Legislature Acts on Final Budget Agreement, Approves Student Housing and Deferred Maintenance Items

On Monday night, the Governor and legislative leaders issued a joint statement that they had reached a deal on the final budget agreement for FY 2023-24. The deal reflects a $310.8 billion budget that closes an estimated $31.5 billion deficit. Today the Legislature acted on a package of bills to implement the budget agreement. This action included passage of AB 102, a “budget bill junior” that makes changes to the main budget bill (SB 101) previously passed by the Legislature on June 15. One of the final sticking points was the Governor’s proposed infrastructure and CEQA reform package; the final agreement includes a modified version of this proposal, and the Legislature will take action on a handful of related bills at a future date.

Please see the details from our report yesterday; all of these provisions were included in the final budget agreement and reflected in today’s Legislative actions.

The Legislature passed higher education trailer bill SB 117, which includes the student housing provisions identified in yesterday’s update. This bill passed without any opposition in either house. It includes the provision to modify the funding mechanism for the Higher Education Student Housing Grant Program, shifting the fund source for prior, newly-authorized, and future student housing construction projects from state General Fund to local revenue bonds issued by community colleges. We understand there are many questions about how this will work; details will need to be worked out in implementation.  SB 117 also authorizes 7 new community college student housing projects worth $464.1 million, using the local revenue bond financing mechanism.

AB 102 provides $78.5 million General Fund to support debt service payments for community college Higher Education Student Housing Grant Program projects.

SB 117 also includes the funding reduction for deferred maintenance in current year FY 2022-23, from $840.7 million to $346.6 million, and language allowing 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.

Funding for community college capital outlay projects is identified in the primary budget bill, SB 101. This includes $232.3 million (General Obligation bond funds) for two new start projects and twelve continuing projects.

The bills will now go to the Governor for his consideration. We expect him to sign the bills, as he was party to the final negotiated budget agreement. Upon signature, the budget bills and trailer bills go into effect immediately.

Rebekah Kalleen
CCFC Executive Director