Budget_update_MC_All_College_2012-09-21x

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Transcript Budget_update_MC_All_College_2012-09-21x

Sept 21, 2012
Mission College All College Forum
Presented by: Rick Bennett, VP Admin Services
Agenda
 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
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
Economic Climate--National to State
 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% 3rd highest in nation
 Worst state for business
 Education system decline
 CA Positive signals
 Six months of rising home prices
State 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
State Budget…
Cuts of $8.1B
Revenue increase of $6B
Shifts, payment delays $2.5B
Total Budget still $11B below 07-08
District 2012/13 budget
 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
 Mission’s component is $600,000.
District 12/13 budget
 $103M General Fund
 Unrestricted $89M
 Restricted $13M
Mission--Total Budget 2009-2012
$44.34
$45.00
$42.85
$42.39
$43.03
$40.00
$35.00
Fund 100 in $M
Total in $M
$30.97
$29.65
$30.05
$30.00
$28.53
$25.00
$20.00
$15.00
$10.00
$5.00
$-
2009-10 2010-11
2011-12
2012-13
WVM District 2012/13 Overhead and Fixed Costs
District Services
$
910,000
District Wide Cost
$ 13,900,000
Mission College
$
West Valley College
$ 1,000,000
Total Fixed Costs
$ 16,580,000
770,000
 Fixed Costs –District and College Overhead,
including certain salaries, benefits, software,
utilities, legal expenses, retiree benefits, etc…
Associate Faculty Expenditures
Budgeted vs. Actual
Fiscal
Total
Year
Budgeted $
Reduction
Budget
Actual Spend
Variance
10/11 $ 5,267,754 $
$ 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
???
???
Nov 6--Prop 30 and Prop 38
Tax Initiatives on Ballot
 CCC’s are held hostage
 Polls show Prop 30 leading with
uncomfortable majority
 51-52%
 Prop 38 at 38% for K12 only
 Competing initiatives
2012/13 Assumptions
 No reduction to base revenues
 SB 361 still in place…for 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
If Prop 30 Passes
 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 does not pass…
 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 CCC’s will face
Automatic Budget Reductions Mid Year
If Prop 30 does not pass…
 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
Mission—546 FTES
7.3%
2012/13 District Shortfall if Tax Fails
Projected Available Funding
$3.6M Budget Reduction
$1.7M Additional Assoc. Faculty
Reduction
Locally Funded or Basic Aid
“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.”
If Prop 30 passes, WVM estimate 2 years to
Locally Funded or Basic Aid
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
If Tax Initiative fails WVM backs into Locally
Funded or Basic Aid Status in 2012/13
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
2013/14 Shortfall Planning
Still in the woods either way
Tax Passes:
Tax Fails:
$1.5M One Time Carryover
$5.1M One Time Carryover
$1.0M Step/Column/Longevity
$1.0M Step/Column/Longevity
$1.5M Bargaining Restoration
$1.5M Bargaining Restoration
$3.5M shortfall
$7.6M shortfall
Projected Available Funding
Projected Available Funding
$2-2.5M Budget Reduction
$3.0M Budget Reduction
$1.5M LandCorp Funding
$1.5M LandCorp Funding
$1.6M One time/Prop tax increase
+$1.5M LandCorp
Student Success…yes a pop quiz
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 Success…
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…
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
Rise Up
Positive Signs in economy—GDP 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
Links
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