BUDGET WORKSHOP - PowerPoint PPT Presentation

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  1. BUDGET WORKSHOP 2013-2014 Governor's January Budget Proposal

  2. Budget Assumptions • Balanced Budget, no structural shortfall in 2013-2014 and beyond • Modest, steady growth in next five years • Lower debt service with repayments to special funds • Higher revenue projections of over $6 billion • Prop 30 (temporary) • Prop 39 (permanent) • 5% spending increase in education and Medi-Cal

  3. Affects on California Community Colleges • Increase in Prop 98 spending by $587 million • Increase of 5% over 2012-2013 • Funding to grow over next several years • Increases in percentage of Prop 98 fund due to shifting of Adult Education to Community Colleges

  4. Affects on California Community Colleges • Multi-year Education Plan • Pushes down decisions to the local level • Decrease in student completion time • Continue to pay down the “wall of debt”

  5. Reforms for rebuilding the system • 90 unit state subsidized cap on credit units • Reinvest apportionment funds based on completion • Require BOG Fee Waiver applicants to complete a FAFSA • Increase number of online courses • Continue to pay down “wall of debt” • Implement Prop 39

  6. Implementation issues still to be resolved

  7. Theme of the budget: Build an efficient educational system

  8. Threats • Revenue Volatility • Percentage of state revenue from income taxes has risen from 33% to 61% • Top one percent of income earners pay approximately 40% of income tax revenue • Capital Gains has historically fluctuated between $29 billion and $100 billion • Prop 30 (2012) raises incomes taxes for high income earners through 2018 only

  9. Threats • California economic recovery sputters • Rising health care costs • Sequester/Debt Limit fight • Local revenue shortfalls

  10. Timeline for State Budget • January – May: Legislative Hearings • End of January: Legislative Analyst Office (LAO) releases its analyst of this budget • May 14: May Revise • June 15: Constitutional deadline for Legislator to send budget to Governor