Governor Jerry Brown released his proposal for the 2018-19 state budget. This year's budget projection has some built-in uncertainties due to the federal tax bill. For community colleges, the Governor's budget proposes an increase of $780 million in Proposition 98 General Fund spending, which includes the following:
- An increase of $175 million to support community college districts' transition to a student success funding formula
- An increase of $161.2 million for a 2.51 percent cost-of-living adjustment
- An increase of $60 million available for enrollment growth of 1 percent
- A one-time increase of $275.2 million for deferred maintenance and instructional equipment
- An increase of $120 million ($20 million ongoing) to establish a fully online community college
- An increase of $46 million Proposition 98 General Fund to support the implementation of the California College Promise program
The new student success funding formula encourages access for underrepresented students, provides additional funding in recognition of the need to provide additional support for low-income students, and rewards colleges' progress on improving student success metrics. Under the formula, no district would receive less funding than is currently allocated. The proposed formula incorporates the following core components:
- Base Grant (50% of funding) Each district would receive a base grant based on enrollment. Similar to the existing funding formula, a per-full-time equivalent student (FTES) funding rate would be applied across all districts.
- Supplemental Grant (25% of funding) Each district would receive a supplemental grant based on the number of low-income students that the district enrolls. Specifically, the supplemental grant would reflect two factors: 1) enrollment of students who receive a College Promise Grant fee waiver (formerly known as the Board of Governors Fee Waiver) and 2) enrollment of students who receive a Pell Grant.
- Student Success Incentive Grant (25% of funding) Each district would receive additional funding for the number of students who meet the following metrics: 1) the number of degrees and certificates granted and 2) the number of students who complete a degree or certificate in three years or less. The grant would also include additional funds for each Associate Degree for Transfer granted by the college.
- Hold Harmless Provision—During the first year of implementation, each district would be held harmless to the level of funding that the district received in 2017-18. Thereafter, the hold harmless provision would be calculated each year using the 2017-18 per-FTES rate multiplied by the district's new FTES.
No details for this new formula have yet been developed, leaving much to be determined in a very short period of time.
The Governor's budget proposal is the first step in a six-month legislative process. We will continue to monitor changes in budget figures and priorities.