Sienna Jackson / Roundup
Gov. Schwarzenegger signed a roughly $126 billion budget into law Friday that will cut funding for community colleges by $129 million, according to a summary of the budget published by the Department of Finance that night.
The reduction in funding is in addition to the $840 million owed to community colleges that the state has been deferring since July.
“It wasn’t that they deferred the payments, it’s that the money wasn’t there,” said Kathleen Burke-Kelly, president of Pierce College. Kelly sent word of the budget delays in an email to faculty last September, a day after the third payment of $450 million was missed.
“It’s really, in many ways, it’s unconscionable,” said Kelly on the day of the bill’s passage.
The roughly $126 billion budget was passed 100 days overdue, four months into the fiscal year. The lateness of the budget’s passage has resulted in millions of missing dollars that fund everything from course offerings to the daily operations of campuses statewide.
“It’s too late to undo the damage by this delayed budget,” said Scott Lay, president and CEO of the Community College League of California, a corporately backed non-profit that lobbies for the California Community College system in Sacramento.
“We estimate that community colleges have spent over $5 million in fees and interest to borrow money to compensate for the late budget and cash deferrals the state has imposed on community colleges,” said Scott. “This could have funded 1,200 community college classes, at a time where students are being turned away every day.”
While Pierce College has not needed to borrow money to cover expenses—instead relying on a reserve fund of around $9 million—four of the college’s sister schools in the LACCD system have borrowed money through the Los Angeles County Office of Education this past year.
“The Los Angeles County Office of Education assists K-12 and community college districts to secure a type of short-term borrowing known as a Tax and Revenue Anticipation Note,” said Margo Minecki, public information officer of the LACOE.
“A TRAN must be used within the fiscal year to address cash-flow issues. For example, a district might have $10 million in obligations in December but only have $5 million in the bank, and will not get more money from the state until March. The district can borrow the difference until it receives funding from the state through a TRAN,” she said.
The premier investment bank RBC Capital Markets, a subsidiary of the Royal Bank of Canada with offices in over 50 countries, coordinates the community college LACOE TRAN borrowing program, according to Minecki.
Representatives of the company’s North American branch did not respond to inquiries about the $5 million in interest fees community colleges have paid to cover the loans, needed to pay for general expenses in lieu of a budget.
Kelly said that with Pierce’s reserve fund, the college could last without intervention from the state through December, before it would result to borrowing TRAN money from RBC. “It’s hard to know what they’ll cut back on. If you’re funded by the state, they can come back and take that funding from you,” she said.
The lateness of the budget also froze Cal Grant payments for more than 60 percent of community college students for the fall semester, money used to cover educational expenses such as books, childcare and transportation.
Of the roughly 41,000 students awaiting aid, at least 665 of them go to Pierce.
“If the budget was finalized in a timely manner, students would have gotten it the first week of school,” said Anafe Robinson, director of the Financial Aid, Scholarships and Veterans Office at Pierce. “I know already, here at Pierce, we have received over 17,000 financial aid applications,” she said.
Since those statistics were dated Sept. 30 of last month, Robinson notes, this number may have grow significantly. “We still have eight months left to go in the financial aid application cycle,” she said.
Everette Nelson, a 21-year-old music major, opted out of applying for a CalGrant this semester. He said the doubt surrounding whether a budget would be passed deterred him.
“I didn’t apply because there’s no money in America, period,” he said. “[The budget] kinda sucks, it means nobody’s making money.” Nelson will be applying for a CalGrant within the next few weeks, to begin paying for his next semester.
Even with the budget passed, it is uncertain of how soon money will reach colleges or their students.
“My friend already got her check,” said Chris Pham, 23-year-old business finance major. “I looked for mine and, nothing. I’m really disappointed.” Pham would’ve used his grant money to pay for books and supplies.
With a budget for the state only recently passed, it is uncertain of how soon the provisions to fund community colleges and their students will take effect.
“Considering how bad the budget situation is in California, nationally, I think we’ve done as well as can be expected,” said Kelly. “We’ll be able to do what we can. I mean, it’s never enough to really serve everyone who needs our services.”
A breakdown of the budget for the California Community Colleges system (CCC), with statistics from the legislature’s Legislative Analyst’s Office:
- Another payment deferral of $189 million, to be held until the 2011-12 fiscal year.
- An increase of $108 million to cover over-enrollment in schools. This falls short of the estimated $126 million needed to cover roughly 200,000 unfunded students.
- $300 million in settlements from the 2009-10 fiscal year to be distributed gradually over the next few years.