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Board budget workshop February 21, 2012

Prepared by Edralin J. Maduli. Board budget workshop February 21, 2012. Current Year Budget. Adopted budget balanced Mid-year “triggers” covered. 2011-12 Mid-Year Budget Actions. Tier 1 implemented $30 million reduction, but not backfilled $437,917 reduction to District (on-going)

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Board budget workshop February 21, 2012

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  1. Prepared by Edralin J. Maduli Board budget workshopFebruary 21, 2012

  2. Current Year Budget • Adopted budget balanced • Mid-year “triggers” covered

  3. 2011-12 Mid-Year Budget Actions • Tier 1 implemented • $30 million reduction, but not backfilled • $437,917 reduction to District (on-going) • Tier 2 implemented • Additional $72 million workload reduction • $1,122,555 reduction to District (on-going)

  4. 2011-12 Deficit Factor • January 13th State Budget Workshop • State Chancellor's Office announced anticipated additional enrollment fee shortfall of $100 million • P1 Report released February 16th • Enrollment fee shortfall: $107 million • Property tax shortfall: $41 million • League aggressively seeking a backfill

  5. 2012-13 State Budget • Governor releases State Budget on January 5, 2012 • $9.2 billion shortfall ($4.1 billion from 2011-12) • Close the gap with budget cuts and new revenues

  6. Governor’s Tax Proposal • November 6th ballot • Increase sales tax by 0.5% from January 1, 2013 to December 31, 2016 • Increase personal income taxes on higher income earners from 2012 to 2016 • Tax increase would generate $6.9 billion in 2012-13

  7. Community College Budget • $218.3 million to “buy back” a portion of $961 million deferral • $12.5 million block grant for State reimbursable mandates • No COLA (estimated to be 3.17%) • No enrollment growth funding • Includes apportionment reduction of $146.9 million to balance an identical increase in property taxes • Consolidate categorical programs into one block grant of $411.6 million

  8. 2012-2013 Triggers • What happens if Governor’s Tax Initiative fails • Budget augmentations go away • Additionally, $264 million apportionment cut (5.56% reduction) • Impact to the District • Additional $4 million workload reduction (about 900 FTES)

  9. District Impact • Planning for 2012-13 is difficult and challenging. • Unknowns and risks.

  10. District Budget Development • $6 million shortfall without trigger implementation • Additional $4 million shortfall if tax proposal fails

  11. Tentative Budget Development without Trigger • Total anticipated shortfall -- $6 million • Starting Point • $4 million carryover from 2011-12 • Additional expenditures for 2012-13 • $1 million (Step/Column, ACE PG&D, PERS) • 2011-12 Mid-year reduction • $ 1 million

  12. Budget Reduction Strategies • Land Corporation funding support • $1.5 million • Bargaining concessions • To be determined • District/College budget reduction • $3 million

  13. What happens if Governor’s proposal fails • Additional $4 million shortfall for District • Budget strategy to mitigate shortfall • Land Corporation funding support of $2.9 million (one-time) • Associate faculty funding reduction -- $1.1 million savings (on-going)

  14. Planning for 2013-14 District Budget • If Governor’s tax initiative passes, District’s budget will be balanced. • If Governor’s tax initiative fails, District will need to plan for at least a $2.5 million budget reduction.

  15. District/College Budget Reduction Plan for FY 2012-13 • District Services: $540,000 • Mission College: $1,156,200 • West Valley College: $1,303,800

  16. District Services Budget Reduction Plan • Savings from vacant positions (4.5 FTE) • Anticipated layoff (1.0 FTE) • Operating budget reduction

  17. Mission College Budget Reduction Plan • Areas where reductions were made: • Salary savings: $897,811 • College reorganization: $167,379 • Line item budget cuts: $91,010 • Total Reduction: $1,156,200

  18. WVC’s Goals for the Budget Reduction Plan • Meet the WVC budget reduction target of $1.3M • Ensure the college’s long-term fiscal stability • Align shrinking fiscal resources with expenditures • Deploy limited resources to high need areas • Limit impact to the instructional program to the extent possible • Align programs and services to address high demand areas • Align programs and services to meet the state’s priorities for community colleges

  19. WVC’s Budget Reduction Plan: Seven Facets • Savings from vacant positions • Shifting position expenses to alternate funding sources • Reduction/elimination of positions • New position • Reclassifications due to reorganization of essential functions and duties • Reassignment of existing staff to high-need areas • Operations of CDC

  20. Statutory Requirements • Full-time Faculty Obligation • Fall 2012 > 68.23% • Fall 2011 68.23% • 50 % Law • 2011-12 > 50.0% • 2010-11 52.77%

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