BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SCA 26
AUTHOR: Denham
INTRODUCED: February 1, 2010
FISCAL COMM: No HEARING DATE: April 14, 2010
URGENCY: No CONSULTANT:Daniel Alvarez
NOTE : This bill has been referred to the Committees on
Education and Elections, Reapportionment and Constitutional
Amendments. A "do pass" motion should include referral to
the Committee on Elections, Reapportionment and
Constitutional Amendments.
SUBJECT : University of California: mandatory systemwide
fees.
KEY POLICY ISSUES
Does establishment of a student fee policy at the University
of California warrant changes to the state's constitution?
What should be the state's guiding principles and objectives
in a student fee policy?
What expectations should there be on the part of the state,
student/families, and the institutions?
Should guiding principles and objectives be flexible enough
to allow for special circumstances and changing fiscal
conditions?
SUMMARY
This constitutional amendment prohibits mandatory systemwide
student fees adopted by the Regents of the University of
California from (1) exceeding a cumulative 10 percent over
the immediately preceding fiscal year, and (2) becoming
effective before 180 days have elapsed from date of adoption
by the Regents.
BACKGROUND
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The California Constitution (Article IX, section 9) states
that the University of California is a public trust, to be
administered by the Regents of the University of California
with full powers of organization and government, subject only
to legislative control as may be necessary to ensure the
security of its funds and compliance with the terms of the
endowments of the university and such competitive bidding
procedures as may be made applicable to the university by
statute for the letting of construction contracts, sales of
real property, and purchasing of materials, goods, and
services.
Current law further provides that statute related to UC (and
most other aspects of the governance and operation of UC) are
applicable only to the extent that the Regents of UC make
such provisions applicable. (Education Code 67400)
At present, there is no statutory guiding policy on student
fees beyond the current fiscal condition and the stated needs
of UC and CSU, as negotiated in the budget deliberations.
ANALYSIS
This constitutional amendment , if approved by two-thirds of
the membership of each house, and the people of the State of
California:
1) Prohibits, the Regents, in any fiscal year from
increasing mandatory systemwide fees charged to students
in an amount exceeding a cumulative 10 percent over fees
charged in the immediately preceding fiscal year.
2) Prohibits any increase in mandatory systemwide fees
charged to students attending the university from
becoming effective before 180 days have elapsed after
the date on which the increase is adopted by the
Regents.
STAFF COMMENTS
1) Need for the bill: According to the author's office,
since 2003, the UC has increased student fees by an
average of 13 percent per year and has not given
students and families' time to plan for these increases.
In addition, student fees adopted in 2009-10 and
proposed for 2010-11 have increased approximately 29
percent for undergraduates and 32 percent for graduate
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students. These large increases have forced many
students to drop out of college.
2) What is California's current fee policy for UC and CSU ?
As previously stated, there is no real guiding policy
beyond the current fiscal condition and the stated needs
of UC and CSU, as negotiated in the budget
deliberations.
Previous statutory higher education student fee policy,
the Maddy-Dills Act, sunset in 1996 and, since then, the
state has had no long-term policy regarding the way in
which mandatory student fees are determined.
The Maddy-Dills Act required fees to be (1) gradual,
moderate and predictable, (2) limited fee increases to
not more than 10 percent a year, and (3) fixed at least
ten months prior to the fall term in which they were to
become effective. The policy also required sufficient
financial aid to offset fee increases. However, even
with this policy, when the state faced serious budget
challenges, the statue was "in-lieued" in order to
provide the institutions some flexibility in dealing
with the lack of state general fund support.
3) Fees have fluctuated in response to the state's fiscal
condition : When faced with an upswing in state
revenues, the state has tended to decrease or freeze
student fees as it did for 2006-07, and when faced with
difficulty in reaching a balanced state budget, the
state tends to allow fee increases. Like the state
budget, families find that when their incomes go up,
fees go down, and when they are faced with stagnant or
decreased income, their fees go up. The tables below
show the changes in UC fees over a period of years:
--------------------------------------------
| UC |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
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|--------------+--------------+--------------|
| 1996-97 | $3,799 | N/A |
|--------------+--------------+--------------|
| 1997-98 | $3,799 | 0.0% |
|--------------+--------------+--------------|
| 1998-99 | $3,609 | -5.0% |
|--------------+--------------+--------------|
| 1999-00 | $3,429 | -5.0% |
|--------------+--------------+--------------|
| 2000-01 | $3,429 | 0.0% |
|--------------+--------------+--------------|
| 2001-02 | $3,429 | 0.0% |
|--------------+--------------+--------------|
| 2002-03 | $3,834 | 11.8% |
|--------------+--------------+--------------|
| 2003-04 | $4,984 | 30.0% |
|--------------+--------------+--------------|
| 2004-05 | $5,684 | 14.0% |
|--------------+--------------+--------------|
| 2005-06 | $6,141 | 8.0% |
|--------------+--------------+--------------|
| 2006-07 | $6,141 | 0.0% |
|--------------+--------------+--------------|
| 2007-08 | $6,636 | 8.1% |
|--------------+--------------+--------------|
| 2008-09 | $7,126 | 7.4% |
|--------------+--------------+--------------|
| 2009-10 | $8,958 | 25.7% |
|--------------+--------------+--------------|
| 2010-11 | $10,302 | 15.0% |
--------------------------------------------
4) Is amending the State Constitution an appropriate
mechanism for change? By putting strict student fee
limitations in the state constitution any changes in
future policy or budgetary conditions could not be
readily dealt with because it would take at a minimum
another statewide vote of the people to change anything.
The timing of this process could take up to 2 years just
to get a measure before the voters, with no guarantee
that changes recommended by the Legislature would be
passed.
For example, if the Legislature found that it needed to
make additional late reductions to the support budget of
the UC, what other mechanisms would be available to the
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institution, particularly in an all-too-familiar late
budget situation? How would this effect the operations
of the institution?
5) Funding sources of the UC . The budget for UC includes
funding from a variety of sources-including the state
general fund, student fee revenue, federal funds, and
other funds. In recent years, the state general fund's
contribution has been around $3 billion annually.
However, the recent state budget crisis has forced the
state to make reductions to various state programs,
including support for UC. A portion of these reductions
will be backfilled with federal stimulus funds and
revenue from student fee increases.
Recent reductions to UC's general fund support have
largely been unallocated. In general, the Regents have
been given discretion to decide how these reductions
should affect employee salaries, benefits, student
enrollment levels, and other expenditures.
6) State General Fund Support is Critical and What is the
State's Commitment? This measure is silent regarding any
required level of state support for the operation of UC.
If overall State budget constraints continue, as
projected by the long-range forecasts of both the
Legislative Analyst and the Department of Finance, there
are limited areas of discretionary state General Fund
supported programs to assist in balancing the overall GF
budget; the choices generally are public safety, higher
education, and health and human service programs.
Limiting student fees increases, no matter how
well-intentioned, will constrain an already depleting
resource base for our higher education segments. If the
premise of this bill is that the state should not
balance its higher education budget on the wallets of
families in hard times - then what should the state's
commitment be to funding public higher education? If the
bottom line is creating a stable affordable process,
what are students/families actually buying? Going to an
institution where courses are not offered or are in
limited supply, or being in instructional facilities
that are not well maintained generally defeats the
purpose of affordability and quality. What is the
appropriate level of funding required from the General
Fund? In recent budget hearings, the Legislative
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Analyst Office considers 2007-08 to be the most recent
"normal" year for the higher education segments.
7) Student financial aid . As previously stated, the state
established the Cal Grant Entitlement Programs to
provide grant assistance for fee payment in UC, CSU and
private institutions in California, to the extent that
students are financially and academically eligible for
such support. The majority of student financial aid is
provided through either federal or state administered
programs (e.g. federal Pell Grants or state Cal Grants).
In addition to this aid, the UC campuses also directly
administer some financial aid programs including
specialized grants, loans and work study, some which are
derived from return-to-aid (typically 25% to 33%) in
order to mitigate the impact of higher fees and other
costs on undergraduate students with financial need.
In 1994, the University of California adopted a
financial aid policy that established the guiding
principles of the University's financial aid programs.
These principles are reflected in a framework for
determining the components of a student's financial aid
package. The framework generally (1) acknowledges the
student's total cost of attendance, (2) requires a
financing partnership between students, the state, and
the university, (3) expects all students to make a
contribution from loans and employment, and (4) allows
for flexibility for students in deciding how to meet
their expected contribution and for campuses in serving
their student bodies.
8 Related legislation. The following bills are also on the
agenda for the committee's consideration today:
SB 917 (Denham) similar to this SCA, but would
apply to the California State University.
SB 969 (Florez) establishes a student fee policy
that places limits on increases in mandatory
systemwide student fees, establishes an upper limit
that student fees could never exceed based on the
overall cost of instruction, and beginning 2011-12
places a prohibition on undergraduate fee increases to
no more than five percent.
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SB 1199 (Liu) requires the governing boards of
the UC and CSU to develop student fee increase
methodologies consistent with specified direction, and
includes many of the same concepts found in SB 969.
SUPPORT
None received.
OPPOSITION
The University of California