The Governor estimates a $22.5 billion budget shortfall, which is close to the Legislative Analyst’s Office estimate, at $24 billion. The Governor proposes a mix of solutions to address the estimated shortfall, including delaying $7.4 billion in expenditures to future years, most of which are capital expenditures to which the Governor is still committed, and reducing expenditures by $5.7 billion. The Governor does not propose to draw from the state’s $35.6 billion in accumulated budgetary reserves to close the anticipated budget gap. These are preserved for use at the May Revision if the economic picture worsens.

The 2023-24 Proposition 98 minimum guarantee for K-12 and community colleges is $108.8 billion, about $1.9 billion above the amount estimated for 2022-23.

CCC Capital Outlay Program

The budget includes $143.8 million in 2023-24 for 10 continuing community college capital outlay projects. It does not propose to fund any new start projects.

• Chabot-Las Positas, Chabot College – Building 3000 Maintenance Operations Warehouse & Garage - $10.1 million
• Compton CCD, Compton College – Vision and Performing Arts - $12.5 million
• Desert CCD, College of the Desert – Science building Renovation - $6.9 million
• Grossmont-Cuyamaca CCD, Cuyamaca College – Instructional Building 1 - $15.9 million
• Los Angeles, Los Angeles Mission College – Plant Facilities Warehouse & Shop Replacement - $7.3 million
• Riverside CCD, Norco College – Center for Human Performance and Kinesiology - $28.6 million
• Shasta/Tehama/Trinity, Shasta College – Building 800 Renovation - $6.0 million
• Sierra Joint CCD, Sierra College – Applied Technology Center Modernization - $18.3 million
• Sierra Joint CCD, Sierra College – New Science Building - $27.5 million
• West Valley-Mission CCD, West Valley College – Theater Renovation/Expansion – $10.8 million

Student Housing

Prior budgets committed a total of $2.2 billion (one-time General Fund) for student housing construction grants over a three-year period, including $750 million planned for FY 2023-24. The Governor’s budget proposes delaying $250 million of the anticipated 2023-24 support for affordable student housing projects to the 2024-25 fiscal year. This would maintain $500 million for student housing construction grants in 2023-24.

The 2022 Budget Act included intent language to provide $1.8 billion (one-time General Fund) over two years ($900 million in 2023-24 and $900 million in 2024-25) to establish a student housing revolving loan program for the three higher education segments. The budget proposes delaying the 2023-24 expenditure to 2025-26, and delaying $250 million from 2024-25 to 2025-26. This delay would result in no funding in 2023-24, $650 million in 2024-25, and $1.15 billion in 2025-26.

Deferred Maintenance

The budget includes a decrease of $213 million (one-time Proposition 98 General Fund) for deferred maintenance needs. The 2022-23 budget provided $840.7 million General Fund for community college deferred maintenance. It appears this decrease applies to the FY 22-23 amount, creating a revised allocation of $627.7 million in FY 22-23, with no deferred maintenance funding proposed in FY 23-24. CCFC is in the process of verifying this proposal.

Monitoring Community College Enrollment

The Governor’s budget indicates that community college headcount enrollment has dropped by over 16 percent since the beginning of the COVID-19 pandemic, mirroring a national trend of declining enrollment for higher education and community colleges in particular. The budget includes an additional $200 million (one-time Proposition 98 General Fund) to support community college efforts and focused strategies to increase student retention rates and enrollment. This builds upon an investment of $150 million in 2022 and $120 million in 2021. The budget indicates that the Administration will be monitoring district-level enrollment trends and will work with stakeholders to consider options to adjust district budgets should they not display that they are regaining enrollment entering the 2024-25 academic year.

Other CCC Issues

• CCC Roadmap – The budget reflects the second year of the multi-year roadmap. The Administration intends to introduce a mechanism as part of the May Revision to provide community college districts that are making progress toward the CCC roadmap goals with additional categorical program spending flexibilities, and the ability to consolidate reporting requirements across to-be-determined categorical programs.
• Dual Enrollment – The Administration requests community colleges establish dual enrollment agreements with all applicable local educational agencies within their community college districts’ service area if they have not done so already.
• CCC Apportionments and Categorical Programs – The budget includes an increase of $652.6 million (ongoing Proposition 98 General Fund) to provide an 8.13% cost-of-living (COLA) adjustment for Student Centered Funding Formula apportionments, and an increase of $92.5 billion (ongoing Proposition 98 General Fund) to provide an 8.13% COLA for select categorical programs and the Adult Education Program. The budget includes $28.8 million (ongoing Proposition 98 General Fund) for 0.5 percent enrollment growth.

Next Steps

This budget is a starting point for negotiations between the Administration and the Legislature. The Legislature will review the Governor’s budget proposal, holding budget subcommittee hearings over the coming months. The Governor will update his budget proposal in May to reflect updated revenue projections based on income tax receipts. The Legislature will work to meet a constitutional deadline of adopting a budget by June 15.

Rebekah Kalleen
CCFC Executive Director