Next Tuesday, the district will present a tentative 2020-2021 budget to our Board of Trustees. The projected General Fund revenue for the 2020-2021 fiscal year is $7.1 million (15%) lower than the 2019-2020 fiscal year.
To address the reduction in revenue, all expenses will be reduced where possible. We are moving forward with a 15% reduction in salary and benefit costs, taking the form of three furlough days per month and salary freezes for administrative, management, and confidential employees. We are currently negotiating 15% reductions with both labor groups (classified and faculty). Similar reductions are being made in general operating expenses where possible. Unfortunately, we are unable to reduce other expenses such as debt service, general liability insurance, utilities, retiree health benefit expenses, and software contract costs. As a result of these “fixed” expenses, a transfer from capital outlay will be required in the amount of $1.2 million. In addition, retiree health benefits will be paid from the Other Post-Employment Benefits (OPEB) trust instead of the General Fund.
Previous financial shocks have generally hit colleges on either the revenue or the expenditure side of the ledger, but the COVID-19 pandemic has hit both, simultaneously. Revenue from apportionment is 15% less than anticipated for next year and was 5% less than budgeted for the current year, while deferrals and mandated increased costs (PERS, STRS, and health benefits) are required. The dual cuts to our base funding and two-year deferrals of payment from the state has exceeded our financial flexibility. Prioritizing financial liquidity has forced us to reconsider ambitious plans to grow our way out of budgetary challenges. By the end of this month, we will learn outcomes of the negotiations between the Governor’s May revised budget and Assembly/Senate alternatives submitted last week. As we look to late August, our focus will be on assessing the second, updated release of the 2020-2021 state education budget. By September 1 we will know more of the extent of federal support provided to the state to restore lost revenue due to the pandemic.
It is important that we all recognize contingency planning has become the norm. Everyone is learning about their thresholds for planning, with uncertainty being the central characteristic. The tentative budget is not a pretty sight. No one is happy. Many will be challenged to make ends meet, especially those families already dealing with job losses. All of us are frustrated and some are questioning choices, approaches, and decisions. That’s to be expected, but we must maintain reality-based, honest, and open communication rooted in belief and patience with each other. We will weather this storm as we have done in 2009, 2003, and 1978. We will recover. Together. But let me be clear: What we were used to is in the past without state and federal relief, including our compensation structures which are a reflection of a different economic era.
Our colleges will remain vibrant, dynamic, diverse places. The colleges that thrive post pandemic will be those that understand how humans cross the boundaries between the physical and digital – and back again. We must reimagine what community looks like after this fundamental disruption. We will be called upon to create community anew, for every single student, staff, or faculty member, whether scattered around the region or right here, right now. I have confidence that the breadth and depth of a true liberal arts education will equip us to adapt and innovate.
American higher education will be essential, not only in the immediate challenge of stopping the Coronavirus and removing systemic racism barriers, but also to larger questions of finding new ways to learn, teach, form communities, and solve the world’s next wave of problems. However events move around us, we will keep moving too. This crisis has also revealed how good teaching is important, and how difficult it is. It takes work, expertise, flexibility, and support; and it’s as much about building meaningful relationships as it is about delivering disciplinary content and skills. As importantly, education – even online – requires ceaseless support to keep going. The Coronavirus crisis should draw our attention to something else – the essential work of college and district employees in keeping our operations going. Our technology, physical facilities, business, and social systems require constant maintenance, upkeep, and care.
We must care for our students in ways that recognize they are more than students, and that their capacities to be students are interconnected to insecurities – persistent inequality, housing, food, technology and access to health services – and vulnerabilities – racialized, gendered, and class-based – the structures of which we must study critically and aim to dismantle as we adapt to our new world. Higher education will never work if students’ basic needs go unmet.
As the global pandemic deepens for a potential return this fall, adaptation is the name of the game. Please join us for our upcoming West Hills Town Hall meetings this summer, scheduled for June 29 at 10:00 am and another on July 29 at 2:00 pm. Links for participating in the Town Hall meetings will be provided as we approach each date.