SDCCD: The California Budget 2022-23

Press release from San Diego Community College District:

January 11, 2022

Dear Colleagues and Friends:

On January 10, 2022, California Governor Gavin Newsom outlined a $286.4 billion budget
for Fiscal Year 2022-23, including $213.1 billion in the General Fund and a one-time
discretionary surplus of $45.7 billion, representing an increase over the budget he
introduced this time last year.

The Governor’s press conference marks the official start of the State’s budget development
process. The Governor’s Budget Proposal will be followed by legislative discussions,
advocacy from the public and private sectors, and further analysis by the State Department
of Finance and the Legislative Analyst’s Office as more is known about revenue being
generated in the current year. As was the case in the past several years, it is anticipated
that the revenue estimates will continue to be positive in spite of the continued
effects of the COVID-19 pandemic. The next official step in the process will be the
Governor’s second budget proposal, known as the May Revise or May Revision, which
will be issued later in the spring, and will be based on updated revenue figures,
as well as input from legislative discussions and public advocacy efforts. The state
must pass a budget by June 15, in time for the July 1 start of the fiscal year.

In his remarks, Governor Newsom reviewed the process and components of the budget
effort that resulted in the State’s expenditure plan for FY 2022-23. In spite of the
continuing impacts of the COVID-19 pandemic, the state continues to see significant
surplus revenue for the second year in a row. The Governor’s budget priorities include
tackling homelessness, climate issues, universal health care coverage regardless of
age and immigration status, paying down pension debt, as well as addressing pandemic
related impacts including hiring more health care workers. As he has in past years,
Governor Newsom uses one-time funding increases as a hedge against possible future
revenue reductions. This administration continues to propose investments in a number
of areas across various priorities with 86% of new spending being one-time in nature.

As for education, funding for K-12 and community colleges will exceed $100 billion
for the first time in history, with the state’s 116 community colleges getting $560
million in new general fund revenue. UC and CSU will benefit from 5% general fund
budget increases targeted at increasing access and affordability while achieving greater
student success.

For Proposition 98, which requires a minimum annual funding level for K-14 schools
(K-12 schools and community colleges), there is approximately $16.1 billion in additional
funding. Additionally, the proposed budget makes approximately a $9.7 billion deposit
into the Proposition 98 rainy day fund.

For the California Community Colleges, the budget demonstrates the critical role played
by community colleges in the state’s economic health and includes significant investments
in student financial aid, enrollment and retention, and part-time faculty. The buy-down
of the outstanding pension liability will significantly benefit all districts as they
struggle through the pandemic.

The budget continues to support the Student Centered Funding Formula (SCFF), which
has provided fiscal stability for districts during the pandemic, and continues to
prioritize access and student success. To prevent anticipated fiscal declines between
2024-25, when the “hold harmless” provision of the SCFF sunsets, and 2025-26 the administration
intends to propose statute changes to create a funding floor for all districts to
transition to the core formula over time that will provide all districts with no less
than their 2024-25 hold harmless revenue amount—regardless of the number of students
they serve that year or in the future.

Another important budget priority for the SDCCD is affordable housing. While there
is no additional funding for student housing included in this budget proposal, the
administration has indicated that they plan to continue to allocate the funding that
they set aside in the current-year budget to fund a number of proposed projects.

The San Diego Community College District has always followed a balanced approach to
fiscal policy and operations, and has been aggressive in taking steps to eliminate
any and all developments that produce structural deficits. Under the Governor’s proposed
budget, the SDCCD will continue to invest in our great institutions, City, Mesa, Miramar,
and Continuing Education colleges to advance their programs and innovations.  

Here is a summary of the Governor’s proposed budget, which Executive Vice Chancellor
Bonnie Ann Dowd and several agencies have analyzed, as it affects community colleges
in general and the San Diego Community College District in particular.

For more detailed information see the 2022 Joint Budget Analysis from the California Community Colleges Chancellor’s Office, working with other organizations.

Cost of Living Adjustment (COLA). The Governor’s Budget includes a 5.33% COLA in the
amount of $409.4 million.

SDCCD Impact. This will yield $14.6 million, which will be addressed in accordance with the SDCCD
Resource Allocation Formula (RAF). 

Apportionment Funding for Growth. The Governor has proposed 0.5% in growth funding
in the amount of $24.9 million.

SDCCD Impact. The District continues to be funded under the Student Centered Funding Formula’s
(SCFF) minimum revenue provision (i.e., hold harmless); therefore, the SDCCD will
not be receiving any growth funding.

- Deferred Maintenance to support districts operational and energy efficiency projects
is included in the Governor’s proposal. This year’s state allocation proposal is $387.6
million.

SDCCD Impact. The District would receive approximately $13 million in one-time funding. As with
past practice, 60% or $7.8 million would be allocated to facilities and 40% or $5.2
million would be allocated for instructional equipment and materials.

Total Increase: $14.6 million on-going funding and $13 million of one-time funding

Note: 1) COLA funding for the following categorical programs: DSPS, EOPS, Apprenticeship
programs, CalWORKS, and Cooperative Agencies Resources for Education (CARE) program
are also included in the Governor’s budget proposal.

Although there is more detail to be provided in the months to come as the state budget
process continues to move forward, the Governor’s proposed budget includes one-time
funding to community colleges for several state initiatives that support access, equity
and innovation. By focusing on some of these initiatives with one-time funding, the
Governor is taking a cautious approach to spending down the state’s currently projected
revenue surplus, which he emphasized could change in the months to come. The proposed
budget continues to demonstrate the state’s commitment to education while also tackling
other major issues such as the COVID pandemic, homelessness, and wildfire protection.
The Governor’s proposed budget is the first step in the process for development of
the state’s 2022-23 adopted budget and it once again provides some needed relief in
several areas that are important to the state, community colleges and the students
and communities we all serve.

The Board of Trustees, the College Presidents, the Vice Chancellors, the Academic
and Classified Senates, and the student leaders, will be involved in legislative advocacy
efforts that will begin later this month when we will participate in statewide advocacy
meetings with a focus on increasing base funding and continuing the mitigation of
the impact of increases in the employer contributions to CalSTRS and CalPERS.

During the coming months, you will all receive information about the budget issues
that will be addressed, along with other legislative matters, and your ideas and suggestions
will be welcome. The District Cabinet and Budget Planning and Development Council
will now turn its attention to the actual, detailed budget development process for
2022-23, a process in which everyone will be involved through designated councils
and committees, both districtwide and at the campuses. All districts are required
to approve a Tentative Budget by June 15 and an Adopted Budget by September 15 each
year. In addition, the District’s strategic planning process will also include opportunities
to provide direct input on our priorities and initiatives to be pursued in the years
to come. I encourage you to stay engaged and let your voice be heard.

Dr. Carlos O. Turner CortezChancellor of the San Diego Community College District

Related Materials: 2022 Joint Budget Analysis

This press release was produced by San Diego Community College District. The views expressed here are the author’s own.