State Budget Update from California Community Colleges' Vice Chancellor Erik Skinner - 7/16/2009:

Dear Colleagues:

Over the past week, reports coming out of Big 5 negotiations have indicated significant progress toward an overall budget agreement. Perhaps it was the impending summer recess, perhaps the mounting cash crisis and IOUs, or perhaps the pounding California is taking in the national press. Whatever the reason, it has been reported that state leaders had resolved most of their outstanding differences and were poised to cement a budget deal.

Reports today, however, indicate that talks have hit a snag related to Proposition 98 funding. At issue is whether the budget deal will acknowledge whether schools and colleges are owed roughly $11 billion in future years due to under-funding in the 2008-09 fiscal year. Language in the State Constitution regarding Proposition 98 leaves some ambiguity as to whether a "maintenance factor" is accrued during a "Test 1" year. This highly technical issue has never arisen before and has generated considerable controversy. The Governor has weighed in that no maintenance factor obligation is generated. The Education Coalition has asserted that a maintenance factor is generated and the California Federation of Teachers has filed a lawsuit challenging the Governor's contention. Legislative Democrats have sided with the Education Coalition.

The specific details of how the maintenance factor issue is being debated--where each of the Big 5 members stands, what "fixes" are being considered--have not been released publicly. The matter is a significant enough of a stumbling block that budget talks have stalled out for the time being. The State Senate was sent home for the weekend, but told to remain ready to return to Sacramento should a budget deal come together.

It is likely that the Big 5 will resume meeting in the near future in order to get negotiations back on track. We will stay tuned and pass along any new developments as they occur.

Regards,

Erik Skinner
Vice Chancellor for Fiscal Policy
California Community Colleges,
Chancellor's Office
1102 Q Street
Sacramento, CA 95811-6549