Chancellor's Message: California Budget 2024-25 May Revision

May 16, 2024 | Gregory Smith, Chancellor of the San Diego Community College District

San Diego Community College District Chancellor Gregory Smith responds to the Governor's May Revision to the January California Budget proposal. Here are some key takeaways:

- The May Revision continues to avoid cutting or deferring community college funding

- The proposed COLA has increased to 1.07% (from 0.76% in the January Proposal)

- The revision maintains the proposed $60 million in new funding to expand nursing degree programs

- The overall budget situation has improved since January when the Governor’s office projected a $38 billion shortfall and the Legislative Analyst’s Office projected a $73 billion shortfall

- Currently, the Governor’s office is projecting a $27 billion shortfall and the LAO is projecting a $44 billion shortfall

- The May Revision proposes to address the $27 billion shortfall with a combination of Revenue and Borrowing ($5.2B), Delays and Deferrals ($5.2B), Reductions ($3.6B), and Shifts ($3.4B)


Each year, the Governor issues a January Budget Proposal for the upcoming fiscal year. The Governor then issues a Revision in mid-May that reflects input from various constituencies and updated revenue and expense projections. The final state budget is signed into law by June 15 each year.

The Governor released the May Revision to the 2024-2025 January Budget Proposal on Friday, May 10. While the update contains noteworthy changes to deal with revenue shortfalls, it maintains the state’s commitment to fully funding community college districts in support of accessible higher education opportunities for California residents. Budget committees in the Assembly have signaled clearly their concerns about the budget shortfalls and desire to see more immediate cuts, including in higher education. Over the next month the Assembly, Senate, and Governor’s office will negotiate the terms of the final budget. Our District will continue to advocate strongly to protect community college funding, including a fully-funded COLA.

Governor’s May Revision Proposal Overview

The May Revision continues to protect community college funding and avoids any cuts or deferrals. This provides our system and District with stability and predictability in our funding, which are essential as we invest in expanding full-time faculty employment, basic needs supports for students, and establishing new baccalaureate programs.

The significant shortfall in state revenues has resulted in a more simple budget proposal for community colleges than in typical years. The only new funding proposed is $60 million in one-time funding to expand nursing degree programs. This funding would apply to new and existing ADN programs and could be applied to establishing BSN programs if the proposed legislation to authorize a pilot for community colleges to offer BSN degrees is enacted.

The proposed budget includes additional funding for enrollment growth, which recognizes several districts have recovered from pandemic-related enrollment declines. The growth funding further demonstrates the Governor’s commitment to maintaining and expanding access to higher education for state residents.

The impact of a 1.07% COLA for the San Diego Community College District will be at least $3.38 million in new revenue. The 2024-2025 fiscal year will establish a funding floor as the hold harmless provision to the Student Centered Funding Formula (SCFF) will expire, unless extended in the budget act, which appears highly unlikely. SDCCD’s hold harmless funding in the 2023-2024 fiscal year is $316,190,578. A 1.07% increase would be $3,383,239 in new funding. This would establish a funding floor for the District of $319,573,817. This means our District would have to earn more revenue than the funding floor in future years in order to received COLA increases. Fortunately, we have increased enrollment significantly in each of the last two years and are on track to be out of hold harmless in 2024-2025. New ongoing revenues will be distributed in accordance with the Resource Allocation Formula (RAF).


The Governor’s clear commitment to community college funding is heartening. The state revenue situation is worrisome. If future year revenues do not meet the Governor’s office or LAO projections, we may experience budget cuts and funding reductions. While we may face more challenging financial situations in 2026 and 2027, the progress we have made since 2020 in rebuilding our general fund unrestricted reserve has positioned our District to withstand the uncertainty and manage reasonable reductions. The efforts being made across our colleges and District to grow enrollment, connect more students with financial aid resources, and invest in persistence and success will further secure our financial condition by maximizing our SCFF revenue performance.

We will provide more detailed updates once a final budget is approved in late June or early July.

Thank you,
Gregory Smith 
Nancy Lane
Acting Vice Chancellor, Finance and Business Services

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