Nov 20, 2012 Mission College

Presented by: Rick Bennett, VP Admin Services

Rocky Ground--National Perspective

 Dec 2007 Great Recession  Most severe economic decline-Great Depression  Downgraded US debt  Officially over July 2009-hard times keep coming  Economy slow to recovery- 1st Qtr. Growth  2010 3.9% 2011 0.4% 2012 1.9%  Public sector continues to shrink  Economy needs private sector employment to rebound; tax revenues will lag

State 2012/13 Budget…

 Assumes approval of Nov 6 Prop 30 tax initiative to raise new revenues  0.25% increase in Sales tax for 4 years  Increase in personal income tax for wage earnings in excess of $250K for 7 years  Total State Budget will still be $11B below 2007-08

2012/13 Budget Assumptions

 SB 361 still in place…for now 

Hold harmless from shortages in Redevelopment Authority (RDA) Revenues

 Meet FON and 50% Law  Funding for 310 FTEF  Cash flow is a trickle in 2012/13 FY  No COLA (last COLA was 2007-8)  No policy changes to categorical programs  Mandate Block Grant ($28 per FTES in lieu of claims)

District 2012/13 budget  Part of a 3 year recovery plan from 11/12 cuts  Shortfall--revenues $6M less than Budget   Ongoing 3 year recovery plan $3M reduction plan  $1.5M new revenues Land Corp  Reductions in Associate Faculty  Mission’s component is $600,000.  3.5% salary concessions and furloughs from all MC staff—Faculty in negotiations

With Prop 30 Passage

 Ca. Community College System  Gains $50 M to restore portion of FTES lost in last 4 years  $160M in deferral repayments from the state  Decrease obligation from $961M to $801M  District Workload Increases 141 FTES ($640K)  Mission 65 FTES

2013/14 Shortfall Planning Still in the woods even with Prop 30 • • • Tax Passes Minimum$2.5M shortfall earlier cuts $1.5M to restore bargaining concession $1.0M for salary, benefits & operational cost increases • • Recovery Plan $1.0 Budget Reductions $1.5M Continuing WVM LandCorp Funding

Risky Budget for 12/13 and 13/14  Snakes in the Grass  Redevelopment Authority (RDA) shortfall  $340M owed to the System  Potential delays and litigation  Potential 2013 mid year cuts if state doesn’t increase tax revenues

Positive News

• LAO report of 11/12/12 • showed decrease in State’s budget deficit from $13B to $1.9B

• Potential relief for community colleges in 13/14 and 14/15 when combined with Prop 30 revenues

Prop 39 passed by 60% margin

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Tax Treatment for Multistate Businesses. Clean Energy and Energy Efficiency Funding. Education.

• • Potential additional State Revenue for CCC’s May mean $25-50m per year for the CCC system over 4 years and $100m or more per year after 4 years