Gavilan College could lose more than $10,000 from its reserves
if the state budget impasse continues into September. In addition,
the college could be forced to significantly curb its spring
semester course offerings if community college funding is put on
the chopping block.
Gilroy – Gavilan College could lose more than $10,000 from its reserves if the state budget impasse continues into September. In addition, the college could be forced to significantly curb its spring semester course offerings if community college funding is put on the chopping block.
A standoff between State Senate Democrats and Republicans has dried up the flow of funds from the state to community colleges. In the absence of this money, Gavilan has drawn on its reserve funds to meet its $2 million monthly payroll. By the time state senators pass the $145-billion state budget and reimburse the college, Gavilan will lose at least $8,000 that it would have earned in interest.
“It’s not a good situation,” said Jan Bernstein-Chargin, college public information officer. However, “we are not expecting to have any trouble making payroll.”
The school has enough money in its reserves to pay teachers through at least the next three months, she said. The school has already made a $2 million payment to professors and staff at the end of July and is scheduled to make another at the end of August.
The college typically earns 5 percent annual interest on its reserve funds. The college has already missed out on about $2,000 that it would have earned had a lack of state funds not forced the college to spend on payroll in late July. If state money does not come until mid-September, the college would miss out on an additional $6,000 in interest from funds used for the July payroll and an additional $4,000 in interest from funds used for the August payroll. The total loss would top $12,000.
With State Senators leaving for vacation, it will become harder for proponents of the current budget to get the two-thirds senate majority needed to pass it.
When the dialogue resumes, Gavilan staff and students will have even larger worries than lost interest payments, said Bernstein-Chargin.
“What we’re really most concerned about is when the budget is approved, that the legislative funds us at the level we’ve been planning for,” she said.
To meet steady enrollment growth, the $40 million budget college trustees passed in June included salaries for six new full-time faculty members and an array of new classes. If state senators cut funding for community colleges in an effort to push the budget through, Gavilan could spend much more than half its funds by Jan. 1, the midpoint of its financial year.
“If we’re not funded at the amount that we were led to believe, we would have to make a big adjustment in January to our spring schedule,” Bernstein-Chargin said.
The fall classes offered to students will not change regardless of any budget changes, she added.
While college staff do not like waiting to find out whether they have overestimated fund availability, they go through it every year. State Assembly and Senate debates routinely keep the state budget from being approved before mid-July although community colleges are required to pass their budgets by the end of the financial year on June 30.
“You’re budgeting in advance of having the budget confirmed,” Bernstein-Chargin said. “We tend to walk this tightrope every year.”
