State Budget Update & Governor’s 2012-2013 Budget

1. Mt. San Jacinto Community College Board of Trustees Meeting January 19, 2012 State Budget Update & Governor’s 2012-2013 Budget

2. Presentation Topics • 2011-2012 Budget Update • Governor’s January Budget Proposal • Potential Impact to: • Higher Education • California Community Colleges • Mt. San Jacinto College *Budget Information provided by the Community College League of California & the Chancellor’s Office during the Budget Webinar on January 11, 2012 Board of Trustees—January 19, 2012

3. Budget Update 2011-2012 Budget At Budget Enactment: • $400 million ongoing general fund cut • Fee increase to $36 per unit effective Fall 2011 January Mid-Year Actions • Additional Cuts totaling $102 million • Fee increase to $46, effective Summer 2012 Effective ongoing cut of $385 million Board of Trustees—January 19, 2012

4. Budget Update 2011-2012 Budget Threats: • More students applying for Board of Governors fee waivers, leading to lower fee revenues • Governor proposes cutting $146.9 million in general fund apportionments, with expected increased property taxes from the end of redevelopment • Deficit coefficient due to property tax shortfalls Board of Trustees—January 19, 2012

5. Budget Update 2011-2012 Budget “Trigger” Cuts • Additional $700K reduction in apportionment revenue • Equivalent to 150 FTES 2011-12 Adopted Budget built on this assumption! Tier 2 Trigger Pulled December 2011 Board of Trustees—January 19, 2012

6. Budget Update 2012-2013 Budget Board of Trustees—January 19, 2012

7. Budget Update 2012-2013 Budget Board of Trustees—January 19, 2012

8. Budget Update 2012-2013 Budget Governor plans to collect signatures for an initiative to temporarily increase taxes: • November 6, 2012 ballot • Simple majority required • Raises sales tax by 0.5% from January 1, 2013 through December 31, 2016 • Raises personal income taxes on individuals > $250,000 from 2012 through 2016 tax years Board of Trustees—January 19, 2012

9. Budget Update 2012-2013 BudgetNew Budget Triggers If the revenue targets associated with the governor’s tax plan are not met, triggered cuts would be made: Board of Trustees—January 19, 2012

10. Budget Update 2012-2013 Budget Board of Trustees—January 19, 2012

11. Budget Update 2012-2013 BudgetCommunity College Scenarios Scenario A Scenario B • $218 million “deferral buy-back” • $12.5 million mandates block grant • $264 million base cut, workload reduction of around 5.56% • No Scenario A Augmentations Categorical Consolidation Both Scenarios $411.6 million Board of Trustees—January 19, 2012

12. Budget Update 2012-2013 BudgetDeferral “Buyback” Maneuver “spends money,” “reducing debt,” without a program benefit. 2011-12 2012-13 Proposed Board of Trustees—January 19, 2012

13. Budget Update 2012-2013 BudgetCategorical Flexibility Board of Trustees—January 19, 2012

14. Budget Update 2012-2013 Budget Budget Risks • Tax measure is politically uncertain and costly. • Tax measure may not yield full $6.9B(LAO suggests perhaps only $4.8B) • Planning will be difficult. Workload reduction of 5.56% will be decided in November • Student fee shortfall with more BOG waivers. • Property tax shortfall, particularly in light of redevelopment projections/uncertainty. Board of Trustees—January 19, 2012

15. Budget Update Redevelopment Successor Agency Oversight Boards • Budget Bill ABXI 26 included as part of the fiscal year 2011-12 State budget dissolves more than 400 Redevelopment Agencies (RDA’s) in the State. • Supreme Court decided RDA’s may be abolished • Successor Agencies will be established to pay the on-going obligations of RDA’s. • Each oversight board will be comprised of seven members appointed by the County Board of Supervisors, the County Superintendent of Education and others. • The legislation stipulates that each oversight board will include a community college representative appointed by the State Chancellor of the California Community Colleges Board of Trustees—January 19, 2012

16. Budget Update Redevelopment Successor Agency Oversight Boards • Redevelopment Agencies (RDA’s) in the MSJC district include: • Banning Redevelopment Agency • Beaumont Redevelopment Agency • Calimesa Redevelopment Agency • County of Riverside Redevelopment Agency • Hemet Redevelopment Agency • Lake Elsinore Redevelopment Agency • Murrieta Redevelopment Agency • Perris Redevelopment Agency • San Jacinto Redevelopment Agency • Temecula Redevelopment Agency Board of Trustees—January 19, 2012

17. Budget Update 2012-13 Budget Simulation for MSJC 2012-2013 Base Revenue (Before reductions) $49,131,469 Number & percent credit FTES 9,309 (96.08%) Number & percent noncredit FTES 258 (2.66%) Number & Percent CDCP FTES 122 (1.26%) Board of Trustees—January 19, 2012

18. Budget Update Ten Year Revenue Analysis November Initiative Passes Board of Trustees—January 19, 2012

19. Budget Update Credit FTES –Actual vs. Funded Board of Trustees—January 19, 2012

20. Budget UpdateTimeline Governor’s January Budget Proposal Legislative Budget Hearings & Proposals May 14—Governor releases May Revise June 15—Constitutional deadline for Legislature to send budget to Governor Board of Trustees—January 19, 2012

21. State Budget Update & Governor’s 2012-2013 Budget Questions? Budget Development Committee Becky Elam, VP Business Services Dr. William Vincent, VP Student Services Dr. Dennis Anderson, VP Instruction Irma Ramos, VP Human Resources Beth Gomez, Dean Business Services Michael Welden, Faculty Member, Math Ted Blake, Learning Center Elias Escamilla, Counselor Elisabeth Anghel, Librarian Gail Jensen, Business Services Jennifer Pickens , Instructional Aid Karen Connell, Business Services Fred Frontino, DSPS Bruce Brady, Procurement Ana Moreno, Student Government Steven Sanchez, Student Government Board of Trustees—January 19, 2012