Check this page frequently for new developments and visit our budget information page at www.mjc.edu/budgetinfo

California's community colleges, like the rest of our state, are in a crisis situation. Modesto Junior College, along with the other community colleges, is dealing with unprecedented enrollment demand, coupled with the largest State budget cuts in the system's history. Our students are facing an increased enrollment fee of $26 per unit as well as a difficult time  accessing the student support services they need.  Additionally, the increasing number of students combined with the budgetary need to cut 180 previously scheduled fall courses has made if very difficult for MJC students to get in to the classes they need!

Governor Schwarzenegger signed a budget revision package into law on July 28 that deals with the State's financial crisis for the time being.  In addition to increasing the student fee to $26 per unit effective with the 2009 fall semester, the new state budget has made it necessary for MJC to carve $2.4 out of the college's current 2009-10 budget. 

The Yosemite Community College District, the parent organization for MJC, is projecting a $12 million deficit for the 2010-11 fiscal year.  MJC has been asked to compile a plan to deal with a projected $7 million deficit, which would be the college's portion of the district's projected deficit.  MJC’s president, vice presidents, division deans and department managers have been working to meet this challenge and have come up with proposed savings and reductions for the current year that can be rolled forward to the next fiscal year, as well as cost cuts and savings proposed for the 2010-11 budget.

Many cost saving measures have already been implemented, such as the paperless Spring Schedule of Classes, and a freeze on replacing a number of vacant management and faculty positions. The college has also reduced the Spring Semester class offerings by 5% over last year, eliminating early start summer classes and reducing MJC’s summer offerings from approximately 1,800 sections in 2009 to about 800 sections in 2010. While the cuts are deep, the college has been very strategic in making these and other cuts, always keeping in mind the needs of our instructional areas, so that we can continue to fulfill our mission as a community college.

Major features of the revised California Community Colleges budget for 2009-10:

o Student fees increased from $20 to $26 per credit unit effective fall 2009 (this increase generates $80 million in revenues to the State that is used to mitigate cuts to the community colleges)

o An estimated allocation of $130 million in federal funds provided through the State Stabilization provisions of ARRA. The actual amount of funding received by the community colleges will be determined in the coming weeks based on a formula-driven calculation.

o Elimination of all growth funds

o No COLA

o $333 million in cuts to categorical programs (a $140 million one-time backfill is provided using federal ARRA funds and fee revenues, bringing the net reduction to $193 million). Cuts to specific categorical programs vary from no cut to total elimination with most programs facing cuts of between 16 and 32 percent, after accounting for the one-time backfill. Specific categorical cuts are as follows:

• No cuts: Student Financial Aid Administration, Foster Care Education
• 16 percent cut: CalWORKs services, Basic Skills, Disabled Students Programs and Services, EOPS & CARE, Fund for Student Success, Nursing
• 17 percent cut: SB 70 CTE (total funding cut from $58 million to $48 million)
• 20 percent cut: Telecommunication/Technology
• 32 percent cut: Academic Senate, Apprenticeship, Child Care Tax Bailout, Economic Development, Equal Employment Opportunity, Transfer Education and Articulation, Matriculation, Part-time Faculty Compensation, Part-time Faculty Health Insurance, Part-time Faculty Office Hours
• Elimination: Physical Plant/Instructional Equipment, California High School Exit Exam (CAHSEE)

 o $120 million reduction to general purpose funds (in lieu of the proposal to reduce funding rates for physical education courses).

o A budgeted 2009-10 local property tax shortfall of $53 million (the total budgeted property tax shortfall is $116 million, but $63 million in relief is provided).

o A budgeted 2009-10 student fee shortfall of $21 million.

o Language authorizing the Chancellor to reduce base workload measures in proportion to cuts in general apportionment funding. This provision will bring the enrollment expectations used in the apportionment process in line with the level of funding provided by the state. Legislative intent language states that districts should, to the greatest extent possible, make reductions in course sections in areas other than workforce training, transfer, and basic skills.

o Language authorizing community college districts to transfer funds out of certain categorical programs and into any other categorical program included in the state budget. A public board meeting is required before making such a transfer.

Major Policy Issues

• Student Fee Increase. AB 2xxxx contains a provision increasing community college student fees to $26 per credit unit effective fall 2009. This change is now in effect as AB 2xxxx as an urgency measure.
• Workload Adjustment. AB 1xxxx includes a provision which authorizes the Chancellor to adjust districts' base workload measures commensurate with reductions in general apportionments. This action will reduce base workload expectations for purposes of apportionment calculations and make it easier for districts to make necessary cuts to course sections. Language states intent that reductions in course sections, to the greatest extent possible, be achieved in areas other than basic skills, CTE, and transfer. My office is preparing guidance for districts on this matter and will provide that to districts within the next week.
• Full-Time Faculty Obligation. While the revised budget package does not explicitly modify the requirements for districts to employ certain numbers of full-time faculty, the loss in funded credit full-time equivalent students that is likely to occur as the result of budget cuts will, for most districts, lead to a decline in the number of full-time faculty required to be employed. My office will endeavor to provide timely and complete information on this topic as it unfolds.
• Fifty-Percent Law. The revised budget does nothing to change the obligation of districts under the Fifty-Percent Law. However, it is likely that the deep cuts contained in the revised budget will place new strains on districts as they attempt to maintain core student services and baseline administrative functions. The Board of Governors has authority to waive Fifty-Percent Law penalties for an individual district in the event of fiscal hardship.
• Categorical Flexibility. AB 2xxxx contains language that provides districts with increased discretion in the use of some categorical funds. Specifically, districts would be able to redirect funds from any of the categorical programs subject to the 32 percent reduction (see above) to support any other categorical program funded in the state budget. Before exercising flexibility, districts would be required to discuss the redirection of funds at a regularly scheduled public meeting. This flexibility applies to fiscal years 2009-10 through 2012-13.

The Challenges Ahead

California's fiscal crisis is rooted first and foremost in the worldwide economic collapse so recovery is expected to take several years. While the world and U.S. economies have shown some signs of turnaround in recent months, all indications are that the recovery will be slow and take an extended period of time. Further, the California economy, the epicenter of the foreclosure crisis, appears to be on an even slower course to recovery than the rest of the nation. Until the economy regains its strength, the California state budget will continue its struggles. Below are some specific threats to the community colleges:

• Uncertainty Regarding Federal ARRA Funds. The revised budget package assumes that the community colleges will receive $130 million in federal ARRA State Stabilization Funds. However, the actual amount of funding received by the community colleges will be determined in the coming weeks based on a formula-driven calculation. To the extent the funds provided fall below the estimated level, cuts to categorical funds will be deeper than identified above. We should know the actual amount of ARRA funding available to the community colleges within the next few weeks and will provide additional information as soon as it is available.
• Mid-Year Cuts. While no one knows for certain what will occur, it is quite likely that continued sluggish economic performance will lead to further deterioration in state revenues and resulting midyear cuts during 2009-10. Proposition 98 and the federal maintenance of effort requirements under ARRA should provide the community colleges with some protection; however, a significant drop in state revenues could open the door to additional cuts. The relatively small size of the state's budget reserve makes such a threat more likely to occur.
• Property Tax Shortfall. The revised budget for 2009-10 assumes that local property taxes will fall $116 million below February estimates, but provides only $63 million to address this deficit. The remaining shortfall of $53 million results in a cut to districts' general purpose apportionments used to support student enrollments. Given the continued struggles in the housing markets and continued reports of downward reassessments in property values, it is very possible that we will see further erosion in local property tax revenues below current estimates.
• Structural Imbalance in the State Budget. Despite the tough choices contained in the budget packages for 2008-09 and 2009-10, the state has failed to bring its spending and revenues into true alignment. State leaders have not been willing to make the deep cuts or raise the revenues necessary to put the budget on stable ground. As a result, borrowing and gimmicks continue to hold the budget together.  In addition to the state budget challenge of a $41.1 million property tax shortfall for 2008-2009 and a projected property tax shortfall of $116.7 million for 2009-10, the Legislative Analyst's Office forecasts that the state's structural shortfall will reach $20 billion by 2012-13 and reach $26 billion by 2013-14. Until this structural problem is resolved, each year's budget will be fraught with peril and uncertainty.

What does this mean to MJC?

MJC has been holding meetings and taking a strategic steps toward meeting the challenge of carving approximately $2.4 million out of the college's 2009-2010 budget. A s in previous financially difficult times, Modesto Junior College remains committed to serving our students and to avoiding employee layoffs. However, MJC has had to cut 180 courses that were previously scheduled for the fall semester and will reduce the class offerings for the 2010 spring semester, and staffing reductions in temporary and part-time positions are expected as class offerings are condensed. Additionally, there will be no  short term early-start summer classes for 2010 (those that begin in May and end by June 30) and the number of regular 2010 summer classes will be limited. Three fulltime faculty positions slated to have been filled have been put on hold and all unnecessary travel has been eliminated.

College leaders and advocates believe this next budget year (or possibly 2-3 years) will present one of the greatest challenges ever faced by California community colleges and could change the structure of our community colleges for decades to come.

What can we do?

The Community College League of California (CCLCD) is working closely with student, faculty and staff organizations and has assembled an easy-to-use web site where you type in your ZIP code, get your legislators' information, and simple talking points to make phone calls or write letters regarding the impact of state budget cuts and fee increases proposed for community colleges. To access this information visit: http://www.ccleague.net/act/calltoday.html  While it is impossible to eliminate all of the cuts, it is important that we draw attention to the disproportionate cuts to community colleges and what that means to the students and staff of Modesto Junior College.

Submit a cost saving, expense cutting, or revenue generating suggestion!

Modesto Junior College and Yosemite Community College District are seeking suggestions for saving costs and cutting expenses to help handle the huge loss of revenue from the state. Click here to download a list of the suggestions that have been received to date.  If you have a suggestion that is not reflected or represented on this list, you can provide a suggestion to the MJC Office of Budget and Planning, Morris 211 or visit http://www.yosemite.edu/chancellor/suggestions.htm to submit your idea online!  Thank you for helping to make MJC more efficient!

Important Things To Know About MJC Fees, FTES and Funding:

The enrollment fee:   The per unit enrollment fee was increased by the State Legislature from $20 to $26 per unit effective for the 2009 fall semester classes!  This money, while it is collected by the college, is sent back to the state (minus a small percentage for processing). Therefore, the MJC budget is NOT directly enhanced by fee increases, as is sometimes assumed by students or the public.  However, this increase generates $80 million in revenues to the State that is used to mitigate cuts to the community colleges.

FTES funding:     The largest portion of MJC's state funding is determined by the college's number of Full Time Equivalent Students (FTES).  The FTES number is not the same as the number of students attending MJC, but rather a formula based on a several of factors. MJC currently expects to finish the 2008-09 fiscal year with 15,794 FTES. Despite community colleges having the highest undergraduate enrollment, we are the lowest funded public education system per FTES in California. In 2007-08, funding per FTES at California Community Colleges was $5,891 as compared to $7,571for K-12, $12,293 for CSU and $18,508 for UC. Although this disparity in funding per FTES has improved in recent years, it still costs the state over twice the amount to educate a CSU student and more than triple to educate a UC student as compared to community colleges!

More students enrolled does not automatically equate to more funding:   It is important note that community colleges are not funded the same way FTES for K-12 schools are funded.  A K-12 school's FTES is the exact same thing a the number of students they have enrolled, not a formula.  In stable financial years the state provides community colleges with funding for FTES growth up to a certain established limit. This growth funding is usually capped around 2% - 3%.  If there are unused growth funds left at the end of the year, (due to some colleges not growing), then those colleges whose growth exceeded the established cap can apply for additional money to help cover this additional growth. However, with the economy in crisis, community colleges throughout California are experiencing growth and the state is offering NO growth money to community colleges for 2009-10.  MJC grew by an estimated 4% in 2008 - 09, exceeding the 2% state growth cap, and leaving the college with an estimated 2% in unfunded growth. The additional 326 unfunded FTES equate roughly to $1.5 million in unfunded growth at MJC!

How can MJC be constructing and modernizing buildings with budget cuts looming?   The new facilities construction and modernization projects scheduled at MJC over the next five years are funded through the Measure E Bond that was approved by voters in November 2004, as well as some earmarked "scheduled maintenance funds" from the State.  These college facilities are needed more than ever with MJC's growing enrollment.  The challenge that will be faced by the college and the district, as these projects are completed and come online, will be meeting the staffing needs to secure, service and maintain the new buildings.