CCFC Budget Update: Governor Signs Final FY 2025-26 Budget, Funding CCC Capital Outlay Projects

On Friday, June 27, the Legislature passed “Budget Bill Junior” AB 102 and a selection of trailer bills that encompass the final agreement with the Governor on the FY 2025-26 budget. AB 102 amends SB 101, which contained the Legislature’s Version of the budget as passed on June 13. On Friday, June 27, the Governor signed both budget bills and accompanying trailer bills to enact the FY 2025-26 budget. AB 102 contained language making the entire budget inoperative if the Governor did not sign a pending bill related to housing and CEQA reform (AB/SB 131) by June 30; the Legislature passed SB 131 yesterday afternoon and the Governor signed it yesterday evening.

The final budget includes $228 billion in state General Fund expenditures in 2025-26, plus an estimated $89 billion in special fund spending and $4 billion in spending from bond accounts. 2024-25 revenues came in about $1 billion more than estimated, resulting in more resources for the General Fund, including for public schools and community colleges. The final budget uses $7.1 billion (about 40% of the remaining balance) of the state’s Rainy Day Fund and about $6.5 billion from other cash reserves to help balance the budget while mitigating some of the proposed cuts to safety net programs. The final budget uses cap-and-trade auction proceeds and Proposition 4 climate bond funds to offset General Fund costs for natural resources and environmental protection. The final budget did not include the Governor’s proposed cuts to University of California and California State University, but it did defer some payments to these systems. Policymakers cautioned that potential Federal policy changes and economic uncertainty could significantly impact California and potentially necessitate a reopening of the budget in the coming months.

There were few changes between the Legislature’s Version (see here for more information) and the final budget on issues that may impact community college facilities. Overall, the budget maintains core funding for community colleges.

Community College Capital Outlay Projects

The final budget adopted the Governor’s budget proposal (as amended at the May Revision), providing $54.7 million (Proposition 2 bond funds) to fund 29 new community college capital outlay projects for the preliminary plans and working drawings phases (and in one case for performance criteria). The final budget also provides $13.8 million (Proposition 51 bond funds) for the construction phase of one continuing project: Peralta Community College District, College of Alameda: Aviation Complex Replacement. CCFC advocated in support of this proposal and is pleased to see all projects recommended by the Governor included in the budget. 

Click here to see the list of projects included in the FY 2025-26 budget. 

Student Housing

The final budget does not include any new investments for student housing. SB 101 includes a technical local assistance item providing $2.5 million to support payment of lease revenue bond debt service, as provided for in the schedule submitted by the Public Works Board.

Other Community College Provisions

• COLA – $217.4 million (ongoing Proposition 98 General Fund) to support a 2.3% COLA for Student Centered Funding Formula apportionments. Provides a 2.3% COLA for select categorical programs.
• Enrollment growth – $100 million (one-time Proposition 98 General Fund) in 2024-25 and $139.9 million (ongoing Proposition 98 General Fund) in 2025-26 to support 2.35% enrollment growth.
• Block Grant – $60 million (one-time Proposition 98 General Fund) for a student support block grant.
• Proposition 98 funding split – Includes the Legislature’s modified version of the Governor’s proposal to fund Transitional Kindergarten (TK) outside of the TK-12/California Community Colleges Proposition 98 funding split, shifting $492.4 million from community colleges to TK-12 to support TK expansion. This adjustment to the split would occur beginning in 2025-26, maintaining $259 million at the community colleges for the prior and current fiscal year.
• Deferrals – Defers $408.4 million Proposition 98 General Fund from 2025-26 to 2026-27. Reappropriates $135 million (Proposition 98 General Fund) from FY 2024-25 funding for the part-time faculty health insurance program to help reduce the 2025-26 deferral. Pays back the 2024-25 deferral.
• LA County Fires – $5 million (one-time Proposition 98 General Fund) to develop a grant program for community colleges that are members of the Los Angeles Regional Consortium to assist with workforce recovery efforts and career technical workforce development associated with recovery from the Palisades and Eaton fires.

Rebekah Kalleen
CCFC Executive Director