Where’s the Good News?

It’s pretty clear there’s not much to celebrate. Rising fears of a double-dip recession is being played out by Wall Street’s roller coaster ride. Our national unemployment rate is stuck at 9.1 percent with California’s climbing back to 12 percent. It’s fairly clear that toxic gridlock in both Washington and Sacramento will preclude a genuinely helpful economic recovery initiative for the next year.

In the midst of this, community colleges may endure another round of fee hikes and budget cuts. If California fails to hit the magic $4 billion additional revenue built into the 2011-12 budget assumption, a tiered series of cuts is automatically triggered.  

   Tier 1 cuts occur if revenues fall within $2 billion of the projected $4 billion increase. Community colleges could see a General Fund reduction of $30 million offset by a hike in student fees to $46 per unit. Tier 2 cuts happen if revenues fall below $2 billion of the projected $4 billion. At this point, community colleges could receive a reduction to apportionments of up to $72 million beyond Tier 1.

The bad news doesn’t stop there as the $10 per unit student fee increase cannot practically be implemented for the spring 2012 academic term. This creates an additional revenue shortfall which may result in another workload reduction (fewer students, fewer classes, fewer faculty, etc.) or other cuts to programs. As much as we hope to avoid the Tier 1 or Tier 2 reductions, the weak economy is not producing the anticipated revenue. On August 9, State Controller John Chiang released his monthly report covering California’s July cash balance, receipts and disbursements. It revealed an overall shortfall of $538.8 million (10.3 percent) below projection, categorized by the following:

• State income taxes fell above projection by $89 million;
• State sales and use taxes fell below projection by $139.4 million;
• State corporate taxes fell below projection by $69.5 million;
• “Other revenue” category fell below projection by $419 million.

So where’s the good news?

First, we need to acknowledge that while industries and businesses come and go, the demand for higher education is rising. According to the July 2011 Bureau of Labor Statistics, unemployment rates by educational attainment are as follows:

• Less than a high school degree, 15 percent
• High school graduation with no college, 9.3 percent
• Some college or Associate’s degree, 8.3 percent
•  Bachelor’s Degree or higher, 4.3 percent

These numbers demonstrate a tectonic shift in the American economy. Higher education is no longer a luxury but an absolute necessity. Once an individual has even some college education, he or she is marketable enough to compete in today’s troubled economy. In fact, the overall picture for “some college or Associate’s degree” is nearly a full percentage point below the national unemployment rate. As we enter into our next presidential election cycle, these statistics will provide us with important leverage to promote community colleges.

Second, both the Governor and Lt. Governor are now prioritizing economic development. This will create further opportunities for CCCAOE to engage policymakers on the need to support our institutions and programs.

In August, Governor Brown appointed former Bank of America executive Michael E. Rossi as an unpaid go-between for businesses, labor and the Administration to invigorate the state's economic development infrastructure and advise the governor on regulatory, legislative and executive actions to stimulate job creation. Meanwhile, Lt. Governor Newsom has begun promoting his “Economic and Competitiveness Agenda for California” which contains a discussion on the need for California’s higher education systems to focus on access and affordability.

Third, CCCAOE has begun working closely with the newly appointed Vice Chancellor for Economic and Workforce Development, Van Ton-Quinlivan, in advocating for CTE and EWD. With more than 15 years of experience in a variety of corporate leadership roles, most recently as director of workforce development at Pacific Gas & Electric, Ton-Quinlivan brings a new sense of purpose, energy, and collaboration to the Chancellor’s Office. As an added plus, she will be a keynote speaker at CCCAOE’s upcoming conference, scheduled October 19-21 in San Diego.

In normal times, the concept of “good news” should be a lot better, but, as we’re all aware, these aren’t normal times. Even under the worst of circumstances, however, it is essential that we take note of positive developments. New data, new leadership and new collaborations all represent movement in the right direction. Let’s build upon these as we continue the challenge of keeping open the doors of opportunity to our invaluable programs.