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CommunityCollegeLeagueofCalifornia�OfficeofGovernmentRelations

Community College League of California

May Revision UpdateMay 2018

Today’sDiscussion

• MayRevisionUpdate

• WhatWeKnow

• What’sAtStake

• Q&A

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

StateBudgetUpdate

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

Californiapersonalincomegrewby4.1percentin2017(Up$4.4billion)followinggrowthof3.7percentin2016.

Costoflivingisup- Consumerpricesoverallrose3.6percentinmetropolitanareasofCaliforniaversus2.2percentinthenation.

California’sunemploymentratereachedarecordlowof4.3percent.

MayRevision:HigherrevenueatMayRevise– mostlygoingtoGeneralFund,notProp98Still,Prop98isfundedat$78.4billion(ithasincreasedby$31billioninsixyears)

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

EconomicUpdate

• RequestlegislatorsfortrailerbilllanguagethatfixesharmfulconsequencesofAB195.

• AB195requiresalocalballotstatementtoinclude:TheamountofmoneytoberaisedannuallyTherateofthetaxtobeleviedThedurationofthetaxtobelevied.

TheFix:

ExemptlocalbondsfromtherequirementsofAB195.Lastpushtogetintobudgettrailerbill,whichiseffectiveuponsignature.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

AB195Fix

FundCapitalOutlayProjects

• The2018-19budgetproposedfundingforonlysix of14capitaloutlayprojects.

• Ourcommunitycollegeshave$29.9billioninunmetfacilityneedsidentifiedinthecurrentCapitalOutlayPlan.

HonoringtheWillofVoters

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

• Waitingtoapproveworthyprojectswillincreasethecostsoftheseprojects.

• Approvingthenineunfundedprojectswouldonlyaddabout$7.4millioninannualinterestcostsoverthenext30years.

• Fundingall14projectsisonly20%ofthetotalbondauthoritygrantedbyProp51.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

TheRightEconomicDecision

LeaguePriority:FinancialAidTechnology

Advancement&InnovationUnder-ResourcedFinancialAidOffices:

• Currentfinancialaidprocessingislong,laborintensiveandcantakeuptofourweeks.• Newinitiativesincreaseadministrativeburdenforfinancialaidoffices.

o FAFSACompletiono AB19o Student SuccessIncentiveGrants

Solution:• Provideatechnologymodernizationincreasetofinancialaidoffices• Includesfundingforsoftwarethatstreamlinesfinancialaidverification.• Cutsprocessingtimefromfourweekstothreedays.

Governor’sProposal:Allocate$5millionongoing and$13.5millionone-time toupgradecolleges’financialaidmanagementsystemsformoreefficientprocessing.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

LeaguePriority:OpenEducational

ResourcesAddressingtheHighCostofTextbooks:Allocates$6millionone-timefortheestablishmentofastatewideopeneducationalresources(OER)program)

StronglysupportedbytheLeague

ClarifyingLanguage:• Inconstructingtheopeneducationalresourcesprogram,theChancellor's

OfficeoftheCaliforniaCommunityCollegesshallpartnerwiththeAcademicSenateto(1)identifycoursesthatcurrentlylackOER;(2)providegrantstofacultytocreateOER;(3)acquireatechnologyplatformforeditingandstoringOER;and(4)raiseawarenessamongandprovidetechnicalassistancetofacultythroughouttheCCCsystemaboutadoptingOERfortheircourses.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

KeyBudgetDiscussions

•FundingFormula• OnlineCollege

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

• Netsystemwidegrowthin2015-16was0.4percent.

• Netsystemwide growthin2016-17wasonly0.3percent.

• Twentypercentor1/5ofdistrictsmettheirenrollmenttargetslastyear.

• Manydistrictstoreceivelowerapportionmentsasaresultofnotmeetingenrollmenttargets.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

IsThereAnUrgency?

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

31%

25%

44%

EFFECTSOFTHECURRENTFUNDINGFORMULA

Growth NotFullyRestored Stability

Theneedforamodificationtothefundingformulaisexacerbatedbythefactthatofthe72communitydistricts…• 32aredeclininginenrollment• 18 havenotrecoveredpastenrollmentdeclinesandmanydistrictsareexpectingsignificantbudgetcutsin2018-19duetodecliningenrollments.

Anessential componentofaneffectivefundingformulaisbuildinginstitutionalcapacitywhichrequiresasubstantialinfusionofbasefunding.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

CostoftheStatusQuo

Implementation Timeline

2 Year Program Transition

● No districts would receive less funding than prior fiscal year, plus COLA.

● Metrics analysis period to mitigate unintended negative effects on colleges and the communities they serve.

● Districts allotted time to implement Guided Pathways, AB 705, etc.

5 Year Program Transition Step Down

● Implementation begins in Year 3.

● Success for All metrics would increase by 5% each year until full implementation.

● Equity defined to accurately capture all students served

● Access funded based on a three-year FTES average.

BuildingCapacity forAccess,Equity,andSuccessforAll

Call To Action

A significant and historical funding formula change to the nation’s largest system of higher education serving California’s most underserved and vulnerable populations, must include five essential elements:

ü An appreciable base increase prior to implementation of a new funding formula recognizing the necessity to build institutional capacity to improve student outcomes;

ü Two years of program transition funding at a new, higher base level with the statutory COLA while the formula’s metrics are analyzed and refined to ensure their efficacy in advancing student access, equity, and success;

ü A three-year average for enrollment to enhance predictability and to mitigate volatility;

ü A five-year progressive increase to full Equity & Success funding to allow for a complete cycle of Guided Pathways indicators to be measured; and

ü An oversight council to conduct annual reviews and make recommendations to the Board of Governors to safeguard the long-term integrity of the formula in advancing equity-minded success for all.

MayRevisionFundingFormula

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

60%Base

20%Supplement (Equity)

20%Success

• MeasuresFTESenrollmentbasedonathree-yearaverage.

• Consistentlycountssummersessionenrollmentsinthefiscalyearthatfollowsthesummerterm.

• Providesaruralallocationconsistentwiththecurrentformula.

• PellGrantheadcountenrollment

• Headcountenrollmentofstudents 25yearsandolderwhoreceiveaCollegePromiseGrantfeewaiver(formerlyknown astheBOGFeeWaiver)

• AB540studentspertheCaliforniaDreamGrantapplication

Progress• Transfer-level

mathematicsandEnglishwithinfirstyear

Outcomes• AA/AS degree• TransfertoANY

accredited4-yearinstitution

• ADT• Creditcertificates18

unitsorgreater• 9(CTE)unitsWages• Regionallivingwage

afteroneyear

MayRevisionFundingFormula

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

OtherElements

HoldHarmlessProvision— Establishesatwo-yearholdharmlessapproachDistrictswouldbeheldharmlessto2017-18levelsfortwo-years.Formulametricswouldbeimplementedinyearthreeorfiscalyear2020-21.

Noncredit&CDCP—ExcludesnoncreditandCDCPcoursesfromthenewfundingformulaandfundstheseprogramsatexistingrates.

MayRevisionFundingFormula

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

CEORecommendations

• GuaranteedsecondyearCOLA

• Phase-In• Stability/

Predictability• OversightCouncil

• HigherBase• Two-YearHold

Harmless• 3-YearAverage

COLA• CountAll

Transfer• AB540• Exclude

Noncredit• LowerTech

Assist%

MayRevision

• COLA(one-year)• NoPhase-In• Confirmed

Metrics• Percentages

• SummerShift

AFUNDINGFORMULATHATBUILDSINSTITUTIONALCAPACITY• Thecurrentenrollment-drivenformulafailstocompensate

forthecounter-cyclicalnatureofenrollment.• Anessentialcomponentofaneffectivefundingformulais

buildingtheinstitutionalcapacityofthe72districtsthroughaninfusionofbasefunding.

WeappreciatetheimprovementsintheMayRevisionandsupportthecreationofanewfundingformulathatpromotesquality,budgetstability,access,equity,andsuccess.Werespectfullyurgeconsiderationofthefollowingamendments:Providetwoyearsof“holdharmless”fundingatanew,higherbaselevelwithCOLA;

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

FundingFormulaAmendmentsasofMay18

FundingFormulaAmendmentsasofMay18

• Allocatethe$104millioninone-timefunds,includedintheMayRevision,onanongoingbasis;

• Provideanopportunitytorefinetheproposedformulametricsduringtheholdharmlessperiod;

• Supportfundingpredictabilityandinformedplanningwithathree-yearaverageforenrollment- asincludedintheMayRevision;and

• AnalyzetheimpactsofassigningSummerFTEtoaspecificfiscalyearandproviderecommendationsby2020toensuredistrictshavesufficienttimetoadjusttochangesinattendanceaccountingprocedures.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

ProgressonAmendments

• WeappreciatetheimprovementsintheMayRevision.

• EncouragedtoreportthattheAdministrationindicateditisproposing:o astronginvestmentinbasefunding,o maintainingsummershiftflexibilityfordistricts,ando additionalstabilityprovisionsthatwillprotectcolleges

fromrevenuedeclinesinfutureyears.

• Roughly$400millioninongoingresourcesareatstake

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

ProgressonAmendments

• Givenavailablerevenues,itistherighttimetomovetoanewformula.

• Properlystructuredandadequatelyfunded,anewfundingmodelhasthepotentialtomovetoamoreaccountable,equity-focusedsystemthatalignstoourlongstandingworkaroundsuccess.

• Buildinginstitutionalcapacityrequiresasubstantialinfusionofbasefunding forcolleges.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

ActionsTaken&PossibleScenarios

Senate Assembly ConferenceAction • Failedand$175M

and$104M dividedamongLegislativepriorities

PossibleActions • Formulawithsomeequityreformsandsomefacultymetricsispassed

or• Failand$175M

and$104MdividedamongLegislativepriorities

• Preliminaryplanwith adjustmentsissetinplacetoevaluateformulaoveralongerperiodoftime(1-2years)

or• Failedand$175M

and$104M dividedamongLegislativepriorities

Governor’sOnlineCollege• Maintainsfundingat$20millionongoingand$100millionone-

time• TheMayRevisionmodifiestheGovernor’sJanuaryproposalwith

thefollowing:• Governance. SpecifiesthattheBoardofGovernorswould

serveasthegoverningboardoftheonlinecommunitycollege,andthattheChancellorandBoardofGovernorswouldchoosethepresidentoftheonlinecollege.

• CollectiveBargaining. Thecollegewouldpartnerwithanexistingdistrictforthepurposeofestablishingacollectivebargainingagreement.Theonlinecollege’spresidentwouldretainauthoritytorecommendstaffforhireandtoassignanddirectstaffworkload.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

Governor’sOnlineCollege• StudentSuccess. Theonlinecollegewouldprovidea

comprehensivestatusreportinitsthirdyearofoperationregardingstudentoutcomes.

• Accreditation.Whilethecollegeisseekingaccreditation,theWorkforceDevelopmentBoardwouldcertifythatprogramsofferedbythecollegehavejobmarketvalue.

• Curriculum. Theproposalwouldclarifythattheintentoftheonlinecollegeistocreateuniquecontentandnotduplicatecontent offeredbylocalcolleges.ThefacultyoftheonlinecollegewouldalsoreviewtheOnlineEducationInitiativeprotocolsforonlinecontentandadoptthemasappropriate.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

OnlineEducationPosition

WeappreciatethatseveralofthedesignprinciplesrecommendedbytheLeaguehavebeenincorporated,however,furthermodificationsarenecessarytoensuretheonlineeducationprogramsofour72districtscansuccessfullycompete.

Modificationsinclude:• Integrationofthenewonlinecollegeintotheexistingonline

ecosystemtoensureallcollegessimultaneouslybenefitfromdesignanddeliveryinnovations;

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

OnlineEducationPosition

• Identifyathird-partyentitythatpreventsduplicationofprogramsofferedbyexitingcommunitycolleges;

• Streamliningthestatewideapprovalprocessallowingcommunitycollegedistrictstoofferandreceiveapportionmentforonlinecoursesunderaflexiblecalendar.

• Additionally,weurgecommitmentandcontinuedfinancialsupportforthefullimplementationoftheOnlineEducationInitiativesothatCalifornia’s114collegesmaycontinuebuildingtheironlineinfrastructure.

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

BudgetProcess

üAssemblyBudgetSubcommitteeHearing– May16

üSenateBudgetSubcommittee– May16

üBoardMeeting– May18

üBoardAdvocacyDay– May21

üAssemblyBudgetSubcommitteeVote– May23

üAssemblyandSenateConferenceCommittee(finaldatesTBD)

üLegislaturemustapprove2018-19BudgetActbyJune15

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

JANUARY FEBRUARY MARCH APRIL MAY

LeagueAdvocacyTimeline

Constitutional deadline topassbudget– Legislators donotreceivepayifthebudgetdoesnotpass.

BudgetDeadline

Policycommittee hearingsintensify.Committees takelettersandpublictestimony.

BillHearingsinSecondChamber

Billsareamendedtoaddresscosts.Ifbillsaretoo expensive,theystayon“Suspense”andoftendie.

FiscalCommittees

TheLegislature concludes thenine-monthlegislativesession.Mostbillsthatpasswillgointo effectonJanuary1st.

EndofSession

Leaguebeginsplanningfornextsession.Researchbill ideasandpropose budgetaugmentations.

ResearchonNextYear’sBudget&BillPriorities

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

June August OctoberJuly Sept.

Questions?

CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

LizetteNavaretteVicePresidentlizette@ccleague.org

LarryGalizioPresidentandCEOgalizio@ccleague.org

ThankYou!CommunityCollegeLeagueofCalifornia� OfficeofGovernmentRelations

Follow-UpQuestionsTo: