The SCFF rates initially calculated for the 2018-19 year showed a reduction of funding for Cuesta College relative to what we would have expected under the previous formula. The SCFF promises transitional relief  or “hold harmless” from the formula by providing minimum funding for districts no less than the value of 2017-18 revenue as compounded by cost-of-living adjustments.  Under current law, the hold harmless minimum lasts for four years, such that the district would be entirely subject to the SCFF formula as of the 2022-23 fiscal year. Due to funding outcomes that exceeded state resources in the SCFF’s first year of implementation, the Chancellor’s Office “constrained” funding for winners under the SCFF to increases of 8.13% and committed to revising the funding rates this year to fit within state revenues.

The update from the Chancellor’s Office brings some good news: The revised SCFF rates show Cuesta in much better standing than in the prior year. In the 2018-19 calculation, the difference between our hold harmless revenue and the SCFF calculation was about $1.4 million.  The revised 2019-20 rates show that the gap has narrowed to $288,000.  This suggests that while funding remains a challenge, we are not likely facing a drop-off in revenues as dramatic as initially feared.  Improvements in our standing owe primarily to increased rates for success metrics in which the college excels, such as the number associate degrees for transfer.  Additionally, our FTES has shown healthy growth this year. Through an intentional collective effort across the college, the increased FTES raises the formula’s base allocation by $2M from a year ago.  Great work!

Unfortunately, this good news was accompanied by some troubling information.  Statewide reporting of property taxes and enrollment fees are a combined $250M behind estimates assumed in the state budget.  Due to this shortfall, the Chancellor’s Office is deficiting or reducing district funding to align with the state’s available resources.  For Cuesta, that means the $52,042,585 in hold harmless funding we had initially been allocated is currently being reduced to $50,261,484 – a deficit of 3.4%.

While this deficit may not be final – it is not unusual for property tax figures to improve in subsequent reporting periods – clearly, we need to proceed with caution, as there is no guarantee that the deficit will improve or disappear. Today, Cabinet met to begin planning next steps to address the funding deficit. We will provide further updates to the campus in the near future.

Thank you for your work to maximize our allocation under SCFF, truly a job very well done!

In service,

Dan Troy
Assistant Superintendent/Vice President, Administrative Services
 
Jill Stearns, Ph.D.
Superintendent/President