There is a tendency
in budgeting to point fingers. It would be easy to say that this latest
California budget, passed by the legislature and likely to be signed by the
governor, provides so little certainty that it forces us to plan for the worst.
Yet, in this case uncertainty is understandable.
Will California income tax revenues drop as steeply as millions unemployed
would suggest? Will other revenue sources suffer as much or will they be
spared? Will the federal government provide a massive relief to provide for a
massive investment in public health and economic recovery?
Faced with unanswered questions, the state looks poised to move into the next
year with a budget full of hopeful funding and more pessimistic “trigger” cuts.
This budget design defers many statewide decisions, which leaves many of
today’s hard choices to us.
In many ways, we must still proceed as though a $10 million to $20 million
reduction in state support is likely, even if it is not a guarantee. If we do
not act early, and the pessimistic future does arrive, we will be making cuts
in the middle of an academic year that would need to be even deeper than
today’s choices—simply to make up for lost time.
The trustees, presidents, vice chancellors, and chancellor have all taken
compensation reductions. These provide relatively small relief for the total
budget, but they are meaningful in recognizing that our expenditures on people
drive some 90 percent of District expenditures. We have very few places to go
in the case of steep cuts that do not directly affect faculty, staff, and
Difficult conversations will be had at the collective bargaining table, at the
District Office, and at our Colleges. These are needed. We must have these
conversations now and begin taking some steps now. Doing so will help us avoid
the worst as a District, should the worst materialize for California.
Earlier, we provided a
budget website for your budget suggestions. I have reviewed those comments
alongside the chancellor, presidents, fellow vice chancellors, and others—often
without names for those who choose not to provide one. I ask that you continue
to provide suggestions and comments.
It is impossible to make the choices we will need to make, when there is so
much uncertainty, without some hurt and regret. Dialogue is how we ensure that
our Colleges and District continue to do all we can for our students and
communities—and for our faculty, staff, and managers.
W. Andrew Dunn, Ed.D.
Vice Chancellor, Finance and Administrative Services
As anticipated in my video message on Wednesday, Governor Newsom released his revised budget plan Thursday.
I will address the scariest number first. The governor's plan estimates that guaranteed funding for schools and community colleges will fall by more than 20 percent. This becomes our new floor in the 2020-2021 state budget discussions. While a 20-percent cut is unlikely for the Coast District, it is quite possible that we will see a cut to our state funding in the range of 10 percent.
A cut of 10 percent is roughly $20 million of the Coast District's General Fund budget. For context, the retirement incentive—designed to address budget challenges that existed before COVID-19—is projected to save the District $2 million per year. With COVID-19, we are looking at a budget challenge that is ten-fold worse.
The governor is seeking additional federal funding to offset these cuts, and the Coast District will work to inform our national leaders about the need to support education through a recession—so that we can help our communities recover.
As we work with our state and national leaders, we must also begin planning how we would address a large funding cut. That will require much of our bargaining and fiscal teams, in addition to requiring engagement of all faculty, classified staff, and managers.
There is no sugar coating this challenge. This is the most disruptive crisis in the Coast District's history and likely in many of our careers.
You rose to the challenge during the Great Recession. You rose to the challenge of hitting new achievement measures for our students. And you rose to the challenge just a couple months ago of moving thousands of courses online.
I have faith that the Coast District—with you as our faculty, classified staff, and managers—will rise to this challenge.
John Weispfenning, Ph.D.Chancellor
“We have the tools to work our way through this,” Chancellor Weispfenning said. “If we work together, we will weather this.”
SHARED PLANNING FOR A FUTURE THAT IS COMPLEX AND UNKNOWN: Thank you for your engagement in planning for the future of Coast. Since the adoption of the hiring freeze and incentive-retirement program, our HR teams have been very busy in communicating to employees. We essentially have two groups with different engagement needs: those eligible employees who are interested in taking the incentive and those who will continue on with Coast after June 30. Incentive-eligible employees should be receiving communications on requirements and timelines for the programs. You have likely also seen emails regarding in-person sessions to learn about the incentive and gain further understanding about Coast District retirement benefits. For those continuing after June 30, we are also beginning meaningful conversations about how we provide a high-quality experience for our students with fewer people. For all of us, it is important to know that the incentive is not guaranteed. Trustees will have final say on moving forward with the incentive program in late April. At that time, my recommendation on whether to proceed will rest on two considerations: Will we achieve our financial goals based on those who indicated interest in retiring? Will the experience and institutional knowledge being lost cause an unacceptable disruption of our mission to serve students and the community? We don't know the answer to either question today. Only time will tell, and that uncertainty is stressful. I acknowledge that stress. At the same time, I ask for your understanding as we address the complexities and unknowns of balancing the size of the District with our current and projected student enrollment. Together, we will take the necessary steps for the future while honoring the dedication of our long-serving faculty and staff. Originally posted in the News Brief on February 7, 2020
BEING PART OF PARTICIPATORY GOVERNANCE: Today, Dr. Dunn and I met with the District Consultation Council Budget Subcommittee. This followed several active weeks, as we reached agreements with our employee bargaining units this January on a hiring freeze and incentive retirement program, with trustee review and approval. Concurrently, in Sacramento, Governor Newsom put out his budget proposal. The rippling effect of the things that began this month will create waves for a long while. I fully expect the unexpected, as nearly every action has some unintended consequence. At the same time, I am confident that effects from the hiring freeze and retirements will be manageable—so long as we continue to work together and support each other. The harder part of the budget equation to manage is state funding and allocation. On Sunday, I leave with a delegation—including trustees—to advocate for the Coast District in Sacramento. The message we will carry is urgent. We are advocating for additional funding for our core academics, operations, and facilities. We are also looking for continued support for existing initiatives. The work we are doing in career education and comprehensive student support are yielding provable results. We want to keep up that momentum. With our state leaders we are also seeking clarity. To plan for the future, we must have confidence that the Student-Centered Funding Formula will yield the funds we expect based on our performance measures. Coast is a high-performing District. Your work should be recognized and rewarded. I continue to welcome your suggestions and participation. My appreciation goes out to all those who participate in the DCC Budget Subcommittee. Thank you to everyone who has joined in the various forms of participatory governance. There will be many more opportunities to join these conversations in the new semester. Originally posted in the News Brief on January 24, 2020
A STRONGER PATH FORWARD: The hiring freeze and incentive for retirement acted on by trustees this week is a needed, and also challenging, step. The demographic trends for Orange County continue to point to lower student enrollment for our Colleges over the coming decade. This declining number of students puts significant pressure on Coast's financial health. College and District leadership carefully considered which of our available options would be least disruptive for our employees and their families. What emerged were the hiring freeze and incentive for retirement, essentially allowing some employees to choose to depart—perhaps a year or two earlier than planned—as we evaluate and restructure our services. I will not cast this as a step we would want to take outside of a pressing need. There will be significant challenges to overcome as people leave, taking their experience and skillsets with them. At the same time, those who remain will have a unique opportunity to shape their careers at Coast. For some, there may be opportunities for advancement or to try something new in a lateral move. All of us will gain a greater understanding and appreciation for the work of our retiring colleagues. As friends and coworkers begin the next well-deserved phase of their lives, this time of challenge may yet strengthen bonds and forge a stronger path forward for those of us who remain. Originally posted in the News Brief on January 17, 2020.
CHALLENGES ARE EASIER TO FACE WHEN WE FACE THEM TOGETHER: As a result of enrollment trends and funding uncertainty, budget challenges will exist for this and following years. How is it possible to have a budget problem in the midst of one of the longest periods of economic expansion in California’s history? In plain terms, promises were made to college districts early in the rollout of the state’s new Student Centered Funding Formula. If kept, those promises would have recognized Coast’s efforts in student achievement and would have resulted in $25 million in additional funding total for our Colleges this year and last. But the State funding promises were not met. And combined with Orange County’s ongoing population trends, a weak funding model means that the Coast District will face ongoing budget challenges. We are acknowledging the reality of these challenges and exploring how we can meet them with a united front. I’ll spend the next few months reaching out to classified staff, faculty, and managers. As we address current budget issues and find a sustainable path forward, it’s important that we all share our expertise and knowledge of the District’s capabilities. This will be a challenging process, but challenges are easier to face when we face them together. Originally posted in the News Brief on September 6, 2019.
A START TO THE CONVERSATION: The state’s Student Centered Funding Formula, approved a year ago, was hurriedly designed and has given us several challenges because it was not fully funded. Some recent adjustments may make it more stable, but will limit any additional revenue for our colleges’ strong performance. Recession fears, changes in state funding priorities, and enrollment shortfalls mean the community college system, as a whole, is not as fiscally sound as the State’s economy suggests it should be. Normally, here in the Coast District, we would expect reserve funds to make up some of the lost funding, but we’ve gone to that well too many times already in the recent past, and the reserve has been drawn down. As a result, we need to begin now to plan the steps we will take if these trends don’t change. In my 2019-2020 Goals for the District, approved by the Board on Wednesday, one objective directs us to prepare strategies for managing funding shortfalls. Unfortunately, this planning activity comes at a time when unemployment is at record-low levels, construction is booming, and state tax revenues are as high as they’ve ever been. These funding shortfalls shouldn’t be happening while the economy is so strong, but they are. Through the summer and into the fall, I expect to lead conversations with the District Office and Colleges about these issues and what we will need to do fiscally to maintain the ability and effectiveness of the District to educate students. Originally posted in the News Brief on June 21, 2019.