Looking Back/Looking Forward on the State Budget

Just as the California Community Colleges prepare for the 2025-26 budget season, the Legislative Analyst’s Office (LAO) has prepared a series of analyses on the current year budget, 2024-25, tracing the development from the Governor’s January proposal to the final approval in June.

For the CCCs, the 2024-25 budget fell victim to an overestimation of revenue in Proposition 98 of $9.8 billion dating back to 2022-23. Addressing that shortfall within the context of this past year’s budget discussions involved intense lobbying and creative thinking, resulting in a plan to shift payments from 2022-23 to 2023-24 and from 2023-24 to 2024-25, and to defer spending from June 2025 to July 2025, thereby moving associated costs from one fiscal year to the next.

As noted by the LAO, the Proposition?98 package across the three-year budget window reflects an agreement between the Governor and Legislature “to (1)?fund colleges and schools?above?the minimum guarantee in 2022-23, (2)?fund?below?the guarantee in 2023-24 (by statutorily suspending the requirement), and (3)?fund?at?the estimated guarantee for 2024-25.”?

Notwithstanding the complexity of these maneuvers, the State was able to simultaneously maintain spending for California Community Colleges—even providing a 1.07 percent COLA and .05 percent for growth—and maintain the constitutional principles of the Proposition 98 guarantee.

Read the LAO spending report on Higher Education and the more detailed analysis on Proposition 98. ???

Shifting to next year, the California Community Colleges Board of Governors will soon be considering its Shared Advocacy Request which contains the System’s proposed Budget Change Proposal (BCP) for 2025-26 and its ideas for sponsored legislation in the new year. Each State Agency is required to submit a BCP, representing a priority list for new spending in the coming year, to the Department of Finance for consideration in the Governor’s January Budget proposal.

Consistent with the League’s input, this year’s BCP stresses the importance of fully funding growth and providing a COLA for all categorical programs. While several parties in the Consultation Council noted that the BCP does not specifically request a COLA for base apportionment—typically the System’s top priority—the Chancellor’s Office has given its assurance that it is part of the package and will be transmitted as such.

Among the other requested items for ongoing spending are $10 million for Financial Aid Office Administration and $10 million to expand the Rising Scholars Network. While The League had advocated top placement of Deferred Maintenance and Instructional Equipment for one-time funds, the BCP prioritizes Establishing a Systemwide Common Data Platform and Expanding Credit for Prior Learning Policies. ?

The Governor can choose to adopt, amend, or reject the BCP with advocacy groups emphasizing their own priorities in the budget process. Needless to say, there is wide consensus that the State is in the midst of a multi-year period of economic uncertainty with limited opportunity for significant new investments in 2025-26. ?

Follow the League’s social media for updates on the budget process in the new year. LinkedIn | Instagram | X (Twitter)