This June, struggling California community colleges will stop getting yearly cost-of-living increases to their budgets. These increases have kept many districts afloat for the past six years while community colleges adjusted to a new funding method based on district performance rather than enrollment numbers alone.

Most districts are surpassing the system’s goals, while struggling districts have been making cuts to bridge their budget gaps. With yearly cost-of-living increases being eliminated, those struggling districts will need to make even more cuts.  

This year, Cabrillo College in Santa Cruz announced it would cut 5% of its course offerings and pause hiring for unfilled positions as it faces a $5.9 million deficit in the 2025-26 academic year. That deficit is projected to double in three years.

In Oakland, the Peralta Community College District had to close an $11.8 million deficit this year. It has eliminated 68 positions, including financial aid support staff at each of its four colleges. Peralta administrators have also discussed reducing the number of colleges in the four-campus district, possibly by consolidating operations, to decrease costs.

Population decline sparked new funding model

The way that most of California’s community college districts earn their funding changed in 2018. Nine districts in the wealthiest areas of the state, called basic aid districts, continued to receive funding through local property tax revenues only. But for the 63 remaining districts, the new formula split the funding they receive from the state into three buckets – 70% based on enrollment, 20% based on the number of students receiving financial aid and 10% determined by “student success” metrics like the number of those who successfully transfer or receive certificates. 

Previously, the funding model for non-basic aid districts was based solely on enrollment. However, the former chancellor for the state college system, Eloy Ortiz Oakley, predicted that an ongoing decline in state K-12 enrollment signaled a corresponding decline in future community college students. 

“Community college enrollment and K-12 enrollment mirror each other, but lag each other,” he said in a recent interview with CalMatters. Oakley is now the president and CEO of College Futures Foundation.

Oakley said he spent over a year travelling the state and consulting with the system’s administrators and employees to develop a new model that diversified its approach. Today, the funding model uses over 30 measurements to calculate funds based on full-time enrollment, economic demographics and student success outcomes. For example, students who earn transfer degrees net their colleges a larger amount than those who earn trade certificates, although both count for additional funding.