California State Budget Analysis

The 2020-21 budget relies on federal aid to avoid deep cuts to public universities.

Governor Newsom signed a $202.1 billion budget spending plan earlier this week that was passed by the California Legislature. The June 2020-21 budget reverses deep cuts to health and social services made in the May Revision—despite a projected $54 billion deficit driven by the COVID-19 pandemic—by delaying some payments and using various reserves. Additionally, the budget relies on $14 billion in federal aid funds that are still pending in Congress. Our two public university systems would receive a total of $971 million from the pending federal funds-- $499 million for the California State University (CSU) and $472 million for the University of California (UC). The June budget also defers about $1.2 billion in funding to the California Community Colleges (CCC).

This budget takes a positive spin to preserve access to higher education, however the uncertain and volatile future may mean the state is simply pushing off tough decisions. The approach of deferrals over cuts aims to preserve access for students to our community colleges, but this strategy assumes the state’s economy will recover quickly and economic forecasts are hazy. Similarly, access to the CSU and UC are preserved in the near future based on the assumption of federal aid availability, but federal funds may never appear. We appreciate these trade-offs protecting our higher education system in the midst of a pandemic, indicating our leaders are prioritizing investments in equitable postsecondary and workforce opportunities and outcomes to help rebuild our state’s economy.

California Competes supports Governor Newsom and the Legislature’s efforts to prioritize the needs of California’s most vulnerable and bet on the future by maintaining access to higher education and workforce development programs.

—Dr. Su Jin Gatlin Jez

The June budget also provides some relief to related programs. Specifically, the budget includes:

  • Restoring $150 million to the Strong Workforce Program from cuts proposed in the May Revise;
  • Encouraging and expediting the development of short-term career technical education courses to address the impacts of the COVID-19 pandemic;
  • Decreasing $5 million of $20 million in ongoing funds and $40 million from the $117 million in unspent one-time funds for Calbright College, which the Legislature’s proposal defunded completely;
  • Providing emergency financial aid to undocumented students at the CCCs, CSUs, and UCs by reappropriating $7.5 million one-time General Fund from the Cal Grant B Service Incentive Grant in the 2019 Budget Act and redirecting the Grant’s $7.5 million funding in 2020-21; and
  • Providing $10 million General Fund investment for the Social Entrepreneurs for Economic Development initiative to support economically disadvantaged communities facing significant barriers to employment by advancing economic mobility through entrepreneurial opportunities.

“The budget passed demonstrates our elected leaders’ hope for a quick economic recovery and relies on significant support from the federal government. If either of those contingencies do not come true, the state has more tough decisions to make,” said California Competes Executive Director Dr. Su Jin Gatlin Jez. “California Competes supports Governor Newsom and the Legislature’s efforts to prioritize the needs of California’s most vulnerable and bet on the future by maintaining access to higher education and workforce development programs.”

As we are in the middle of a health and economic crisis, our leaders must focus on investing in our higher education institutions and students. These institutions drive economic and social mobility, especially for the over 4 million unemployed Californians. Without federal relief, California will be forced to revisit the proposed cuts that will hinder our public institutions’ ability to help advance the skills adults need in order to rebuild our economy post COVID-19. We will continue to work with Governor Newsom and the Legislature to protect the equitable postsecondary opportunities that so many adults rely on.

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