When I was completing training to become an Administrator, I was fortunate to be able to attend the California Governor’s Budget Workshop in Sacramento a couple of times. I didn’t attend during my tenure as a Dean, but since those days, I have kept up my attendance because it is so informative and critical to my area of interest!

This year, the Workshop was held virtually, and while I listened intently to the panel discussion and questions at the beginning, I was anxious to hear this year’s presentation on the economic forecast! Some of those presentations can be quite dry, but more and more I have come to find them so informative and entertaining! – I know, strange right?! So, I will begin this blog post as a feedback mechanism on the Workshop as a whole, will start with the economic forecast, and summarise the budget presentation!

This year’s economic forecast presentation was loaded with charts, supplemented by great explanatory dialog. The presentation helped to clarify what has been happening in our state economy, especially during the COVID-19 pandemic, and where we are most likely going from here. Of course, the presentation provided a foundation on which to better appreciate the Governor’s proposed budget for the California Community College system. Of special interest:

Most educators are familiar with the fact that when unemployment rises, so do post-secondary enrollments! However, less familiar to us educators is the picture presented by the 2020 data that shows a steep rise in unemployment, but also a decline in enrollments.

• CA real GDP is back above pre-pandemic levels and is forecast to continue on an upward climb well into 2024.
• Inflation remains elevated, a little higher than originally forecast, however, the forecast is showing we have gone over the hump and are moving down from a current 5.8% toward a 2.8% by the end of 2023.
• Employment Development Department statistics reflect CA highest job losses during Feb to April 2020 align with the US job losses, mostly 50% losses in Leisure & Tourism, 30% in other services, 18% the Retail Trade, and about 11% in Health Care and Social Services.
• Migration of people OUT of CA appears to be around 500,000 people between 2019 and 2021.
• There is a mismatch in job openings and job hires – meaning, there is a demand for people, but a short supply of workforce

And so to the Governor’s Proposed Budget:-

In short, the state is flush, growing revenues from income and property taxes, therefore, a proposed growth in the allocation of funding for education, in particular:

• $409.4 million to fund 5.33% COLA for apportionments which is applied to the rates within the SCFF (the student-centered funding formula).
• Of interest is that the Gov did not propose additional funding to the CalSTRS and CalPERS employer contribution
• the CalSTRS cost is increasing from 16.9% to 19.1%
• Part-Time Faculty Health Insurance—To support community college part-time faculty, the Budget includes an increase of $200 million ongoing Proposition 98 General Fund to augment the Part-Time Faculty Health Insurance Program to expand healthcare coverage provided to part-time faculty by community college districts.

So, as districts are being held harmless for the loss of funds due to low enrollments, they also have growing staffing costs – above the COLA amount – just a heads up folks!!!

Hope you have enjoyed my summation 🙂