Welcome to the New Year! I know that we will have a rewarding winter quarter as we provide our students with a quality education, despite the economic challenges we face. Across Foothill and De Anza, enrollment is healthy and classes are full. The quality of our teaching and student services is self-evident. Just walk across our campuses and you will clearly see the artful transmission of knowledge, inspiration, and-many times over-the wisdom of experience that give our students opportunity, skills and hope for a better future. Thank you for keeping quality education in the forefront of our goals and all that we work to accomplish.
Last Friday we received the governor's budget proposed for 2004-05. California Community Colleges were spared the devastating cuts slated for health and welfare programs with a modest increase of $120 million from Proposition 98 K-14 funding and $91 million from a proposed increase in community college fees.
In the coming months the governor's budget proposals must make their way through an arduous legislative process, state bond referenda in March, and the May Revise until the budget is adopted in late spring or during the summer. Here is a summary of the budget highlights and the impact on Foothill-De Anza.
Growth-Student Access to Higher Education
The proposed budget provides 3% in growth funds ($120 million) statewide to allow 32,000 more full-time equivalent students (FTES) to attend community colleges. As you know, student demand over the past two years has been tremendous and due to state budget cuts, we have had to turn students away from our doors. Growth funding will allow us to provide more classes and support to serve these students. However, this increase does not solve our financial problems as additional dollars in faculty and support costs will be necessary to achieve the growth. Foothill-De Anza's growth target will likely be in the 1% range as the allocation is tied to a complex state formula for each community college district.
Cost of Living Adjustment (COLA)
The proposed budget provides no COLA. This is a major disappointment. The costs of education keep rising and there is no budgetary relief in sight. Health benefits continue to escalate at an estimated 15% per year; salaries rise each year due to step and column increases; and with "B" budgets slashed over the past two years, we have a backlog of instructional and student support equipment to replace. Even though both K-12 and community colleges are funded by Proposition 98, K-12 is slated to receive a COLA this year and we are not. Further, K-12 will again be provided with funds to cover increases in PERS retirement costs for classified employees, but there is no such provision to cover these increased costs for community colleges.
Enrollment Fees
The governor proposed a 44% increase in the fees our students pay for college. This increase is on top of the 64% fee increase this year. We estimate that our enrollment fee would increase from $12 to $17 per quarter unit. The increase would allow about one-third of the students who receive financial aid to access the maximum federal Pell Grant award of $4,000 per year and continue to attend college. However, the other two-thirds of low-income students, middle-class students and families who struggle to make ends meet in these difficult economic times will be unfairly disadvantaged by these fee increases.
To make matters worse, the governor proposed a differential fee of $50 per unit for students who have a bachelor's degree or higher. Foothill-De Anza students with degrees would pay $33 per quarter unit. This proposal was initially implemented in the early 1990s and then rescinded because of its adverse effect on student access. Foothill-De Anza's enrollment plummeted due to the differential fee and it took us several years to recover. Because about one-third of our enrollment comes from students who have degrees, this new proposal, if adopted, will present a major challenge for us. It is an unfortunate proposal because many of these students have been displaced from their jobs and are seeking retraining or new careers in order to reenter the workforce.
Equalization
The governor proposed $80 million for equalization to augment community colleges that are funded below the statewide average. Foothill-De Anza, at $3,600 per FTES, is one of these districts. Thus, we expect a small amount of funding to come to us from this allocation to bring us closer to the statewide average, if this proposal holds. If additional dollars flow to our district from this equalization proposal, it will assist us with our ability to maintain current levels of service without further cuts.
Mid-Year Cuts
One of the pleasant surprises in the release of the governor's budget was that there were no mid-year cuts proposed for our colleges that would have created further hardship this year.
In the coming months, legislative discussions will focus on these and other proposals for adjusting the funding for growth, COLA, fees and equalization. In the next few weeks, Vice Chancellor of Business Services Mike Brandy and his staff will provide us with a more detailed analysis of the governor's proposed budget, beginning with the meeting of our board of trustees at 7 p.m. on Tuesday, January 20, in the board room, followed by campus budget updates. You are invited to attend any or all of these meetings.
President Bernadine Chuck Fong, Interim President Judy Miner, Vice Chancellor Mike Brandy and I will keep you informed about the budget as it unfolds this winter and spring. If you have questions, comments or suggestions, let us know. Our doors are always open to you and we will do all that we can to keep them open for our students. As always, I wish each of you a happy and healthy New Year.
cc: Foothill-De Anza Board of Trustees
Foothill-De Anza Colleges Foundation Board of Directors
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