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Today, we're going to do something a bit different, combining the Friday letter and Board report. This is based on the meeting we had this Wednesday, particularly the Preliminary Budget Session presented by Vice Chancellor Marlene Drinkwine alongside Vice President Rich Pagel, Acting Vice President Rick Hicks, and Vice President Christine Nguyen.
It was appropriately a cloudy and rainy day on Wednesday night. Clouds and rain seem to be the tone of the budget news we are hearing from Sacramento. To begin, the Governor's January proposal was not particularly rosy. A state budget deficit number of $38 billion was given for 2024-25. COLA was a paltry 0.76 percent. Much of the budget balancing happened through borrowing, deferrals, and withdrawal from the state's rainy-day fund.
It appears that the Governor's budget may be among the more optimistic outlooks. The Legislative Analyst's Office has identified even deeper losses in state revenue for 2024-25. Using the Governor's proposal as a base, the LAO is now projecting a $73 billion deficit. This increases the likelihood and potential severity of cuts, delays, and deferrals affecting community college funding statewide.
We are already seeing the impacts as a District. The District is likely to experience a decline in revenue next year, something virtually unheard of since the Great Recession. A Fiscal Stability Plan has been implemented to ensure the District maintains its fiscal health. With the hard work of the colleges and the District, through enhancing revenues and reducing costs, the District's budget has improved by more than $5 million. Yet more work remains to be able to weather the continued downturns in state revenues.
The Board has been clear. We will do all that we can to protect jobs and ensure employees continue to have access to the salary and benefits on which they and their families rely. Our plan for fiscal stability is therefore as follows:
- Hiring Freeze that allows only critical management and classified position vacancies to be filled.
- Full-time faculty hires limited to those required to meet program or accreditation needs.
- Efficiencies created through business process improvement.
- Improved instructional productivity.
- Identification of duplicative and redundant software systems.
- Exploration of opportunities for revenue enhancement.
There is no illusion that these actions will be easy or without pain. The Board knows that staff and managers are feeling the strain of colleagues who retired or left without replacement. We know that faculty are having to make difficult programmatic decisions on the experience they can offer to students based on resources. We know that part-time and hourly employees are feeling the loss of opportunities to expand their hours or seek permanent positions.
We are facing rainy days, and we will draw from our version of the rainy-day fund (our reserves) to help bridge the gap for the next few years. However, without continued action to stop deficit spending, we could reach critical low levels as soon as 2026-27. That is something we must try to avoid, even as we serve our students and protect jobs.
With gratitude,
Dr. Lorraine Prinsky
President, Board of Trustees
Dr. Whitney Yamamura
Chancellor
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