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State Budget Crisis

State Budget Crisis. John Morton Vice President for Community Colleges Fall 2008. The State Budget Deficit (in millions of dollars). Based on 10/29/08 Council of Revenues revised forecast. State Tax Revenue Projections (in millions of dollars). Bottom Line.

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State Budget Crisis

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  1. State Budget Crisis John Morton Vice President for Community Colleges Fall 2008

  2. The State Budget Deficit(in millions of dollars) Based on 10/29/08 Council of Revenues revised forecast

  3. State Tax Revenue Projections(in millions of dollars)

  4. Bottom Line • Current State budget cannot be maintained • Likely to get even worse • No choice but to cut - the budget cannot be in deficit

  5. Steps to Solution • Step 1 - Legislature reduced FY 2009 general funds by 4% of “discretionary” budget • Discretionary means all funds used for administration, operations, and public service • CC budget reduced by $1,373,087

  6. Steps to Solution • Step 1 (continued) • CC System reduced equipment fund by $820,000 • Balance of $553,087 distributed to campuses based on new money (GF+TFSF increases)

  7. Steps to SolutionFY 2009 Legislative Reduction

  8. Steps to SolutionFY 2009 Legislative Reduction

  9. Steps to Solution • Step 2 - Governor restricted additional 4% of discretionary budget • CC share was $1,019,547 • CC System restricted $500,000 of enrollment growth money • Balance of $519,547 was distributed to campuses based on • A 25% - GF Apprn + TFSF Revenue • B 25% - Adjusted Cash Balance • C 25% - Vacancy Savings (Delay filling to 01/01/09) • D 25% - Vacancy Savings (2 year old vacancies)

  10. Steps to SolutionFY 2009 Executive Restriction

  11. Steps to SolutionFY 2009 Reduction & Restriction

  12. Steps to Solution • Step 3 - Governor orders FY 2009 Budget Execution Policy Constraints • No filling of positions without permission, except for teaching faculty • No out-of-state travel without permission • No personal services contracts in excess of $10,000 without permission • No equipment purchases in excess of $10,000 without permission • No motor vehicle purchases without permission

  13. Steps to Solution • Step 3 (continued) • UH limits Governor’s policy constraints to general funds • Chancellors may grant mission critical exceptions • Weekly reports on exceptions required to be submitted to the President

  14. Steps to Solution • Step 4 - Governor asks UH to plan for FB 2009-11 reductions of: • $13.5M based on 10% of discretionary budget and 1% of non-discretionary budget • $22.0M based on 15% of discretionary budget and 2% of non-discretionary budget • $30.6M based on 20% of discretionary budget and 3% of non-discretionary budget

  15. Steps to Solution • UH plans at the 10% Reduction Level • $9.0M from the general fund budget • Shift $4.5M from general funds to tuition and fee funds • CC share is • $2,338,830 of general funds • $1,166,287 of tuition and fee funds

  16. Steps to Solution • For the General Fund Reductions CC System Office reduces: • $500,000 in enrollment growth funding • $285,946 through eliminating 5.75 vacant positions • Mandated electricity savings of $854,446 • Balance of $698,438 is allocated to the campuses based on General Fund/TFSF budget

  17. Steps to SolutionFB 2009-11 Budget Reduction – 10% Level

  18. Steps to Solution • Windward CC elects to reduce budget by • Counselor Vacancy for Vocational & Continuing Education/Employment Training Center - $56,917

  19. Steps to Solution • Tuition increases • UH will generate approximately $20.0M in new money each year at constant enrollment • Windward CC projects to generate an additional $229,987 in tuition revenue in FY 2010

  20. Steps to SolutionWindward CC Additional TFSF Revenue vs Funding Requirements

  21. Steps to SolutionWindward CC Additional TFSF Revenue vs Funding Requirements

  22. Steps to SolutionWindward CC Additional TFSF Revenue vs Budget Reductions at 15% and 20% Levels

  23. Steps to Solution • Special and Revolving Fund Cash Carry forward balances • CC system has $18,098,301 as of June 30, 2008 • Reserve requirement is $9,680,361 (4% of unrestricted fund E&E + working capital) • Windward CC has $819,559 ending cash balance • Reserve requirement range is $604,709-$739,612 (3-4%) • Available to spend $79,947

  24. Steps to SolutionGeneral Fund Unbudgeted Temporary Positions – 9/19/08FY 2008 GF + TFSF Casual Payroll and Student Assistant E&E

  25. Steps to Solution • Transfer temporary appointments to permanent positions

  26. Steps to SolutionGeneral Fund Permanent Position Vacancies – 9/30/08

  27. Steps to SolutionFB 2009-11 Capital Improvements Program (CIP) BOR Budget(General Obligation Bond – Thousands of dollars)

  28. Steps to SolutionFB 2009-11 Capital Renewal and Deferred R&M Request(Thousands of dollars)

  29. Steps to SolutionFB 2009-11 Capital Renewal and Deferred R&M Request(Thousands of dollars)

  30. Steps to Solution • Follow the strategic plan • No change in commitment to goals of strategic plan; cut elsewhere • Repair and maintenance and equipment replacement remains a priority • Balance of new tuition dollars should go to repair, replacement, and renovation, PCRs

  31. State Budget Crisis Fall 2008

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