California's community colleges have always been at the mercy of political battles over the state budget, but education officials say 2003 could become the most perilous in the system's history.
Pinched already by $161 million in midyear cuts ordered by lawmakers this spring, community colleges still stand to lose hundreds of millions more as lawmakers grapple with solutions to a $38 billion shortfall.

Student fees -- which have been $11 per unit for several years -- will rise to at least $18 per unit. College officials say they are prepared to offer fewer courses and lay off employees in order to survive leaner times.

Despite those austere prospects once a budget is passed, it's actually the absence of a state spending plan that poses the biggest threat to the 108 campuses that serve nearly 3 million students.

State Controller Steve Westly warned last week that he won't send monthly payments -- $200 million systemwide -- to the colleges until Gov. Gray Davis signs a budget. Westly said a California Supreme Court ruling in May forces him to withhold the cash.

Some payments to K-12 schools, as well as the University of California and California State University, will also be held up, but only community colleges will be cut off completely.

College officials are preparing to draw on their cash reserves or take out short-term loans to meet critical operating expenses such as paying employees, vendors and utilities.

"The situation has dramatically changed this year," said Robert Turnage, vice chancellor for fiscal policy for the California Community Colleges. "Even community college districts who can get through July and August with borrowing are eating up money in interest costs that is desperately needed for educational purposes."

In previous years when the state budget was late, state finance officials continued to send monthly payments -- called apportionments -- to community colleges. They treated the funding as an ongoing appropriation that didn't require legislative action every year.

"It was always just automatic," Turnage said.

But May's state Supreme Court ruling in a lawsuit filed by the Howard Jarvis Taxpayers' Association dictates that state law doesn't allow finance officials to treat those payments as continuous; they must be approved by lawmakers annually in the budget bill.

The court decision doesn't treat UC and CSU so harshly.

Although they would be denied money to pay vendors and other nonpayroll expenses, the four-year public universities are considered state agencies under the constitution. That allows Westly to cut payroll checks for those college employees, said Walter Barnes, chief deputy controller.

But community colleges -- which are governed by locally elected district boards -- are treated as separate entities from the state even though the Legislature has near-total control of their finances.

The state constitution also prevents Westly from borrowing money to make those payments during the budget impasse, Barnes said.

That means community colleges must find another way to pay employees and keep the lights on if lawmakers don't break their deadlock soon.

July's apportionment is set to go out at the end of the month, but legislators have already blown the July 1 deadline to pass a budget.

Local educators are bracing for the worst.

Los Rios Community College District Chancellor Brice Harris said the three campuses he oversees -- Sacramento City, American River and Cosumnes River colleges -- will be able to weather a few months of missed payments by drawing on reserves.

"When your revenue stops, it's traumatic," he said. "But we will be open for classes in the fall and we will be able to meet our payroll."

Still, Harris worries about surviving a protracted standoff: "It's the cumulative impact that is most frightening if this thing drags on through August and into September."