On June 26, 2023, the Legislature and Governor announced a final budget agreement. The Legislature passed the various budget related bills on Tuesday, June 27 and Thursday, June 29. The Governor signed the budget bill package on July 10, which goes into effect immediately.

The budget agreement includes the following actions related to community colleges:

• Student-Centered Funding Formula (SCFF) – Includes $678 million in ongoing Prop 98 funding for an 8.22% cost-of-living adjustment (COLA) for the SCFF.
• Enrollment Growth – Provides $26.4 million in ongoing Prop 98 funding to support 0.5% enrollment growth.
• Categorical Programs – Dedicates $95.5 million in ongoing Prop 98 funding to provide a COLA for select categorical programs.
• One-Time Program Reductions/Changes – Includes the following reductions/changes to one-time programs funded in the 2022 Budget Act:
  • Deferred Maintenance and Instructional Equipment – Reduces one-time funding provided in the 2022 Budget Act for the Deferred Maintenance and Instructional Equipment program by $494.3 million, leaving $346.4 million for the program.
  • Student Recruitment and Retention – Reduces one-time funding included in the 2022 Budget Act to support student recruitment and retention strategies from $150 million to $94.6 million. Provides $50 million one-time Prop 98 funding to support student recruitment and retention in 2023-24.
  • COVID-19 Learning Recovery Emergency Block Grant – Rejects the Governor’s proposal to reduce the COVID-19 Learning Recovery Block Grant by $345 million, maintaining the $650 million in one-time Prop 98 funding provided in the 2022 Budget Act.
  • One-Time Funding Flexibility – Includes trailer bill language to allow colleges to use the remaining funds from the COVID-19 Learning Recovery Emergency Block Grant, student retention and recruitment funding, and the Deferred Maintenance and Instructional Equipment Block Grant for any of these purposes. The amount available for these activities is about $1.1 billion.
• Full-Time Faculty Audit Findings – Implements recommendations made by the State Auditor to improve community colleges’ use of funding to increase full-time faculty. Specifically, the budget agreement requires each community college district to annually report to the Community College Chancellor’s Office on its progress in increasing the percentage of instruction by full-time faculty and in increasing faculty diversity. Requires the Chancellor’s Office to provide an annual systemwide report to be posted on their website. Also requires the Chancellor’s Office to establish and implement a policy to verify that community college districts are using full-time faculty funding appropriated in the annual budget for the designated purposes. Requires the Legislature and the Board of Governors of the California Community Colleges to be informed of any community college district that fails to comply with these requirements.
• Equal Employment Opportunity Program – Provides $4.3 million in one-time Prop 98 funding to support the Equal Employment Opportunity Program. Requires the Chancellor, on or before January 1, 2024, to create a process to verify each participating community college district’s implementation of strategies to promote faculty diversity.
• Facilities – Approves the Governor’s proposal to support two new capital outlay projects and three continuing projects using bond funds.
• Categorical Flexibility – Rejects the Governor’s proposal to provide community college districts with spending flexibility for certain categorical programs (Student Equity and Achievement Program, Student Financial Aid Administration and Student Mental Health Resources).
• Other Programs – The budget agreement includes the following investments:
  • Workforce Training Grants – Includes an increase of $14 million in one-time Prop 98 funding to support the administration of workforce training grants in collaboration with the California Department of Forestry and Fire Protection.
  • Chief Business Officer Mentorship Program – Provides $275,000 in Prop 98 funding (of that $200,000 is ongoing) to develop a community college chief business officer professional learning program, administered by the Fiscal Crisis Management Assistance Team to improve district leadership and fiscal accountability.
  • LGBTQ+ Pilot Project — Includes an increase of $10 million a year for three years in Prop 98 funding to support the Los Angeles Community College District LGBTQ+ Pilot Project.
  • East Los Angeles College Entrepreneurship and Innovation Center — Provides an increase of $2.5 million in one-time Prop 98 funding for the East Los Angeles College Entrepreneurship and Innovation Center.
  • Nursing Program – Provides $60 million in Prop 98 funding in 2024-25 and each year through 2028-29 to expand nursing programs and Bachelor of Science in nursing partnerships to grow, educate and maintain the next generation of registered nurses through the community college system, subject to future legislation.
  • Student Board Members – Provides students who serve on the Board of Governors $4,000 in financial assistance each semester from the Chancellor’s Office.
  • Online Textbooks – Allows county juvenile halls, in addition to state prisons, to be eligible for online textbook funding.
  • Online Course Recommendations – Provides $500,000 in one-time Prop 98 funding to review outcomes and costs associated with online courses and programs and develop recommendations for the state to ensure an appropriate mix of online and in-person programs and courses, and that online programs and courses are designed to support student success and equitable outcomes.
• Student Housing – The budget agreement rejects the Governor’s proposed funding delay for the California Student Housing Revolving Loan Fund and instead provides a $200 million General Fund in 2023-24 and $300 million annually from the 2024-25 to 2028-29 fiscal years for the purposes of this program. This fund will provide zero-interest loans to qualifying campuses at UC, CSU and CCC for the purposes of constructing affordable student, faculty and staff housing. Of this funding, 75% will be available for university projects, while 25% will be available for community college projects. The budget also includes trailer bill language that would allow a shift in unused funds toward a segment with higher demand. Additionally, the budget eliminates the $1.4 billion allocated for the Higher Education Student Housing Grant Program in the 2022 Budget Act and instead shifts all General Fund support to revenue bonds. The budget includes $78.5 million in ongoing General Funds to support debt service for $545.4 million in bonds for student housing projects in 2023-24 and 2024-25. The budget agreement approves the following community college student housing projects: UC Merced and Merced College, UC Riverside and Riverside College, UC Santa Cruz and Cabrillo College, Cerritos College, College of the Redwoods, College of San Mateo and San Diego City College.