Today the Senate and Assembly both passed SB 74, the Budget Act for FY 2020-21. Despite passing the budget bill by the constitutional deadline of June 15, there is still significant work that needs to be done before the budget can be considered final.
First, legislative leadership issued a statement on Thursday, June 11, indicating that they had not come to a final agreement on the budget with the Governor in time to meet the June 15 deadline. As such, today’s action reflects passage of the Legislature’s version of the budget, which the Governor is not anticipated to accept. We expect negotiations between legislative leadership and the Governor to continue, and we anticipate budget modifications reflecting their final agreement to be passed by the Legislature and signed by the Governor.
Second, given the extension of the income tax filing deadline to July 15, and the hope for additional Federal COVID-19 relief funding, the state does not have an accurate picture of likely revenues. As such, we anticipate further budget modifications later this summer and possibly in the fall, as that picture becomes clearer.
In addition to SB 74, the legislature approved a few trailer bills today, including AB 76, which addresses Proposition 98. AB 76 includes a $330 million deferral for community colleges, from May and June to July 2020. Trailer bills make policy changes to implement provisions of the budget bill.
The Legislature’s budget includes a trigger construct, assuming that California will receive $14 billion in additional Federal funds. If these funds don’t materialize, mid-year cuts and solutions will be triggered on October 1, 2020. The Legislature’s budget avoids major reductions to school and community college funding, in favor of solutions including deferrals, cuts to non-K-14 programs, and the use of additional reserves. The Legislature proposes closure of the CalBright online college and redirection of its funding, including $17 million for additional community college apportionments and $75 million for a COVID-19 response block grant to support expenses such as mental health services, housing and food insecurity, re-engagement of students who left college in Spring 2020, technology, and development of online courses and student supports. The funds may also be used for cleaning supplies and personal protective equipment.
The Governor’s May Revision proposed cuts and other budget solutions that could be triggered “off” if California receives additional sufficient Federal relief funds.
Capital Outlay Projects
The Legislature’s budget includes the following community college capital outlay projects in FY 20-21:
$28.4 million for 25 new capital outlay projects (preliminary plans and working drawings phase)
$194.7 million for 15 continuing capital outlay projects (construction phase)
Additionally, the Legislature’s budget includes reappropriation of funds for 23 continuing capital outlay projects that were funded in prior budget acts. These projects may continue to move forward with working drawings or construction.
Click here for a list of all the projects included in the Legislature’s budget.
Once the Governor receives SB 74, he has 12 days to sign or veto the bill. We anticipate additional negotiations and work between the Governor and Legislature, and passage of an amended budget once an agreement is reached on the budget framework. Additional trailer bills will also be considered by the Legislature.
CCFC Legislative Advocate