The Cold Hard Truth About the Budget--and How it Could Affect WLAC

I've been asked to sort out all the rumblings around COVID-19 as they relate to West; in effect, to go into more depth than the conversations at our Town Halls.  So here's the items that are going to affect us as a campus over the coming months--and, most, likely, years.  Please remember that after the recession of 2008, for example, it took almost ten years to get unemployment rates pre-2008 levels, and some pundits predict that the rebound from the pandemic may take as long as two years.

So, armed with that bit of sobering information, I offer some details as I understand them regarding what West can expect over the next several months.  In this blog, I'll focus on the budget.

Obviously, the dire situation California is faced with its budget affects every resident.  To fully elaborate, I'm providing direct quotes here from a report submitted to the Board of Trustees by Strategic Education Services, a lobbying firm retained by the District.  This is somewhat long, and a
little dense, but I encourage you to review in its entirety. Some of this information, by the way, is an elaboration on my May 13 posting.

Personal income is projected to decline by 9 percent in 2020; in 2023, personal income is expected to return to the 2019 level of $2.6 trillion – $470 billion or 15 percent below the level expected in the
Governor’s Budget.

"This revenue drop, combined with increased health care costs, and costs associated with addressing
COVID-19, has caused a projected budget deficit of approximately $54 billion before the changes
proposed in the Governor’s May Revision. Without the Governor’s May Revision budgetary actions, the Governor projects out-year structural deficit to reach approximately $45 billion annually." 

As for the impact on community colleges, the May revision of the budget "proposes statutory changes to provide districts flexibility to adjust to the adverse impacts of the COVID-19 pandemic. The following changes are proposed:
● Student Fees. The CSU and CCC’s charge fees to support specific operating and/or enterprise
activities, such as campus health services, student parking, student housing, and meal services.
The May Revision proposes statutory changes to allow the three public segments to use
restricted fund balances [except lottery balances] to address COVID-19 related impacts and the
loss of revenue from enterprise functions.
● 50 Percent Law. Exempt direct COVID-19 related expenses incurred by districts from the 50
Percent Law. This would not include revenue declines.
● CTE. Suspend procedures regarding the development of short-term career technical education
courses and programs to expedite the offering of these programs and courses.
● Student Centered Funding Formula [SCFF] data:
     ---Reflect the revised 2019-20 Student Centered Funding Formula rates.
     ---Further utilize past-year data sources that have not been impacted by COVID-19 within
the SCFF.
● SCFF Hold Harmless. Extend the SCFF hold harmless provisions for an additional two years.
● SCFF Adjustments. Require reductions to the SCFF that are necessary to balance the budget to
be proportionately applied to all CCCs by reducing the Formula’s rates, stability, and hold
harmless provisions."

Of significance are the funds directly related to community colleges that have been stricken from the budget.
---$15 million one-time Proposition 98 General Fund for a faculty pilot fellowship program.
---$10 million one-time Proposition 98 General Fund for part-time faculty office hours.
---$10 million one-time Proposition 98 General Fund to develop and implement zero-textbook cost
---$5 million ongoing Proposition 98 General Fund to provide instructional materials for dual
enrollment students.
---$9.3 million ongoing Proposition 98 General Fund, of which $0.1 million is attributable to a
revised cost-of-living adjustment at the May Revision, for a 2.31 percent cost-of-living
adjustment for various categorical programs. 

The community college system will also face additional reductions if federal funds are not forthcoming in several key areas.
---$167.7 million for 2.31 Percent COLA (ongoing Proposition 98 General Fund)
---$31.0 million for Enrollment Growth (ongoing Proposition 98 General Fund)
---$83.2 million for Apprenticeship Initiative (ongoing Proposition 98 General Fund,  of which $40.4 million was one-time, for support of apprenticeship programs, the California Apprenticeship Initiative, and work-based learning models.  Please note that this does NOT affect WLAC's apprenticeship initiative, which is funded by a federal grant from the Department of Labor.)
---$593 million for Offset of SCFF Pro Rata Reductions. Decreasing available Student Centered Funding Formula, or roughly 10 percent when combined with a foregone cost-of-living adjustment. To maintain student access to CCCs, the Administration proposes a statute to proportionally reduce district allocations through adjustments to the Formula’s rates, stability provisions, and hold harmless provisions.
---$135.6 million for Strong Workforce (ongoing Proposition 98 General Fund)
---$68.8 million for Student Equity and Achievement Program (ongoing Proposition 98 General Fund)
---$7.3 million of Part-Time Faculty (ongoing Proposition 98 General Fund)
---$3 million for Calbright College (ongoing Proposition 98 General Fund)

How does this play out locally?  A possible budget reduction to the District of approximately $64 million--which is passed to all nine colleges and the District office. Conversations about how to address these challenges will be mounted throughout the District, from the Board level to the District Budget Committee, the Chancellor's Cabinet, and both district- and campus-based participatory governance entities.

I'll address other issues in the next blog post, including hard-to-convert classes, athletics, a burgeoning focus on workforce training and short-term courses, and the realities of possible program viability initiatives as a component of institutional differentiation.