May 2020-21 Budget Revision Analysis

by Gail Yen

Senior Policy and Research Analyst


Topics: Affordability, Community Colleges, Employment, Four-Year Colleges, Higher Ed Finance, Public Agenda, Ed Equity, Adults, COVID-19, Workforce


May Revise shows COVID-19’s impact on higher education but offers policies to support economic recovery

The impact of the COVID-19 pandemic on current economic realities is especially significant as Governor Gavin Newsom released a stark 2020-21 May Revision budget proposal yesterday. The proposal shows reduced spending across schools, community colleges, and other budget areas including healthcare and early childhood in order to close a deficit of more than $54 billion brought on by the COVID-19-induced recession. However, there are some bright spots with funding for the three public higher education segments — the University of California, the California State University, and the California Community Colleges — with the governor’s focus on equity and access to ensure the state can accommodate students with constrained resources. Given the decreases in higher education spending, we are encouraged that the budget proposal prioritizes equitable postsecondary opportunities and outcomes that directly align with California Competes’ priorities of making higher education more responsive to workforce needs and leveraging employment disruption to make college a reality for adults.

With public education being one of California’s four core values, the May Revision proposal prioritizes key higher education programs for students to develop the skills needed in order to help build a resilient state economy. This is shown through the governor preserving investments made in major financial aid programs, including community college tuition waivers, Cal Grant awards, and the students with dependent children Cal Grant supplement. Additionally, the Governor’s May Revision includes:

  • Expectation of each segment to harness its innovative strength in order to:
    • Create, expand, and continually improve the quality of online educational opportunities that are broadly accessible;
    • Adopt policies that better enable underrepresented students interested in job reskilling to enroll in college courses and programs; and
    • Expand opportunities and setting goals for competency-based education (CBE) and credit for prior learning (CPL) as low-cost ways for more students to get degrees;
  • Statutory changes to suspend procedures on the development of short-term career and technical education (CTE) courses and programs to expedite the offering of these programs and courses; and
  • Consolidation of the state’s workforce training programs under a new Department of Better Jobs and Higher Wages including the California Workforce Development Board, the Employment Training Panel, Workforce Services Branch, and Labor Market Information Division to better support data, policy, and program analysis.

While it’s unfortunate to see cuts to higher education, we are encouraged that, philosophically, Governor Newsom recognizes the structural inequities that existed before COVID-19 and is attempting to address them even during the pandemic.

Dr. Su Jin Gatlin Jez

While there is prioritization of affordability and access to higher education and workforce development opportunities along with additional funding from the CARES Act allocated to each of the three segments, there are also notable cuts to other programs within each segment. Specifically, the proposal includes:

  • Withdrawing the $4 million one-time General Fund to support degree and certificate completion programs at UC extension centers; and
  • Withdrawing $6 million one-time General Funds to support degree and certificate completion programs at the CSU.

These cuts could be even deeper if the federal government fails to provide billions of dollars more in pandemic assistance. The proposal dictates those losses through:

  • A total decrease of $10 million ($6 million and $4 million) limited-term General Fund for summer term financial aid at UCs and CSUs respectively;
  • A reduction of $83.2 million Prop 98 General Funds, of which $40.4 million was one-time for support of the apprenticeship programs, the California Apprenticeship Initiative, and work-based learning models;
  • A decrease in support for the CCC Strong Workforce Program by $135.6 million Prop 98 General Fund;
  • A decrease in support for the Student Equity and Achievement Program by $68.8 million Prop 98 General Fund; and
  • A reduction for support for Calbright College by $3 billion Prop 98 General Fund

“While it’s unfortunate to see cuts to higher education, we are encouraged that, philosophically, Governor Newsom recognizes the structural inequities that existed before COVID-19 and is attempting to address them even during the pandemic,” said California Competes Executive Director Dr. Su Jin Gatlin Jez. “The state can still improve student access to and success in higher education in these challenging times.”

The unprecedented economic crisis brought on by COVID-19 has shelved new state investments in programs including work-based learning models and apprenticeships, but our state’s public institutions are what’s needed to advance the skills needed to weather this crisis and rebuild our state’s economy. There are over 4 million Californians who face unemployment and many millions more who are teetering on the edge who will rely on higher education to upskill and reskill. We hope to continue working with the Newsom Administration to ensure that equitable postsecondary opportunities continue to be a priority to ensure our state’s regional economies and communities can weather this crisis, recover quickly, and withstand future threats.