The May Revision protects California’s educational priorities by fully funding Proposition 98 and the Governor's higher education compacts.

Major Changes Included in the May Revision

UC and CSU

• $3.6 million (General Fund) for CSU to support an additional 340 full-time equivalent undergraduate nursing students in the budget year.
• One-time workload increase of $2 million in Proposition 99 funds for UC to provide additional money for tobacco-related research, reflecting fund balances available from prior years.
• Trailer bill language to specify the state’s intent to reinstate the employer share of future contributions to the UC retirement plan. This reflects actuarial calculations that indicate an impending shortfall within two years for the first time since the early 1990’s.

California Community Colleges
Current Year
The May Revision proposes a $115 million current-year increase in General Fund and Proposition 98-related funding for the California Community Colleges. These adjustments will be addressed through budget trailer bill legislation, and include:

• $50 million for career technical education equipment and associated facility reconfigurations. These funds will help ensure student access to state-of-the-art equipment necessary for developing relevant career technical skills needed in the workplace of today and tomorrow.
• $50 million for grants to colleges for equipment and other one-time uses for nursing programs in order to assist the colleges' enrollment expansion efforts in meeting the demands of the statewide nursing shortage.
• The May Revision also reflects increases in estimated property tax revenue of $15.1 million and $1.8 million in oil and mineral revenue over the January estimate that drives additional reversions of current year funds in those amounts.

Budget Year
The May Revision includes $9 million increase over the Governor’s Budget. This includes an increase of $5.6 million in ongoing Proposition 98 General Fund. Major ongoing Proposition 98 General Fund policy adjustments include:

• Increases of $23.6 million for apportionments and $1.6 million for selected categorical programs to reflect an increase in the COLA factor from 4.04 percent to 4.53 percent.
• A base reduction of $80 million in apportionments to reflect excess current year and prior year growth funding that will revert based on the most recent enrollment information available from the Chancellor’s Office. Notwithstanding this adjustment, when coupled with the 2-percent growth funding provided in the Governor’s Budget, apportionment funding is sufficient to enable the system to increase full-time equivalent instructional workload by at least 3 percent over estimated current year actual workload levels.
• An increase of $10 million to the Matriculation schedule, providing colleges with additional resources to assist students’ progress towards their educational goals. This amount is coupled with modifications in the Administration’s Community College Student Success initiative to more closely align with the community college system’s fall basic skills proposal.
• An increase of $1.9 million for matching grants to assist colleges with ongoing costs for establishing redundancy for the high-speed network. Redundant circuits will provide greater internet reliability during peak usage time, and reduce the incidence of lost connectivity (pending).

The May Revision also proposes $52.7 million in one-time Proposition 98 General Fund increases from the Proposition 98 Reversion Account for the following purposes:

• $47.5 million for deferred maintenance, instructional equipment, and hazardous substance abatement, pursuant to existing match requirements. These funds will augment ongoing funding to assist colleges in core operational needs beneficial to student learning.
• $2.7 million for matching grants for one-time technology costs for establishing redundancy to ensure the delivery of high-speed internet service to all colleges.
• $2.5 million for textbook assistance for students meeting fee waiver eligibility requirements who do not receive textbook assistance under the Cooperative Agencies Resources for Education program.

California Student Aid Commission
Current Year

• The Governor’s May Revision estimates a workload savings of $23 million for current-year Cal Grant Program awards, reflecting lower-than-anticipated transfer entitlement awards and shifts of students to lower cost institutions in the high school entitlement program.
• Workload savings of $1.3 million is estimated for current-year payments for the Assumption Program of Loans for Education (APLE).

Budget Year
The May Revision proposes a net General Fund decrease of $20 million over the level proposed in the 2007-08 Governors’ Budget:

• Workload savings of $42.8 million associated with revised estimates for Cal Grant Program awards that will be issued in 2007-08 based on trends noted for the current year.
• The May Revision includes a workload increase of $2.5 million to fund revised estimates of payments for the Assumption Program of Loans for Education (APLE) program.
• An increase of $20.3 million to shift the cost of the Commission’s state operations and financial aid awareness (CalSOAP) to the General Fund in recognition of the proposed sale of EdFund, the Commission’s auxiliary loan guarantee agency.

Items Largely Unchanged from the Governor’s January 2007 Budget Proposal

Historic Investment in Higher Education

• $19.8 billion in total funding for all major segments of Higher Education ($14.1 billion General Fund and Proposition 98) for all major segments of Higher Education (excluding infrastructure and stem cell research). This increase will support over 35,000 new students at California’s UC, CSU, and CCC systems.

Budget Year Funding for UC, CSU and CCC

• $5.5 billion ($3.3 billion General Fund) for UC.
• $4.4 billion ($3 billion General Fund) for CSU.
• $8.6 billion ($6.6 billion from General Fund and Proposition 98 sources) for CCC.

Investing in Groundbreaking Research Initiatives
The Budget includes $95 million for four major projects to conduct research in the key areas of clean energy technology, biotechnology, and nanotechnology. These funds have the potential to leverage private and federal funding in excess of $1 billion.

• $30 million in lease revenue bonds to the Helios Project run by the University of California's Lawrence Berkeley National Laboratory to create sustainable, carbon-neutral sources of energy, including the next generation of super-efficient solar energy technology that will help reduce greenhouse gases and our oil dependency.
• $40 million in lease revenue bonds for the University of California UC Berkeley to implement the $500 million grant prize for BP's Energy Biosciences Institute grant. UC won the grant over world-wide competition from leading research institutes. This grant will build and operate an Energy Biosciences Institute that would focus on converting biomass materials into fuels, converting fossil fuels to energy with less environmental damage and maximizing oil extraction from existing wells in environmentally sensitive ways.
• $19.8 million to the California Institutes for Science and Innovation, four multidisciplinary research Institutes of the University of California that work in partnership with 275 private companies.
• $5 million for the Petascale Supercomputer project to help the University of California win the bid to become the site for the most powerful computer in the world, a new $200 million Petascale computer facility funded by the National Science Foundation.

Addressing California’s Teacher Shortage

• $2.7 million, a $2 million increase, for the CSU to support the third year of the Science and Math Teacher Initiative. This funding will enable the CSU to establish three regional science and math teacher recruitment centers and continue to expand its campus programs in order to double the number of science and math teachers trained annually.
• When combined with the $1.1 million that is continued in the UC budget, this initiative proposes a total of $3.8 million for 2007-08.

Helping California’s Students Succeed

• $1 million in one-time current year funds for the California Partnership for Achieving Student Success Program (CalPASS), a project that helps ensure successful student outcomes.
• $930.3 million ($891.6 million General Fund) in local assistance funding, an increase of $64.4 million General Fund above the revised 2006-07 budget.