NOCCCD Townhall Presentation

November 13, 2012

Presented by:Fred Williams – Vice Chancellor, Finance

& Facilities

Agenda

• Proposition 30 • Some Historical Information• Budget Plan– 2012-13– 2013-14– 2014-15

• Other News

Proposition 30

The Schools and Local Public Safety Protection Act of 2012

Proposition 30Temporary Tax Increase

• Increases Sales Tax by ¼ percent for 4 years• Increases Income Taxes for those earning over

$250,000 per year ($500,000 for married couples) for 7 years

• Would raise an estimated $6 billion per year• Different estimates from Department of

Finance (DOF) and Legislative Analyst Office (LAO)

Proposition 30

• No Base Reductions • $50 million in growth/restoration• $159.9 in Deferral Buy downs– From $961 million to $801.1 million

• Puts restrictions on funding• Potential for growth and COLA in future years

Historical Information

Revenues

Apportionment

FTES Trends

Employee Count

Budget Planning

2012-13Budget Plan

• Add in the $11.1 million in revenues to the budget• Add FTES to make sure we capture growth• Allocate $3.8 million in one-time reductions to

budget centers to balance the budget• Return $8.5 million to budget centers that

contributed to the Deficit Reserve• Allow budget centers to fill non-faculty positions

after they indentify the on-going reductions for 2013-14

2012-13Budget Plan

• Add 330 FTES and $400,692 to extended day budgets• Allocate one-time cuts to budget centers to balance

the budget $3,830,609

2012-13Budget Plan

• Return $8.5 million to budget centers for their contribution to the deficit reserve

• Allow budget centers to fill non-faculty positions after they have identified their portion of the on-going reductions

2012-13Budget Plan

Deficit ReserveOn-Going

Deficit

Beginning Balances $ 15,000,000 $ (14,629,917)

Growth Funds 1,245,304

Cost of Growth (Ext. Day) (400,692)

Apportionment Increase 9,954,696

Return PY Contributions (8,500,000)

Ending Balance $ 6,500,000 $ (3,830,609)

2013-14Budget Plan

• Keep the FTES base as 2012-13 including the additional 330 FTES

• Make adjustments for FTES if growth funds are available

• Offer summer session• Hire faculty to meet our Full-time Faculty Obligation• Make on-going reductions of $5 million to correct our

structural deficit – this will be adjusted if additional on-going funds are available

2013-14Budget Plan

• Full-time Faculty Obligations– Assume the Board of Governors will continue the freeze,

adjusted for growth– Estimated that we will need to hire at least 14

• On-going reductions of $5 million– Cypress College - $1,515,673– District Services - $861,180– Fullerton College - $2,029,603– School of Continuing Ed - $593,544

• Above amount can be reduce by the on-going operating allocation given for eliminated vacancies that totaled $2.1 millions

2013-14Budget Plan

Deficit ReserveOn-Going

Deficit

Beginning Balances $ 6,500,000 $ (3,830,609)

Salaries/Benefits Roll-up Cost (1,169,391)

Allocation of Reductions 5,000,000

Ending Balance $ 6,500,000 $ -

2014-15Budget Plan

• Adjust FTES Targets Accordingly• Hire Full-time Faculty to meet our Full-time

Faculty Obligation• Normal Adjustments for Budget Changes– Growth– COLA– Other

Other News

Other News• Big gains for Democrats in both Houses• Potential for a Super Majority in both the Senate and

Assembly• Senate – 40 seats

– 27 needed for a super majority– Looks like the number could be 28 or 29

• Assembly – 80 seats– 54 needed for a super majority– Right on the number

• Won’t need support of Republicans to pass tax increases, constitutional amendments and urgency legislation

Questions