Transcript Budget Overview - Antelope Valley College

Budget Overview
Board Retreat
Diana Keelen
January 18, 2012
“While the California budget is uncertain, there is one
thing that is certain, it will change.”
Governor’s 2012-2013 Budget Proposal Highlights
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State deficit has gone from $26.6 billion to $9.2 billion
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$5.1 billion from 2012-2013 and $4.1 billion carryover from prior year
Proposes over $10 billion in revenue, expenditure and other
actions to address the deficit and leave a reserve of $1.1 billion
Budget Balancing Actions
(In millions)
Revenue Changes: Increase in income tax for those making over
$250K & 0.5% sales tax increase through voter initiatives, make
permanent the tax on Medi-Cal managed health care plans, & other
revenue actions
Increased Prop 98 costs due to proposed tax increase
($7,186)
$2,534
Expenditure Changes: Restructuring CalWORKs, deferring Medi-Cal ($3,987)
provider payments, adjustments to Prop 98, Changing the Cal Grant
awards amounts and GPA requirements, other health & human
service reductions and fund shifts
Other Actions: Delaying loan payments to special funds, borrowing
from disability insurance to pay Federal UI loans, & other actions
TOTAL
($1,432)
$10,070
2012-2013 Higher Education Impact
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Package includes $4.8 billion in “triggers” to K-12 & higher
education if November tax package is not approved
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Includes a tax package to raise sales tax by 0.5% from January 1, 2013 to
December 31, 2016
Also includes raising personal income tax on those making over $250K from
2012-2016
 LAO debates the Governor’s estimates stating that there is volatility.
Estimates only $4.8 billion of the Governor’s $6.9 billion estimate
Includes a categorical consolidation block grant, except for DSPS,
TTIP and Foster Care Education (even though BOG adopted student
success task force recommendations to not consolidate these
programs)
Reduces the Cal Works program & other significantly by $2 billion
Restructures the Cal Grants program by changing the award from
$13K to $4K and the GPA requirements for Cal Grant A from 3.0 to
3.25, Cal Grant B from 2.0 to 2.75 and from transfer students from
2.4 to 2.75. Estimating savings is $301 million
Redevelopment Agencies
Redevelopment Agencies:
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On December 31, 2011, California Supreme Court upheld ABX1
26 & 27 eliminating redevelopment agencies
Will be replaced by “Successor Agencies” to ensure LEAs are still
receiving entitlements such as: all pass-through payments
including AB 1290, SB 211, Other Statutory, 2% and passthrough agreement payments. 7 Member Agency make up:
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County Board of Supervisors
Mayor for the city that formed the RDA
Largest special district
County Superintendent of Schools
Chancellor of the California Community Colleges
Member of the public appointed by County Board of Supervisors
Former employee of the RDA
Governor proposes cutting $146.9 million in general fund
apportionment as a result of expected increased property taxes
from the elimination of redevelopment agencies.
2012-2013 Community College Scenarios
SCENARIO B
SCENARIO A
• $218 million deferral buyback (no new funds)
• $12.5 million in mandates
block grant
• Will give community colleges
4% each out year beyond
2012-13 through 2016 (not sure
•
$264 million base cut
workload reduction %
• Scenario A becomes obsolete
how that will be allocated, deferrals, growth,
COLA?)
Categorical Consolidation will occur in Both
Scenarios = $411.6 million
2012-2013 State Budget Webinar, January 11, 2012
2011-2012 Updates
January triggers pulled:
Tier 1 & 2 pulled with a few changes
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Tier 1 was expected to be a workload reduction to Antelope
Valley College of 67.71 FTES. Now it’s a deficit-co-efficient
Tier 2 reduced base to 10,502.07 FTES
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Borrowed 29 FTES from Summer 2011 to make base in 2010-2011. P1
estimates are at roughly 10,538 FTES.
Student fees shortfall even greater than originally estimated.
Was $25 mil now $100 mil, which means added deficit coefficient
Student fees went up from $36 per credit unit in the Fall
2011
Student fee increase of $46 per credit unit effective in the
Summer 2012 as opposed to Spring 2012
Figures will not be available until the P1 report is issued
around the end of January/beginning of February
2011-2012 New Basic Allocation Thresholds
With the original $313 million workload reduction to Community
College, the basic allocation thresholds were also reduced
Districts
Was
Now
Small College FTES Threshold
< = 10,000
< = 9,379
Medium College FTES Threshold
> 10,000
and
< = 20,000
> 9,379
and
< = 18,757
> 20,000
> 18,757
Large College FTES Threshold
Grandfathered Centers
Was
> 750
> 500
> 250
< 250
Now
> 703
> 469
> 234
< = 234
2011-2012 Estimated Actuals
Beginning Fund Balance
Revenues
Expenditures
$ 8,766,920
$56,000,828*
$58,019,135
Ending Fund Balance
$ 6,748,612
Surplus/(Deficit)
Reserve %
$ (2,018,307)
11.63%
•Includes anticipated prior year recalculations and mid-year cuts
• Includes estimated deficit co-efficient and student fee increase of 2.4%. Will not have figure until the P1 at the end of
January/ beginning of February. Potential property tax shortfall not included in these figures.
•This presentation contains estimates. For budget planning purposes ONLY.
Budget Risks
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Budget triggers geared to education if tax package
does not pass
LAO estimates only $4.8 billion of the $6.9 billion in
tax revenues due to higher earner income volatility
5.56% workload will not be decided until after
November 2012, making reductions difficult since it’s
the middle of the fiscal year
Property tax shortfalls are likely, especially due to
RDA dissolution
50% Law implications
2012-2013 State Budget Webinar, January 11, 2012
2012-2013 AVC Budget Development
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Staffing needs for TAF, H&S building, faculty
retirements, etc.
Step and Column increases
No election costs in 2012-2013, but will have
in 2013-2014
Other expenditure increases unknown, STRS?
3 Year Projection-Taxes Pass
Scenario A
2012-13
2013-14
2014-15
Beginning Fund Balance
6,748,612
6,831,682
6,219,777
Revenue
57,283,912
57,283,912
57,283,912
Expenditures w/o add’l
staffing
56,825,691
57,501,909
57,643,142
Additional Staffing
375,151
393,908
413,603
Ending Fund Balance
6,831,682
6,219,777
5,446,943
Surplus/(Deficit)
83,070
(611,905)
(772,833)
Reserve %
11.94%
10.74%
9.38%
Base FTES
10,502.07
10,502.07
10,502.07
50 % Law Compliance
52.34%
~52.02%
~53.32%
(1-18-12)
•Includes anticipated prior year recalculations and mid-year cuts
•This presentation contains estimates. For budget planning purposes ONLY.
• 4% in 2013/14-2015/16 breakout not explained. Could deferral buy-back.
3 Year Projection-Taxes Do Not Pass
Scenario B
2012-13
2013-14
2014-15
Beginning Fund Balance
6,748,612
4,987,499
2,532,077
Revenue
54,617,004
54,617,004
54,617,004
Expenditures w/o add’l
staffing
56,002,966
56,678,517
56,819,076
Additional Staffing
375,151
393,908
413,603
Ending Fund Balance
4,987,499
2,532,077
(83,599)
Surplus/(Deficit)
(1,761,113)
(2,455,422)
(2,615,676)
Reserve %
8.85%
4.44%
(0.15%)
Base FTES with 5.56%
reduction
9,917.66
9,917.66
9,917.66
50 % Law Compliance
51.58%
~50.98%
~51.1%
•Includes anticipated prior year recalculations and mid-year cuts
•This presentation contains estimates. For budget planning purposes ONLY.
2012-2013 Budget Timeline
Jan – May: Legislative Hearings
End of Jan 2012: LAO releases budget analysis
Mar 1: DOF requests legislative action early on
certain items-to include CCC redevelopment
offset
May 14: Governor releases May revise
June 15: Constitutional deadline for Legislature
to send budget to Governor
Nov 6: General Elections
Jan 1, 2013: Trigger reductions take effect if
revenue targets are not met
2012-2013 State Budget Webinar, January 11, 2012
Questions?