Chancellor Serrano preparing District leadership

Zak S. Cowan, Editor in Chief
March 28, 2012
Filed under News

After years of preparation, the budget has come full fold, and Chancellor Sandra Serrano, along with the rest of the Kern Community College District leadership, is calling on Bakersfield College to prioritize so that minimal impact is had upon the students.

Serrano has called upon the colleges of the district to assess their own situation and focus on their “core mission.”

“They have not been given a percentage, per se, in terms of reductions, [but] they’ve been asked to really focus on priorities,” Serrano said.

The district is using a recent recommendation by the Legislative Analyst’s Office to establish some numbers of what could be cut.

Chief financial officer Tom Burke is in the position of deciding what numbers to base the district’s assessment on.

“[The LAO] did analysis of the governor’s proposed revenue streams, and his proposed budget, and they’ve determined that those were overstated by probably over $6.5 billion,” Burke said. “And so we now updated our long-term projections and incorporated the effect on us with that additional loss.

“Essentially we would have to find that level of reductions within our operations, which is about 15 to 19 percent over the next two years.”

Serrano categorizes all sections into three specific areas from most important to least.

Currently, there are meetings taking place on every KCCD campus to figure out what sections go into these categories.

“The colleges are meeting with their stakeholders and developing plans for what they are defining as core mission based on the needs of their service area,” Serrano said.

“The colleagues are being asked to look at all of the information to establish some priorities both in terms of our core general education, our core programs, our areas for majors and registration priority.”

Serrano said that the “secondary areas” of sections are supposed to be self-supporting, and that is also something that is being assessed on each KCCD campus.

Interim BC president Robert Jensen, according to Serrano, “was brought in to provide an assessment of what we’re seeing as what must be done within the next 18-25 months.”

Serrano said that the district has prepared accordingly through the past five years for the imminent problems that the decisions in Sacramento would bring.

“As a district, we have anticipated an on-going shortfall of revenue, and, as a result of that, we made a strategic decision to build up reserves,” Serrano said.

“We’re in a good position to weather the storm. It is certainly our hope that we’ll be able to serve as many students as possible, that we’ll be able to really provide a clear pathway for students to come in and transfer or move into the workforce, and that we really can come together and get this done.”

Burke said that the reserves are a big reason why KCCD can take the time to assess the economic situation.

“[The reserves] are going to allow us to go into a two-year process where we can take some sizeable hits to our revenue,” he said.

“But instead of reacting in a kneejerk way, we can take the time to plan out the changes appropriately and in the most efficient and effective manner and to try to minimize the reactions while at the same time trying to maximize the number of students that we can serve.”

Burke said that a lot of districts in the state are not in the position to take the time to assess the situation, and could make brash decisions.

“They’re going to have to make changes in a very short period of time, and what happens operationally when you have to do that in very quick order is you get a lot of unintended consequences downstream,” he said.

“The leadership of this district, the chancellor, the board, the college presidents and their management, have really done an outstanding job to help build that reserve, recognizing the magnitude of the economic downturn and the length it was going to be.”

Burke is staying attentive with the situation in Sacramento and said that the most recent news is, “that the projected revenues for February didn’t meet expectations.”

Burke said that most recent development affirms the projections of the LAO’s report.

“We expect another update after taxes in April,” he said. “Then, we’ll have a better idea in terms of revenue to the state, which is why we wait for a May revise to make some final determinations to budget.”

Gov. Jerry Brown’s tax initiative, if passed in November by California voters, will help ease the strain on community colleges, according to Burke.

The initiative will increase the state income tax enforced on those with annual earnings over $250,000 for the next five years, and raise the state sales tax by 5 cents.

Burke said that the reason California’s economic situation has gotten to this point is that lawmakers in Sacramento have deferred dealing with the problem and thrown “gimmicks” at the problem.

“Those things have run out, and that’s why it’s coming to critical mass at this point,” he said.

“There is a structural imbalance in California’s budget that has been perpetuated for longer than a decade where the legislature has had expenditure levels exceeding its revenue levels and has actually incorporated what should have been short-term revenue and treated them as on-going revenues,” he said.

Burke said that most of California’s revenue “used to come from sales tax, which is an ongoing, very predictable stream,” instead of capital gains which is extremely variable.

“It’s flipped now,” he said. “The bulk of California’s revenues are coming from capital gains, and now you have a revenue stream that has a higher degree of uncertainty because now it’s relying primarily on a stream of revenue that’s very uncertain. It essentially goes the way of Wall Street.”

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