Legislature Poised to Adopt Preliminary Budget & AB 247 Advances

AB 247 State School Bond Passed by Senate Education Committee

Today the Senate Education Committee unanimously passed AB 247, the state school bond bill, by a vote of 7:0. AB 247 is authored by Assembly Members Al Muratsuchi, Mike Fong, and Lori Wilson, and it would place a $14 billion bond on an unspecified 2024 ballot to support facilities for TK-12 schools and community colleges. AB 247 does not yet identify how much funding would be dedicated to community colleges.

This was the first hearing for AB 247 in the Senate. Senate Education Committee Chair Senator Newman asked on behalf of Senator Glazer why AB 247 does not include UC and CSU. Assembly Member Muratsuchi acknowledged the facilities needs of UC and CSU but indicated that his effort is driven by what voters are willing to support. Senator Glazer is authoring a separate bond bill, SB 28, which would place a $15.5 billion kindergarten through university bond on the March 2024 ballot. CCFC supports AB 247 and is neutral on SB 28.

Final details of the 2024 state school bond will be subject to negotiation between the Governor, Senate, and Assembly in the months to come. AB 247 will next be heard in Senate Governance and Finance Committee.

Legislature Poised to Adopt Their Version of the Budget

On Sunday night, the two houses of the Legislature announced that they would take action this week to approve their version of the FY 2023-24 budget. The Legislature must pass a budget by the constitutional deadline of June 15. Both the Senate and Assembly have planned floor votes tomorrow to meet this deadline, but the action does not reflect a final negotiated agreement with the Governor. One primary reason for the delay in a final budget is the uncertainty surrounding tax revenues. Due to winter storm emergencies, most Californians have the option to defer filing taxes until October 2023, making it more difficult to predict revenues.

The Legislature’s budget framework has been introduced in identical budget bills AB 101 and SB 101, and it recognizes a $30.7 billion deficit. The Legislature and Governor will continue to work beyond the June 15 deadline to finalize the budget, including additional budget bills and trailer bills to implement the budget. This work could continue over the coming days, weeks, and months.

Regarding community college facilities issues, we are still awaiting additional information in the form of proposed budget and trailer bill language. The Legislature has indicated that their version of the budget includes the following provisions related to community college facilities. It is unknown if these provisions will be included in the final budget negotiated between the Governor and Legislature, but the chance is high for those items that align with the Governor’s proposals.

Capital Outlay

Approves the Governor’s May Revision proposal to support two new capital outlay projects and three continuing projects using bond funds. The budget bills AB 101/SB 101 provide a total of $232.3 million in General Obligation bond funds for two new start projects and twelve continuing projects.

Deferred Maintenance

Approves the Governor’s May Revision proposal to reduce funding for community college deferred maintenance in the current year by $452 million (Proposition 98 General Fund), bringing total funding to $388.7 million in FY 2023-24. The Legislature’s version of the budget approves placeholder trailer bill language to allow colleges to use remaining funds from the COVID-19 Block Grant, student retention and recruitment, and deferred maintenance for any of these purposes. The amount available for these activities is about $1.1 billion.

Student Housing

Higher Education Student Housing Grant Program – Prior budgets committed $750 million for student housing construction grants at community colleges, UC, and CSU in FY 2023-24. The Legislature’s version of the budget approves the Governor’s May Revision proposal to provide $450 million one-time General Fund to support community college student housing projects in FY 2023-24, and the intent to provide $95.4 million in FY 2024-25. This would fulfill the promise made in prior budgets to dedicate 50% of the planned $2.2 billion student housing construction grant investment to community colleges. The Legislature’s version of the budget also approves the Governor’s May Revision proposal to shift approximately $1.1 billion in support for UC and CSU student housing projects from General Fund dollars to bonds issued by UC and CSU, and to provide ongoing General Fund dollars to cover debt service payments.

The Legislature’s version of the budget indicates that it would adopt placeholder trailer bill language to approve the community college student housing projects. As of this writing, we have not seen the detail on which projects are proposed to be funded.

Student Housing Revolving Loan Fund – The Legislature’s version of the budget rejects the Governor’s proposed funding delay for the RLF, and instead provides $300 million per year for six years (from 2023-24 through 2028-29). This fund would provide zero-interest loans to qualifying campuses at UC, CSU, and CCC for the purpose of constructing affordable student, faculty, and staff housing. This proposal would maintain the commitment made in prior budgets to provide a total of $1.8 billion General Fund for the RLF.

Rebekah Kalleen
CCFC Executive Director