Dr. Roger Schultz and Wade W. Ellis, CPA January 23, 2014

Dr. Roger Schultz and Wade W. Ellis, CPA January 23, 2014

1. State Economic Recovery 2. California Community College Projections 3. MSJC Enrollment Targets 4. Questions

During the Inland Valley Community College Trustee and CEO Association held at MSJC s San Gorgonio Pass Campus Chancellor Harris stated that even during the economic crisis, community colleges were able to boost student achievements. Enrollment went down 22% during that time due to the historic funding cuts, yet California s community colleges granted 25% more certificates and degrees. After years of budget cuts forced us to turn away hundreds or thousands of students, Gov. Brown s proposal is welcome news for California and the economy Brice Harris, Chancellor, California Community Colleges

State Revenue Budget reflects a 5.9% increase in revenues, equal to an additional $5.9 billion above the revised current year level Unemployment rates 9.8% at the end of 2012 to 8.5% one year later; California s unemployment rate is still 1.5% higher than the nation Housing Market As of October 2013 prices of existing single family homes are up 25% from a year earlier

Governor Jerry Brown released his proposal for state revenues and spending for 2014-15 on January 9, 2014 His proposal projects $106.1 billion in new state revenues, plus $4.2 billion in carryover funds to pay for $106.8 billion in state expenditures Top Budget priorities are education and paying down prior year debts. Budget allocates $1.6 billion to the Budget Stabilization Account and $1 billion to the reserve

Access The Governor s Budget proposes an increase of $155.2 million (or a 3% increase) to general purpose apportionments for workload reductions The budget proposes that the Board of Governors adopt a formula for local growth allocation that gives first priority to districts identified as having the greatest unmet need in adequately serving their community's higher educational need The budget summary states that all districts will be eligible for expanded access and that districts will eventually be restored to pre-ressions levels.

Prop 98 Minimum Guarantee Governor estimates the Prop 98 guarantee at $61.6 billion a year over year increase of about 11.4% Prop 98 revenues are estimated to rise by $1.8 billion and $1.5 billion above 2012-2013 and 2013-2014 funding. The Governor primarily proposes to use these one-time resources to pay down deferrals. Deferrals $235.6 million in budget year funding to pay down deferrals. Combined with $356.8 million proposed in one-time funds for this purpose, this would completed eliminate the system s inter year deferrals. If adopted, retirement of deferrals will improve District cash flow and free other local resources that have been used in past year to subsidize State borrowing

Investing in Student Success $200 million to improve and expand student success programs and to strengthen efforts to assist underrepresented students Includes $100 million to increase orientation, assessment, placement, counseling and other education planning services for all matriculated students Includes $100 million to close achievement gaps in access and achievement in underrepresented students

Financial Stability for Apportionments Budget proposed increases of $38.4 million in 2013-14 and $35.6 million in 2014-15 This is possible by shifting a portion of the redevelopment agency revenues that are scheduled to be received in the final months of the current fiscal year to the following fiscal year Prop 98 General Fund would be used to backfill the difference between estimated total fiscal year redevelopment agency revenues and the amount the CCCs receive through April 15 th This change allows districts to have more certainty when preparing their fiscal plans

Implementing Statewide Performance Strategies The Budget provides $2.5 million to provide local technical assistance support implementation of effective practices across all districts, with a focus on underperforming districts The Budget provides $1.1 million and 9 positions for the Chancellor s Office to develop leading indicators of student success and to monitor districts performance

Cost of Living Adjustments (COLA) $48.5 million for a statutory COLA of 0.86% No Changes to Current Fee Levels Proposition 39 Funding $39 million for energy efficiency program grants Deferred Maintenance and Instructional Equipment $175 million in one time funds split between deferred maintenance and instructional equipment purchases

MSJC Project Funded SJC Campus Fire Alarm System Project funded in the Governor s Proposed Budget Innovative Models of Higher Education $50 million in one time funding is proposed for incentive awards that recognize models of innovation in higher education. Adult Education The Governor reiterates his commitment to provide funding in the 2015-16 budget to implement to plans being developed by regional adult education consortia

2014-2015 Estimated Enrollment Simulations* 2013-2014 Base FTES 2014-2015 Simulation Base (based on 3% enrollment growth) 5% Over Projected Base 7% Over Projected Base 10% Over Projected Base Credit FTES** 9,312.611 9,591.989 10,071.589 10,206.429 10,551.188 Non Credit FTES 372.920 384.108 403.313 410.995 422.518 CDCP 184.270 189.798 199.288 203.084 208.778 Total: 9869.801 10,165.895 10,674.190 10,877.508 11,182.485 The Budget Development Committee will be provided information on proposed growth funding FY 2014/15 and will recommend a growth target to Enrollment Management Team and College Council as part of the Shared Governance Process. First Principal Apportionment (P-1) information has not been released by the Chancellor s Office. A presentation on P-1 will be provided to the Board of Trustees once this information becomes available. **Enrollment projections will be adjusted once the P-1 is released. Revised projections will be provided to the Board of Trustees. **This figure does not include repayment of the 2011/12 workload restoration.

January 23, 2014