Sept 21, 2012 Mission College All College Forum Presented by:
Rick Bennett, VP Admin Services
Slide 3
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
Slide 4
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 Rocky
Ground--National Perspective
Slide 5
US GDP near term weak, mirroring last two years GDP growth 2.4%
by the end of 2013 Increasing to 3.4% in 2014 US-- 2013
unemployment anticipated 7.7% Real Main Street problem--inadequate
workforce development for 21st century labor markets CA-- 10.8% 3
rd highest in nation Worst state for business Education system
decline CA Positive signals Six months of rising home prices
Economic Climate--National to State
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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 State Budget
Slide 7
Cuts of $8.1B Revenue increase of $6B Shifts, payment delays
$2.5B Total Budget still $11B below 07-08 State Budget
Slide 8
Projected 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 ACE Reductions $1.3M in Associate Faculty Missions
component is $600,000. District 2012/13 budget
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$103M General Fund Unrestricted $89M Restricted $13M District
12/13 budget
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Mission--Total Budget 2009-2012
Slide 11
WVM District 2012/13 Overhead and Fixed Costs District 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
Slide 12
Associate Faculty Expenditures Budgeted vs. Actual
Slide 13
CCCs are held hostage Polls show Prop 30 leading with
uncomfortable majority 51-52% Prop 38 at 38% for K12 only Competing
initiatives Nov 6--Prop 30 and Prop 38 Tax Initiatives on
Ballot
Slide 14
No reduction to base revenues SB 361 still in placefor now
Mandate Block Grant ($28 per FTES in lieu of claims) Full hold
harmless from shortages in RDA Revenues Cash flow is a trickle in
early 2012 FY No COLA (last COLA was 2007-8) No policy changes to
categorical programs Additional COSTS-unfunded reporting
requirements 2012/13 Assumptions
Slide 15
CCC 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 reductions If Prop 30 Passes
Slide 16
State 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 pass
Slide 17
More drastic Trigger Cuts than 11/12 Lose $50M in restoration
Lose $160M in deferral buy down System wide base apportionment
Reduction $338M $5.3 M Funding Reduction to District 1161 FTES
Workload Reduction Mission546 FTES 7.3% If Prop 30 does not
pass
Slide 18
2012/13 District Shortfall if Tax Fails Projected Available
Funding $3.6M Budget Reduction $1.7M Additional Assoc. Faculty
Reduction
Slide 19
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 Aid
Slide 20
The Bucket Analogy 2012/13 funding formula, District receives
$5.4M in state apportionment When local property tax/student fees
exceed $5.4 in apportionment, enter Basic Aid
Slide 21
Lowest level of funding in last 5 years Long term
effect--Stable Funding Local property tax is the source No State
Apportionment Light 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 2012/13
Slide 22
Tax Passes: $1.5M One Time Carryover $1.0M
Step/Column/Longevity $1.5M Bargaining Restoration $3.5M shortfall
Projected Available Funding $2-2.5M Budget Reduction $1.5M LandCorp
Funding 2013/14 Shortfall Planning Still in the woods either way
Tax Fails: $5.1M One Time Carryover $1.0M Step/Column/Longevity
$1.5M Bargaining Restoration $7.6M shortfall Projected Available
Funding $3.0M Budget Reduction $1.5M LandCorp Funding $1.6M One
time/Prop tax increase +$1.5M LandCorp
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1.Total budget for Mission College? 2.District General Fund
Budget? 3.Will the District become Basic Aid? Describe 1 of 2
scenarios 4.How much did the Associated Faculty Budget decline from
2011/12? Why did it decline? 5.Are we out of the woods in 2013/14?
Student Successyes a pop quiz
Slide 24
1.Total budget for Mission College? $44.3M 2.District Budget
General Fund? Unrestricted $89M; restricted $13M. Total $102 M
3.Will the District become Basic Aid? Describe 1 of 2 scenarios
Yes, if Brown tax passes, 2 years; If Brown tax fails, immediately
2012-13 Student Success
Slide 25
4.How much did the Associated Faculty Budget decline from
2011/12? Why did it decline ? $600K Reduction to help balance 2012
budget 5.Are we out of the woods in 2013/14? No, with Prop 30
passage or without Student Success
Slide 26
Positive Signs in economyGDP 2014 Economist Steve Levy reported
that half of all USA job growth in May 2012 was in CA Prop 30 Tax
Initiative Increased Funding with passage Basic Aid in two years
Silver lining with failure in the mid term Basic Aid this fiscal
year Stable Funding Chance to grow with local tax increases over
time Rise Up
Slide 27
Learn more about Prop 30
http://ballotpedia.org/wiki/index.php/California_Proposition_30,_Sal
es_and_Income_Tax_Increase_(2012) Prop 30 latest polls
http://www.excellence.dgs.ca.gov/CostEffectiveness/S2_2-5.htm Link
to this presentation: P:\MC Administrative Services\Training and
Presentations Rocky Ground
http://www.youtube.com/watch?v=Uy30aOR0rYk Links