California Budget Update: The "May Revise"

Concept photo of a cheerful afro american woman standing under rain with money on gray backgroundThe following article was originally sent as a Peralta Community College District announcement to employees on Friday, May 21, 2021.

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Dear Peralta Community,

The economy of the state of California is the largest in the United States, boasting a $3.2 trillion gross state product (GSP) as of 2019. Based on 2019 data, if California were a sovereign nation, it would rank as the world's fifth largest economy, ahead of India and behind Germany. 

The budget for the state of California – which includes the California Community Colleges, which in turn includes the Peralta Community College District – is a big deal, and is usually communicated in three phases:  

  • The initial budget proposal in January 
  • Changes to the budget based upon the latest economic indicators as of May, known as the “May Revise 
  • The final budget adopted in summer 

On May 14, 2021, Governor Newsom announced the proposed budget changesThe May Revision includes $48.7 billion ($26.5 billion General Fund and local property tax and $22.2 billion other funds) for all higher education entities in 2021-22. The May Revision proposes significant one-time and ongoing investments that reflect the Governor's continued commitment to affordability, access, and efficiency in higher education.   

This new budget is a significant reversal from the previous year. Last year, the May Revise projected a $54 billion budget deficit and community colleges were strapped with deferred payments from the state. This year, the Administration is projecting a budget surplus of over $70 billion. This surplus means approximately $17.7 billion in additional funding for Proposition 98 (which includes K-12 and community colleges). The May Revise includes an additional $3.6 billion for community colleges. 

eoakley-pic

California Community Colleges Chancellor Eloy Ortiz Oakley stated that, “The Governor’s revised budget plan leverages a historic level of revenue to create lasting opportunities for community college students and will power the economic recovery that makes our state stronger and more equitable. Gov. Newsom’s plan recognizes the vital role of community colleges and invests in students through direct grants, enhancements to support services, workforce training, diversity equity and inclusion programs, college affordability, and improved financial footing for our colleges. As California roars back from the pandemic, community colleges will help lead the way.” 

“This revision is fantastic,” says Interim Vice Chancellor of Finance and Administration, Adil Ahmed, who has reviewed the May Revise and the state chancellor’s assessment and has indicated that the May Revise will benefit the Peralta Community College District and the students we serve in many ways. 

Students First 

This budget proposal puts students first. Community college students have been the most affected population in higher education during the pandemic, and this budget helps by investing in direct emergency aid. 

Diversity, Equity, and Inclusion 

The pandemic era’s health, economic, and civic crises reinforce the need to advance our work to end systemic racism. Investments in the budget would advance diverse hiring across our 116 colleges. 

Jobs 

With an inclusive mission and quality programs, this proposal recognizes that no other system can help put California back to work in the emerging fields of the future like California Community Colleges can. 

Affordability 

With investment in affordable student housing and Zero Cost Textbook degrees, this budget tackles barriers that make college unaffordable for many students. 

Prior Funding Deferrals Settled 

Colleges can rest assured that a $1.5 billion IOU from the state in 2020-21 would be paid, helping to restore fiscal health. 

Retention and Enrollment 

Provides resources to re-engage, retain, and attract students, particularly those with the steepest declines and help them reach their educational goals. 

In-Person Classes and Supports 

Resources to return to in-person operations and maintain the flexibilities students need. 

VC Ahmed concluded, “While this increase in funding is one-time and not ongoing, and therefore we cannot use to hire employees, it will still benefit PCCD, our employees and especially our students. 

A joint analysis about the May Revise from the state chancellor’s office, the Association of Chief Business Officers (ACBO), the Association of California Community College Administrators (ACCCA), and the Community College League of California can be found here: https://www.cccco.edu/-/media/CCCCO-Website/College-Finance-and-Facilities/Budget-News/Budget-2021-2022/May-2021/Updated/May-Revision_trailer-bill-language_Joint-Analysis-21-22_.pdf

My thanks to VC Ahmed and Chief of Staff Royl L. Roberts for information about the May Revise.  If you have questions, please let me know or contact VC Ahmed at aahmed@peralta.edu

 

All the best,

Mark Johnson
Executive Director
Department of Marketing, Communication & Public Relations
Peralta Community College District

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