BILL ANALYSIS AB 2297 Page 1 Date of Hearing: April 6, 2010 ASSEMBLY COMMITTEE ON HIGHER EDUCATION Marty Block, Chair AB 2297 (Brownley) - As Introduced: February 18, 2010 SUBJECT : Community colleges: nonresident fees. SUMMARY : Would allow the governing board of a California Community College (CCC) to use an alternative method for calculating nonresident fee amounts. Specifically, this bill : 1)Allows a CCC governing board to adopt a nonresident fee that is no greater than the average of the nonresident fees of public community colleges of 12 states that are comparable to California in cost of living. Provides that the determination of comparable states must be based on a composite cost-of-living index as determined by the United States (US) Department of Labor (DOL) or cooperating government agency. 2)Allows a CCC governing board that calculates its nonresident fees based on the statewide average expense of education to set the nonresident fee at the greater of the current or any of the four immediately preceding fiscal year amounts, if the amount calculated for the succeeding fiscal year is less than the amount calculated for the current fiscal year. EXISTING LAW: Requires CCC district governing boards to adopt nonresident student fees, with exceptions. Establishes a number of requirements for CCC districts nonresident student fees amounts, including that nonresident fee increases be gradual, moderate, and predictable and that one of the following calculation methods be used in establishing full-time nonresident fee amounts: 1)The amount expended by the CCC district for the expense of education in the preceding fiscal year increased by the US Consumer Price Index (CPI), divided by the number of full-time equivalent students (FTES) attending the CCC district in the previous year; 2)The statewide expense of education for all CCC districts, increased by the US CPI and divided by the statewide FTES; 3)An amount that does not exceed the fee established by the AB 2297 Page 2 governing board of any contiguous CCC district; or, 4)An amount that does not exceed the amount expended by the CCC district for the expense of education, but not less than the statewide average set forth under paragraph 2) above. FISCAL EFFECT : Unknown COMMENTS : Background : The 1960 Master Plan for Higher Education established California's commitment to an accessible public higher education system. To ensure accessibility to California residents, taxpayers significantly subsidize the cost of higher education. California resident students pay fees to help support the cost but not tuition. Nonresident students at the University of California (UC), California State University (CSU) and CCC pay both fees and tuition. All public colleges and universities in the country have additional charges for out-of-state students as a way to ensure residents do not assume the financial burden of educating students whose presence in the state is not intended to be permanent and who did not pay taxes to support the public higher education systems. A determination as to a California student's residency classification is done at the campus level; however, the general definition of California residency requires at least one year of physical presence in the state, coupled with the capability and intent to make California one's permanent home. Purpose of this bill : The author believes this bill would give CCCs greater authority to charge nonresidents a fee that could be used to increase the quality of education, consistent with the authority granted to UC, CSU and K-12 education. The author notes that state law sets a floor (marginal cost of instruction) for nonresident student tuition and fees at UC and CSU but provides minimal guidance on a tuition ceiling. Additionally, state law allows K-12 school districts to charge for the expense of education, the use of buildings and equipment, repayment of local bonds and interest, state building loans, capital outlay, and transportation. Yet, CCC governing boards must follow one of four specific formulas that ensure that the fee is approximately the pro-rated expense of education. CCC nonresident student fees compared to other states : In 2009-10, the statewide average CCC nonresident fee was $190 per semester unit, with a range from $166 per semester unit at Santa Clarita CCC district, to $226 per semester unit at Redwoods CCC AB 2297 Page 3 district. Additionally, some CCC districts have a capital outlay fee, ranging from $5 per unit to $50 per unit. For 2009-10, there are an estimated total of 45,260 nonresident FTES enrolled in credit courses in the CCC system. The table below is based on data published by the Missouri Economic Research & Information Center and the Washington Higher Education Coordinating Board. The table lists the 2008-09 community college tuition and required fees in the 12 states that are most comparable to California in cost-of-living: ----------------------------------------------------------------- | | | | | State | Cost of Living | Annual Nonresident | | | Rank | Charges | |-----------------------+-----------------+-----------------------| |Oregon | 38 | $7,258 | |-----------------------+-----------------+-----------------------| |Maine | 39 | $5,613 | |-----------------------+-----------------+-----------------------| |New Hampshire | 40 | $13,153 | |-----------------------+-----------------+-----------------------| |Massachusetts | 41 | $10,298 | |-----------------------+-----------------+-----------------------| |Vermont | 42 | $9,168 | |-----------------------+-----------------+-----------------------| |Rhode Island | 43 | $8,216 | |-----------------------+-----------------+-----------------------| |Connecticut | 44 | $8,912 | |-----------------------+-----------------+-----------------------| |New York | 45 | $7,201 | |-----------------------+-----------------+-----------------------| |Maryland | 46 | $7,890 | |-----------------------+-----------------+-----------------------| |New Jersey | 47 | $6,705 | |-----------------------+-----------------+-----------------------| |Alaska | 48 | $13,709 | |-----------------------+-----------------+-----------------------| |Hawaii | 50 |$8,399 | ----------------------------------------------------------------- UC and CSU nonresident fees/tuition : UC and CSU are required to establish methodologies for annually determining the nonresident tuition rate that take into consideration the total nonresident charges imposed by each of their public comparison institutions, as determined by the California Postsecondary Education AB 2297 Page 4 Commission, and the full average cost of instruction of their segment. Under no circumstances is the institution's level of nonresident tuition and fees to fall below the marginal cost of instruction of that segment. Annual undergraduate nonresident student charges in 2009-10, average about $31,389 at UC and $15,987 at CSU. According to 2008-09 data collected by the Washington Higher Education Coordinating Board, national annual nonresident undergraduate charges averaged $19,880 at flagship universities, and $13,928 at all colleges and universities. Recommended amendments : Committee staff worked with the author's staff, the sponsors of this bill, and Legislative Counsel on amendments to revise this bill's language and clean-up this code section to make it more readable. The revision does not alter the general content of this code section or the changes proposed by this bill. Committee staff suggests these amendments be adopted as committee amendments. Prior legislation : AB 947 (Brownley), Chapter 377, Statutes of 2009, authorized a CCC district to charge capital outlay fees to any nonresident student in addition to the nonresident tuition fee. REGISTERED SUPPORT / OPPOSITION : Support Santa Monica College Opposition None on File Analysis Prepared by : Laura Metune / HIGHER ED. / (916) 319-3960