Governor’s 2026-27 Budget

January 12, 2026

Ann-Marie Gabel, Vice Chancellor, Business Services

To:       Colleagues        

From:  Ann-Marie Gabel – Vice Chancellor, Business Services

Date:   January 12, 2026

• The benefit of a welcome surge in state revenues in 2025 that reflects a boost in the overall revenue outlook.
• The additional near-term costs imposed on California by federal tax legislation as well as unknown future costs to the state’s economy from higher tariffs and restrictive immigration policy.
• The challenge and imperative of balancing the budget not only for the coming fiscal year but for the following year as well.”

With this proposal, the Governor is also planning to shift oversight of the California Department of Education under the State Board of Education in an attempt to streamline governance.

Community College Specifics

The Proposition 98 guarantee for K-14 is $125.5 billion with community colleges receiving $14.1 billion, an increase of $1.1 billion (8.6%).  The Governor included funding to fully repay the $408.4 million in deferrals from 2025-26, along with providing $88.7 million in 2025-26 to cover the costs of the Student Centered Funding Formula (SCFF) calculation and thus avoiding a deficit for community college districts.  There was also a $38.1 million increase to Calbright College to stabilize its operations.  The Governor continued the $60 million investment in the Rebuilding Nursing Infrastructure Grant Program by reallocating a portion of the Strong Workforce Program toward this effort.

The major components of the community colleges’ budget and the impacts on our District are as follows.

Unrestricted General Fund:

• $240.6 million (2.41%) cost-of-living adjustment (COLA). This will provide an estimated $5.6 million increase for our DRAC model.
• $30.9 million (0.5%) for enrollment growth. This funding could provide $884 thousand in additional funds for the DRAC model depending upon total full-time equivalent students (FTES) funded at the State level.
• $55.3 million (1%) for additional enrollment growth in 2025-26.  It is estimated that this could provide $1.8 million for the DRAC model depending upon total FTES funded at the State level.
• $1.6 million (2.41%) cost-of-living adjustment (COLA) for mandated cost block grant program. This will provide an estimated $24 thousand increase for our DRAC model.

Restricted Funds:

In addition to the cost-of-living adjustment for a select few categorical programs, the Governor provided additional ongoing funds to continue efforts which began in 2025-26 related to common data platforms and credit for prior learning; while also providing significant one-time funds for capital projects, deferred maintenance, student support, and expansion of dual enrollment programs as explained below. The estimated District allocations are based upon our current percentage of the statewide share.

Ongoing Resources:        

• $29 million (2.41%) cost of living adjustment (COLA) for Adult Education, EOPS, CARE, DSPS, Apprenticeship, CalWORKS, and Child Care Tax Bailout. This will provide an estimated $296 thousand increase to our programs.
• $5 million to the California Community Colleges Chancellor’s Office to continue the implementation of the systemwide common data platform.  No funds will be provided to the District.
• $2 million to the California Community Colleges Chancellor’s Office for the continued creation and expansion of credit for prior learning policies.  No funds will be provided to the District.

One-Time Resources:

• $120.7 million for deferred maintenance projects. It is estimated that this will provide $2.7 million in funding for our colleges.
• $100 million for a Student Support Block Grant to provide flexible funding to districts.  This is another installment towards the $60 million grant districts received in 2025-26.  Assuming the same allocation methodology, it is estimated our colleges will receive $2.1 million for this program and will have until June 30, 2029, to expend the funds.
• $100 million has been allocated to K-12 districts to increase access to college and career pathways for high school students, including expanding access to dual enrollment and dual credit opportunities.  It is anticipated to see more details related to this partnership with K-12 within the budget trailer bills.
• $36 million for the continued development of a common cloud data platform across the community college system.  These funds are primarily utilized by the Chancellor’s Office and have not been allocated to individual districts.
• $35 million to expand the existing credit for prior learning (CPL) policies.  The funds are meant to provide a fiscal incentive to districts for implementation of CPL; however, as the allocation method is unknown at this time, these funds will not be reflected within our Tentative Budget.
• $14.3 million for a California Healthy Schools Pathway Program to strengthen the schools’ food service workforce through apprenticeship and training programs.  This is a continuation of funding that was provided in 2022 in which competitive grants are available to districts who wish to create the training programs.  Our colleges do not participate in the program.
• $8 million has been reallocated to Basic Needs Center funding away from the Classified Employee Summer Assistance Program for 2026-27 and 2027-28.  The intent is to provide funding so classified professionals can access food pantry services.  Since this is a new program, the allocation method is unknown at this time; therefore, it will not be included within our Tentative Budget.
• $736.9 million to fund 10 new and 29 continuing capital outlay projects utilizing Proposition 2 funding that was approved by the voters in 2024. Unfortunately, neither of our two Final Project Proposals (IVC Building A and SC Fine Arts Complex) were included within this allocation.

The release of the Governor’s budget proposal is the first step in the budget process for the 2026-27 fiscal year.  In the next few days, the Department of Finance will release the budget bill and any related trailer bills, and the Assembly and Senate will begin their budget debates. These debates will continue through the May Revise and until a final budget is adopted in June.

The District will use these proposals to begin our own budgeting process working with the District Resources Allocation Council (DRAC). We will continue to monitor the proposals closely and will budget them once funding is assured.  Our Tentative Budget will be presented to the Board of Trustees for approval at the June 22, 2026, meeting.

For individuals who want more information on the budget, the Governor’s Budget Summary can be found here.  As soon as the California Community Colleges’ Chancellor’s Office posts the document to their website, the Joint Analysis prepared by the California Community Colleges Chancellor’s Office, Association of Chief Business Officials (ACBO), Association of California Community College Administrators (ACCCA), and the Community College League of California (CCLC), can be found at this link by clicking on Budget 2026-2027 under the Resources section. You can also reach me via email at agabel@socccd.edu