies Complex
  • Peralta CCD - College of Alameda: Replacement of Buildings B and E (Auto and Diesel Technologies)
  • Redwoods CCD - College of the Redwoods: Physical Education Replacement
  • Rio Hondo CCD - Rio Hondo College: Music/Wray Theater Renovation
  • San Bernardino CCD - San Bernardino Valley College: Technical Building Replacement
  • Santa Monica CCD - Santa Monica College: Arts Complex Consolidation
  • Sequoias CCD - College of the Sequoias: Basic Skills Center
  • South Orange County CCD - Saddleback College: Gateway Building
  • State Center CCD - Fresno City College: New Child Development Center

The Board of Governors had approved 39 new start projects for funding in 2019-20, in contrast to the 12 new projects the Governor is proposing to fund. All 39 projects are worth $690 million (State funds) through construction.

Deferred Maintenance and Instructional Equipment – The 2018-19 budget included $28.4 million for deferred maintenance, instructional equipment, and specified water conservation projects. The 2019-20 budget summary does not include a statement about increasing this amount; we are awaiting more information.

First-Year Implementation of the Student-Centered Funding Formula – The 2018-19 budget approved a new community college funding formula, to be phased in over three years. When fully implemented, 60% of funding will be based on enrollment, 20% on enrollment of low-income students, and 20% on performance outcomes. The 2019-20 budget proposes a revised implementation plan to:

  • Maintain current rates for student success allocation factors, adjusting for inflation in 2019-20, pending further review.
  • Fund reasonable growth within the student success allocation, creating reasonable limits on year-over-year increases capped at 10 percent.
  • Clarify that the definition of transfer students reflects an unduplicated count of students.

Additional Items of Interest

  • California College Promise - $40 million increase (Proposition 98 General Fund) to support a second year of free tuition for students. This proposal extends the California College Promise to waive enrollment fees for first-time, full-time students for a second academic year. The 2018-19 budget included $46 million to fund the first year of free tuition.
  • California State Teachers’ Retirement System Employer Contribution Rate – The Budget includes a $3 billion one-time payment (non-Proposition 98 General Fund) to CalSTRS to provide relief to local educational agencies and community colleges, addressing the rising costs of CalSTRS pensions. Of this amount, $700 million would buy down the employer contribution rates in 2019-20 and 2020-21, and $2.3 billion would be paid toward the employers’ long-term unfunded liability, expected to save employers $6.9 billion over the next three decades.
  • CCC Apportionments:
    • $248.3 million increase for a 3.46% cost-of-living adjustment.
    • $26 million increase for enrollment growth.

Next Steps

The Legislature will now begin reviewing the Governor’s proposal in-depth at hearings over the course of the next few months, as they work to meet a constitutional deadline of adopting the budget by June 15. CCFC will engage directly in this process and advocate for funding all of the projects on the 2019-20 Spending Plan approved by the Board of Governors in September 2018, including 39 new starts.

Rebekah Cearley
CCFC Legislative Advocate