On Monday, June 22, the Governor and Legislature announced that they had come to a final negotiated agreement on the FY 20-21 budget. Today, the Legislature passed AB 89, a “Budget Bill Junior” bill that reflects the final budget agreement of the Governor and Legislature. This bill makes changes to SB 74, the main budget bill passed by the Legislature on June 15. The Legislature also passed numerous trailer bills to implement policy changes in the budget.
The final budget includes a compromise trigger construct, including $14 billion in cuts and deferrals across a variety of departments and programs. If the state receives at least $14 billion in additional Federal relief funds by October 15, 2020, these cuts and deferrals will trigger “off,” and funding will be restored. If the state receives between $2 billion and $14 billion, the cuts and deferrals will be allocated proportionally among all the proposed solutions. For community colleges, the trigger includes $791 million in payment deferrals for FY 20-21.
Capital Outlay Projects
The final 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 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.
CCFC is very pleased that the Governor and Legislature recognize the importance of capital outlay to the success of community college students, and the role these projects will play to stimulate economic recovery.
Additional Community College Items
The budget deal includes the following additional items:
CalBright College – Reduces funding for CalBright online college by $40 million (one-time funds) and $5 million (ongoing funds).
COVID-19 Response Block Grant – Includes $120 million in one-time Proposition 98 General Fund and Federal funding for a block grant supporting basic needs, learning loss, and COVID-19 response. The block grant will 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.
Apportionments – Maintains funding at 2019-20 levels, rejecting the May Revision proposal to cut apportionments. There is no cost-of-living adjustment (COLA) and no growth of funds included. The budget extends minimum revenue provisions (aka “hold harmless”) under the Student Centered Funding Formula by an additional two years.
Strong Workforce – Maintains the Strong Workforce program at FY 2019-20 spending levels, rejecting the Governor’s May Revision proposal to reduce funding.
Deferrals – Includes the following deferrals for CCC:
$332 million from FY 19-20 to FY 20-21
$662.1 million from FY 20-21 to FY 21-22; includes trailer bill language to allow hardship exemptions
Additional trigger deferral of $791.1 million Proposition 98 General Fund (rescinded if the state receives sufficient additional Federal relief funding)
Layoffs – Prohibits the governing board of a CCD from terminating permanent or probationary classified employees that either hold classification in or are assigned to positions in nutrition, transportation, or custodial services.
Once the Governor receives AB 89, he has 12 days to sign or veto the bill; he also has the ability to strike individual appropriations using his “blue pencil” authority. We are also still awaiting his action on the initial budget bill passed by the Legislature, SB 74, and the various budget trailer bills. Because the fiscal year begins July 1, we would anticipate the Governor’s action on SB 74 and AB 89 by that date.
Given the extension of the income tax filing deadline to July 15, it is possible that the Governor and Legislature could revisit the budget later this summer or fall when they have a more accurate picture of the state’s revenues.
CCFC Legislative Advocate