.....I admit it. When it comes to fiscal matters, I’m pretty clueless......Occasionally, I hear our union leaders carp about the huge pile of money the trustees are sitting on, thanks to our “Basic Aid” gravy train—apparently, the SOCCCD is nearly unique among cc districts with regard to funding. We’re rolling in dough, they say, and yet the colleges are kept on miserly budgets. And why no raises for faculty? And why are these trustees squirreling away so much of the taxpayers’ money? “It’s obscene,” they say.
.....I guess so. I’m trying to find somebody to explain all of this.
.....I try to follow the bouncing Basic Aid ball, but it isn’t easy. Every time somebody explains that funding model, they make it sound as though budget cuts in Sacramento don’t affect us, since we get our money from local property taxes, not as an allocation from state budget money earmarked for community colleges.
.....OK. I get it. Or do I?
.....A few days ago (April 14), we received state budget news from Tracy Daly. Evidently, the district has been sent an “update” written by Robert Blattner, which was attached to Tracy’s email. The upshot seems to be that April tax collections are “down.” The news is bad and will continue to be bad, budgetwise.
.....But wait! The SOCCCD is a Basic Aid district. That means we get most of our funding from local property tax, not from the state via money budgeted for community colleges. Isn’t that how it goes?
.....Maybe so. After laying out the grim April tax facts, Blattner presents what he takes to be an even more “solid” fact:
According to a just-made-public survey of County assessors…, statewide growth in local property tax revenue for the budget year is sharply below earlier projections. The survey, which included most of the state’s counties and all of its large ones, projects a 4.5 percent growth between current and budget years, compared to the 7 percent forecast by the Administration…. This news doesn’t affect school districts directly (except for Basic Aid districts, which receive their local property taxes instead of revenue limit funding).
.....Blattner is saying that the bad news about property taxes does directly affect us. OK, I get that.
.....In her email, Tracy quotes the Chancellor:
“At this point, the State budget shortfall is being projected at $22 Billion. It is anticipated that the budget will get worse as the State receives the tax filings by April 15 and homeowners increasingly request reappraisal of their property taxes due to the declining housing market.”
.....--OK, I get the “homeowner” part. We’re Basic Aid. But is there any reason why the budget Stinkeroo should affect us, beyond the property tax situation?
.....Tracy (Mathur?) goes on to say:
The Orange County Community Colleges Legislative Task Force is working to communicate to legislators our concern over proposed cuts to community colleges, and gathering support letters to present to the Governor. More information will be sent out on this campaign soon.
.....--Yeah, but we’ve gotta be the odd duck in that crowd, right? These other districts aren’t Basic Aid, and so they’ve got to worry about these cuts. Not us. We are Basic Aid. What we want isn’t quite what everybody else wants, right?
.....Help me out here.
.....Tracy finishes with:
Board Vice President John Williams and Chancellor Mathur will be in Sacramento tomorrow [i.e., on the 15th, last Tuesday] to join the Community College League of California in speaking with legislators about the budget......But, again, among this delegation, we’re odd man out, right? Insofar as SOCCCD is concerned, we don’t care about no stinkin’ state budget, right?
.....I figure that, if this is confusing to me, it’s likely confusing to other folks too. So maybe some of you out there can enlighten the benighted—in plain English. I’d appreciate it.
10 comments:
Chunk,
It only impacts us in the sense that our Basic Aid budget is factored against locally raised tax collections. If they fall we get less. What is important to understand though is that what our District takes in far exceeds what it gives to the two colleges. Any shortfall in Basic Aid simply means the Board of Trustees can't amass as large a surplus as they have in the past. The "Program Based Budget" model the District uses to fund the two colleges is a complete artifice. It is if to say, well, if you were one of those Districts in trouble this is what you'd get. Well we aren't. That's why the colleges are struggling for money and the Board of Trustees is sitting on pretty close to $100,000,000 in cash reserves. When that money gets spent it will be some rainy day.
The truth is the the Board of Trustees refuses to allow the voters of our District the opportunity to vote for a bond and build us new buildings. They think they know more than the voters and use the Basic Aid reserve money to build them instead. So not only is the BOT mismanaging the budget, they are userping the voters right of self detrmination.
OK, you're saying that we don't have a money problem except an artificial one imposed by the board. Got it.
But why exactly are Mathur and Williams bothering to lobby the legislators? Why are we trying to get the ear of the governor? What are we lobbying for them to do? And how will it help our colleges?
Are we doing this lobbying because of the artificial board-imposed budget constraints on the colleges? Really?
(And if we're sitting on $100 million, then what's all this talk about increasing our 5% (something like that) reserves? One hundred million is obviously lots more than 4 or 5% of our budget. This stuff never adds up for me.)
Chunk,
It's all a diversion. If the State goes into a deep fiscal crises, the first thing they will do is stop the gravy train we know as Basic Aid and begin what the rest of the State calls "Equalization Reform" We want to look like we support our brothers and sisters in the state-wide system so they don't turn on the super-rich Basic Aid Districts.That way we look like good guys, but still keep all the cookies.
mmmm, cookies! Cookies!
Well, Chunk - here's my two cents:
If, as a result of lower property taxes, the rate of basic aid dollars dips below the rate for program-based budget dollars issued to community college districts from the state, SOCCCD loses its basic aid status and becomes program-based funded just like all of the other districts. We experienced this a few years ago when the county entered into bankruptcy. The BoT is wise in not using basic aid dollars to fund for salaries, which when approved, are continuing expenses year after year. Instead, the BoT uses the excess basic aid dollars we are now fortunate to receive for "one-time expenditures," which do not have massive recurring costs. The reasoning behind this is tantamount to a fiscal "safety net," so the district stays viable during down years that may result in being placed once again in the program-based budgeting pool. Philosophically, the BoT does this so there will be no massive layoffs.
This is one argument I have heard in the past as to why not to use basic aid dollars to fund salaries.
1. OK, so are we in agreement that the district's joining these lobbying efforts (with local districts) will yield us nothing except good will with these districts (who are likely steamed about our gravy train)? That is, it's politics?
2. And are we in agreement that the pile o' money that the board has amassed is huge—something on the order of $100 million?
3. If so, isn't that rather excessive, even if we embrace a very prudent and conservative fiscal philosophy? (I'm no expert; maybe it isn't excessive. Sure seems like it.)
4. If any of this is right, why does the Chancellor never bother to make these things clear? Why the endless talk of going up to Sacramento to fight budget cuts?
During the last budget debacle, the Grey Satan took all the mandated minimum district reserves. Then he had the nerve to require the districts put them back ASAP...how, he did not care.
Our District lost 20% of classified, and we never had a copy guy to lose.
What I smell is going on here is that your disticts property tax funded reserve is being targeted. Property tax doesn't BELONG to the counties, Sacramento lets the counties have it back and then they can use it for whatever anyway. When you are sitting on $100 million of money that has ALREADY been confiscated from the taxpayers that makes you a big fat target. It's alot easier to take money that's already taken than it is to take new money from the sheeple.
Our bigger problem is that GAS is a lying sacko'crap. He got elected to fix the very problem he created anew. We need to impeach him too.
Failure have its rewards.
One more item to consider - categorical funding, for things like vocational programs via VTEA, is state-funded. It can also be a considerable amount of money. The colleges DO have something to lose if State funds are cut...
Want to know why Mathur keeps showing up in Sacramento when he clearly doesn't understand squat and only makes a fool of himself? Because he wants to see and be seen. Too bad his constituents have never watched him at such an event. He makes innane, empty comments and seems oblivious to the ridicule and snide comments made behind his back. He's an embarrassment to your district. Try to keep him at home next time! Other Orange County college officials don't want him anywhere near them. I should know!
Two years ago at one of the OC grand planning groups for our county's workforce at a typical hotel business luncheon with several hundred people in attendance, Raghu made a fool of himself. He was one of the invited speakers and sat up on the dias. The Secretary of State, an articulate woman from Sacramento, had to shut him down because he dronned on and on, mostly talking about himself. People at the district table were cringing. What a sad embarrassment. So little is there in a man who wants so desperately to be taken seriously.
A few months later, talking with a trustee who supports this man, the trustee made the following comment: "I would hate to be pursued by the demons who pursue him" [Raghu].
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