Transcript California’s Budget: Choices Amid Crisis

State Budget Update
Presented by:
Bryan Ha
Director of Membership and
Faculty Advocacy
CA Community Colleges at a
Glance
• The largest system of higher education in
the nation composed of 72 districts and
112 colleges serving 2.7 million students
per year.
• 18,299 full-time faculty
• 42,449 part-time faculty
THE BUDGET IS ABOUT PRIORITIES:
Where should the State Spend its Money?
Prisons
Higher Education
2009/10 Academic Year
• CA Community Colleges sustained $520
million in budget cuts which equates to
roughly 8 percent of its overall budget.
2009/10 Budget Impact
• The cuts resulted in a greater number of
students squeezing into fewer classes and
waitlisted seats soaring in to the
thousands.
How Do You Feel About
California’s Budget Process?
“California’s budget isn’t just broke, it is
broken.”
2010/11 Budget Breakdown:
• On October 8, 2010, Gov.
Schwarzenegger signed the newly
approved $87.5 billion state budget, but
vetoed $962 million in spending.
• The action officially
ended the 100-day
standoff with lawmakers.
2010-11 Enacted Budget
Solutions
Solutions
Expenditure Reductions $8,387.9
Federal Funds
$5,403.2
Other Solutions
$5,483.2
43.6%
28.0%
28.4%
$19,274.3 100.0%
Dollars in Millions
2010-11 Revenue Sources
(Dollars in Millions)
Personal Income Tax
Sales Tax
Corporation Tax
Highway Users Taxes
Motor Vehicle Fees
Insurance Tax
Estate Taxes
Liquor Tax
Tobacco Taxes
Other
Total
General Special
Fund
Funds
$47,127
$940
27,044
4,057
10,897
5,534
1,490
5,368
2,072
163
782
331
94
796
4,393
9,064
$94,230 $25,922
Change
From
Total 2009-10
$48,067 $2,517
31,101
69
10,897
1,622
5,534
2,419
6,858
174
2,235
-33
782
782
331
7
890
-21
13,457
503
$120,152 $8,039
2010-11 Revenue Sources
(Dollars in Billions)
2010-11 Total Expenditures by Agency
(Dollars in Millions)
Agency
General
Funds
Special
Funds
Bond
Funds
Legislative, Judicial, Exec.
$3,149
$2,875
$434
$6,458
State and Consumer Serv.
598
748
24
1,370
Business, Trans. & Housing
905
7,304
4,294
12,503
2,108
2,427
849
5,384
Environmental Protection
77
1,101
294
1,472
Health & Human Services
26,346
11,157
174
37,677
8,931
48
1
8,980
K-12 Education
36,079
81
684
36,844
Higher Education
11,490
36
1,095
12,621
58
383
-
441
General Government
-3,189___
4,691_
Total
$86,552
Natural Resources
Corrections & Rehabilitation
Labor & Workforce Dev.
$30,851
2__
$7,851
Totals
-1,504
$125,254
2010-11 SPENDING
Where Do We Spend Our Money?
2011 Budget Breakdown
• In January, the Administration has
proposed cutting the community college
budget by $400 million.
• It has offered to restore $110 million if the
Legislature raises student fees by 38%.
• Student Fee Increase: $26 to $36 per
unit.
2011 May Revision Scare
• Because the Governor and legislative
leaders failed to reach an agreement on
the tax extension, Legislators considered
an additional reduction of $685 million and
shutting the doors on 400,000 students.
• Student fees at $66 per unit
• Elimination of state-funded repetition of physical
ed. and fine arts credits
• Downgrading faculty minimum qualifications for
basic skills courses
2011 May Revision Surprise
• Due to an unexpected increase of $6.6
billion in state revenues, COMMUNITY
COLLEGES and K-12 would receive an
additional $1.6 billion under the
Governor’s plan.
Specifically, community colleges
would receive:
• Increase in $350 million apportionment
funding to reduce the level of deferral by a
like-kind amount (from $961 to $611
million)
• Increases in property tax revenues of
$57.8 million in 2010-11 and $75.1 million
for 2011-12
HOW DID WE GET HERE?
General Fund Spending Growth
 $45.8 Billion in Total Growth
 $31.2 B of total growth due to inflation and
population growth.
 Population growth 16.8% since 1998 (5,490,616 people)
 Inflation has been 37.2% over the decade
 $6 billion to backfill Vehicle License Fee reduction
HOW DID WE GET HERE?
Tax Cuts
 We Chose to Cut Taxes:
 Dependent Credit Increase (1997)
$1.4 B
 Seniors Property Tax Assistance (2000)
$154 M
 Eliminating “Tractor Tax” (2001)
$127 M
 Elimination of Inheritance Taxes by Feds
$1.8 B
 Budget Deal Corporate Tax Loopholes (2008)
 Budget Deal Single Sales Factor (2009)
$900 M
$1.5 B
TOTAL $5.9 B
WHO PAYS?
Who Benefits?
Spending
 Top 20 counties in per
capita spending
Taxes
 Top 20 counties in per
capita revenues collected
2008-2011
Economic Meltdown
DYSFUNCTION BUILT RIGHT IN
Majority Does Not Rule
 Who can name these 3 States?
 What do these States have in common?
DYSFUNCTION BUILT RIGHT IN
Paying the Piper: Cost of the 2/3 Budget Vote
 Major Policy Changes: e.g. Open Primary
 Borrowing and One-Time Fixes
 Pork: e.g. Italian-American Culture Center
DYSFUNCTION BUILT RIGHT IN
Skews Budget Priorities
In 2009-10 Fiscal Year, California Spent:
 $435 per child enrolled in Healthy Families.
 $1,408 per participant enrolled in CalWORKS
 $3,721 per student enrolled in community college
 $5,707 per child in our foster care system
 $6,612 per student enrolled at CSU
 $7,806 per child in K-12 education
 $12,756 per student enrolled in UC
 $46,000 per prison inmate
 $248,000 per incarcerated youth
Per-Student Funding by
Education System, 2009-10
• (amounts include state General Fund, local property tax,
student fee revenue, and federal stimulus funding, but
not STRS or lottery funds.)
•
•
•
•
K–12
$7,957
California Community Colleges (CCC)$5,376
California State University (CSU)
$11,614
University of California (UC)
$20,641
Source: LAO, The 2010-11 Budget, pg. HE-3
DYSFUNCTION BUILT RIGHT IN
Skewing Our Priorities
WINNER!
LOSER!
 Prisons
 Higher Education
 Corrections has
increased by 8.5%
annually over last decade
($5.4 billion)
 CCC, UC, CSU suffered
bulk of the budget cuts
and are always on the
chopping block
DYSFUNCTION BUILT RIGHT IN
Skewing Our Priorities
WINNER!
LOSER!
 Corporations
 Lowest Income Families
 Share of Corporate
Income Taxes has fallen
by nearly half since 1981
 Pays the largest share of
income for State and
Local Taxes
DYSFUNCTION BUILT RIGHT IN
Making Politically Difficult Choices Impossible
 Grover Norquist
Pledge
 Term Limits
FIXING THE PROBLEM
Spending: Restoring CA’s Fiscal Health
 Budget Reserve
 Paying off debt
 Health Care reform
 Public Safety and Corrections reform
FIXING THE PROBLEM
Revenue: Reversing the Loopholes
Revenue
 Close Special
Interest Loopholes
and past tax
giveaways
 Let local voters
raise their own local
taxes for local
services by a
majority vote.
FIXING THE PROBLEM
Don’t Stop Thinking About Tomorrow
 Extend Term Limits
 Pay as you go
Initiatives
FIXING THE PROBLEM
Other Reform Ideas
 Spending Caps
 Two Year Budget
 Performance-Based Budgeting
 Part Time Legislature
How you can help
• JOIN FACCC – FT Faculty Dues
$18/month
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membership
• Only YOU can provide us with leverage as
we lobby on your behalf
• Hold Legislators accountable
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