New State Funding Formula for the 2018-19 Antelope Valley College Budget
The State of California has approved a budget for community colleges that includes a new funding formula. The notable highlights of the adopted budget for community colleges is the change in funding formula for the system resulting in an additional $269 million and the online college implementation with $100 million in one-time funding and $20 million in ongoing funding. The increase in base allocation funding is needed to fund STRS & PERS employer pension obligation increases. There is also a significant investment being made in the K-12 integration of strong workforce for an ongoing increase of $164 million.
The new funding formula utilizes a 3-year implementation. This year’s funding will be based 70% Base enrollment on a 3-year average FTES, 20% Supplemental Grant using headcount of Pell recipients, College Promise Grant recipients and AB540 Students, and 10% Student Success Initiative Grant based on outcomes of progression and living wage. By 2020-2021, the formula will be 60% base enrollment, 20% Supplemental Grant, and 20% Student Success.
There is hold harmless language to ensure that all community colleges receive no less than 2017-2018 plus COLA. An oversight council has been formed to monitor the implementation of the funding formula. This new funding formula creates significant disparity between the different districts in the California Community College system. For example, the College of the Canyons rate per FTES is $6,195. Palo Verde College’s rate per FTES is $18,786. A coalition is being formed by those districts who are in a hold harmless state. It is expected that this will lead to a change in the funding formula, which is why AVC is treating the funds in 2018-2019 as one-time funding.
The District has been including 3-year budget projections in the adopted budgets, prior to the implementation of the funding formula, showing significant deficit spending. This is mainly due to increases in PERS & STRS employer obligation increases and agreed upon salary improvement increases. The cost to the District’s unrestricted fund is expected to increase in 2018-2019 alone by $900,838 and will continue to go up until 2023. PERS is expected to climb to over 27%.
The State funded COLA between 2013-2014 and 2017-2018 has been 5% total. The District, in this same period, gave salary improvements to all groups of at least 9.13% in on schedule increases and 2% in 2015-2016 and 2% in 2016-2017 as a one-time off schedule increase. The District also increased the health & welfare cap from $13,385.10 to at least $14,000. The combinations of these ongoing increases were funded with one-time funding and have ongoing funding implications that created out-year projections showing significant deficit spending.
Even though revenues increased by over $12 million, expenditures rose from the prior year by $1.8 million. Over $7 million was the projected deficit and the $12 million in additional revenue leaves a surplus of roughly $5 million in additional revenue that is being treated as one-time funding due to the risks associated with the anticipation of a change in funding formula.
For more detailed information including Board of Trustees budget presentations, please visit: https://www.avc.edu/administration/busserv/budgets