Associate Faculty and Account Codes Training

Sept 21, 2012 Mission College All College ForumPresented by: Rick Bennett, VP Admin Services

Mission College Budget

Fall 2012 Update

National & State Context

State of the District & College: 2012/13 the most difficult budget year

November 6 & Mission College budget?

2013/14-- a peak ahead

Agenda

Dec 2007 Great RecessionMost severe economic decline-Great DepressionDowngraded US debtOfficially over July 2009-hard times keep comingEconomy slow to recovery- 1st Qtr. Growth 2010 3.9% 2011 0.4% 2012 1.9%Public sector continues to shrinkEconomy needs private sector employment to rebound, tax revenues will lagRocky Ground--National PerspectiveUS GDP near term weak, mirroring last two years GDP growth 2.4% by the end of 2013Increasing to 3.4% in 2014 US-- 2013 unemployment anticipated 7.7% Real Main Street problem--inadequate workforce development for 21st century labor marketsCA-- 10.8% 3rd highest in nationWorst state for businessEducation system declineCA Positive signalsSix months of rising home pricesEconomic Climate--National to StateAssumes approval of Nov 6 Prop 30 tax initiative to raise new revenues

0.25% increase in Sales tax for 4 yearsIncrease in personal income tax for wage earnings in excess of $250K for 7 yearsState BudgetCuts of $8.1BRevenue increase of $6BShifts, payment delays $2.5B

Total Budget still $11B below 07-08State BudgetProjected revenues $6M less than Unrestricted General Fund Budget $5M one-time funding carry-over $1M step/column and benefit increases. Mitigate the shortfall--$3M reduction plan $1.5M new revenues Land Corp 3.5% salary concessions from all units placeholder for ACEReductions $1.3M in Associate FacultyMissions component is $600,000.

District 2012/13 budget$103M General Fund Unrestricted $89MRestricted $13M

District 12/13 budget

Mission--Total Budget 2009-2012WVM District 2012/13 Overhead and Fixed CostsDistrict Services $ 910,000 District Wide Cost $ 13,900,000 Mission College $ 770,000 West Valley College $ 1,000,000 Total Fixed Costs $ 16,580,000 Fixed Costs District and College Overhead, including certain salaries, benefits, software, utilities, legal expenses, retiree benefits, etc

Associate Faculty Expenditures Budgeted vs. Actual

11CCCs are held hostagePolls show Prop 30 leading with uncomfortable majority 51-52%Prop 38 at 38% for K12 onlyCompeting initiatives

Nov 6--Prop 30 and Prop 38Tax Initiatives on Ballot No reduction to base revenuesSB 361 still in placefor nowMandate Block Grant ($28 per FTES in lieu of claims)Full hold harmless from shortages in RDA RevenuesCash flow is a trickle in early 2012 FYNo COLA (last COLA was 2007-8)No policy changes to categorical programsAdditional COSTS-unfunded reporting requirements

2012/13 AssumptionsCCC System$50 M restoration $160M in deferral buy down $961M to $801M District Workload Increases 141 FTES Mission 65 FTES

Snake in the Grass: Expect mid year reductionsIf Prop 30 PassesState triggered reductions --$6B in total cuts$5.4B in Prop 98$250M --UC and CSU each$50M -- Developmental Services$40M -- Police/Forestry/Fire $17.6M -- other programs

Second consecutive year that CCCs will face Automatic Budget Reductions Mid Year

If Prop 30 does not passMore drastic Trigger Cuts than 11/12Lose $50M in restorationLose $160M in deferral buy downSystem wide base apportionment Reduction$338M $5.3 M Funding Reduction to District1161 FTES Workload ReductionMission546 FTES7.3%

If Prop 30 does not pass2012/13 District Shortfall if Tax FailsProjected Available Funding$3.6M Budget Reduction$1.7M Additional Assoc. Faculty Reduction

A community college or K-12 district that does not receive state funds because its revenues from local property taxes and student fees provide more than it would receive under state formulas.

Locally Funded or Basic Aid

If Prop 30 passes, WVM estimate 2 years to Locally Funded or Basic AidThe Bucket Analogy2012/13 funding formula, District receives $5.4M in state apportionment When local property tax/student fees exceed $5.4 in apportionment, enter Basic Aid

Lowest level of funding in last 5 yearsLong term effect--Stable FundingLocal property tax is the sourceNo State ApportionmentLight at end of tunnel, but up to 5 years to climb out of the hole

If Tax Initiative fails WVM backs into Locally Funded or Basic Aid Status in 2012/13Tax Passes: $1.5M One Time Carryover $1.0M Step/Column/Longevity$1.5M Bargaining Restoration$3.5M shortfallProjected Available Funding$2-2.5M Budget Reduction$1.5M LandCorp Funding

2013/14 Shortfall PlanningStill in the woods either wayTax Fails: $5.1M One Time Carryover $1.0M Step/Column/Longevity$1.5M Bargaining Restoration$7.6M shortfallProjected Available Funding$3.0M Budget Reduction$1.5M LandCorp Funding$1.6M One time/Prop tax increase+$1.5M LandCorp

Total budget for Mission College? District General Fund Budget?Will the District become Basic Aid? Describe 1 of 2 scenarios How much did the Associated Faculty Budget decline from 2011/12? Why did it decline? Are we out of the woods in 2013/14?

Student Successyes a pop quizTotal budget for Mission College? $44.3MDistrict Budget General Fund? Unrestricted $89M; restricted $13M. Total $102 MWill the District become Basic Aid? Describe 1 of 2 scenarios Yes, if Brown tax passes, 2 years; If Brown tax fails , immediately 2012-13Student SuccessHow much did the Associated Faculty Budget decline from 2011/12? Why did it decline? $600KReduction to help balance 2012 budgetAre we out of the woods in 2013/14?No, with Prop 30 passage or without

Student SuccessPositive Signs in economyGDP 2014Economist Steve Levy reported that half of all USA job growth in May 2012 was in CAProp 30 Tax InitiativeIncreased Funding with passageBasic Aid in two yearsSilver lining with failure in the mid termBasic Aid this fiscal yearStable Funding Chance to grow with local tax increases over timeRise UpSenior Economist of the Center for Continuing Study of the California Economy (CCSCE) 25Learn more about Prop 30http://ballotpedia.org/wiki/index.php/California_Proposition_30,_Sales_and_Income_Tax_Increase_(2012) Prop 30 latest pollshttp://www.excellence.dgs.ca.gov/CostEffectiveness/S2_2-5.htm

Link to this presentation:P:\MC Administrative Services\Training and Presentations

Rocky Groundhttp://www.youtube.com/watch?v=Uy30aOR0rYk

LinksRocky GroundBruce SpringsteenWrecking Ball, track 9/13, disc 1/12012Rock280783.66eng - iTunPGAP0eng - iTunNORM 00000767 00000874 00005AF3 000050C3 00039B0F 000390C1 000086B2 00008690 00009A97 0001F5A1eng - iTunSMPB 00000000 00000210 000007D4 0000000000BCE41C 00000000 00AB3CBC 00000000 00000000 00000000 00000000 00000000 00000000eng - iTunes_CDDB_IDs13++Sheet1Fiscal YearBudgeted $ReductionTotal BudgetActual SpendVariance10/11$5,267,7540.0$5,267,754$6,135,714$(867,960)11/12$4,959,699$(177,002)$4,782,697$5,992,791$(1,210,094)12/13$4,670,249$(600,944)$4,069,305 ??? ???