BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 114 (Yee) Hearing Date: 05/26/2011 Amended: 04/04/2011 Consultant: Jacqueline Wong-HernandezPolicy Vote: Education 7-3 _________________________________________________________________ ____ BILL SUMMARY: SB 114 requires California community college (CCC) districts to place part-time faculty on a schedule of comparable salary steps as full-time faculty with similar academic preparation and years of experience; pay part-time faculty in a manner that mirrors the same relationship to the placement of full-time faculty on the schedule, and report the salary on payroll notices and to the State Teachers' Retirement System (STRS) as a percentage of full-time salary. This bill makes legislative findings and declarations regarding the work and compensation of part-time faculty in CCCs. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Salary schedules Likely minor, potentially significant, one-time costs Local STRS reporting Potentially significant one-time costs Local _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED SB 114 finds and declares that: a) Part-time community college faculty have the same qualifications and academic credentials as full-time faculty; b) that they spend the same number of non-classroom hours working as full-time faculty; c) that part-time faculty pay should, and does not, reflect actual workload; d) that STRS credit reporting for part-time faculty is rife with problems which could be resolved by using a full-time equivalent (FTE) percentage-based reporting system; and e) that all part time faculty should receive pay and benefits that are equal to those of tenure-track faculty on a pro rata basis. This bill's extensive findings and declarations strongly suggest a legislative intent to increase CCC part-time faculty compensation. This stated intent creates substantial cost pressure to equalize the salaries and benefits of CCC full-time and part-time faculty (on a pro rata basis), by increasing the compensation and benefits of part-time faculty. Existing law allows CCC districts to locally bargain the rates of pay for their faculty members, and full-time and part-time faculty members are typically compensated at different rates. SB 114 mandates instead that CCC districts "determine the compensation of part time community college faculty using a salary schedule that places part-time faculty on comparable salary steps as full-time faculty with similar academic preparation and years of experience," and that part-time faculty be "placed on a schedule that mirrors the same relationship to placement of full-time faculty on the schedule". SB 114 (Yee) Page 2 This bill requires that CCCs use salary steps and compensation rates for part-time faculty that are comparable to full-time rates (pro-rated), which will likely constitute a state-reimbursable local mandate. The state would be responsible for paying the difference between the existing part-time rates, and the newly mandates salary increases. This bill further requires that part-time faculty be placed in specific points on the salary schedule, based on full-time faculty placement, which will likely translate to an additional increase to the salaries of at least some current part-time faculty members. According to the CCC Chancellor's Office, the statewide cost of increasing part-time faculty rates up to the level of full-time faculty pay would range from $154 million to $173 million annually. Staff notes that this would also increase future STRS benefits paid to those faculty members in retirement, exacerbating the severity of the current unfunded liability in STRS. Additionally, one-time reimbursable mandate costs would be incurred to create new salary schedules, adjust faculty compensation, and train staff to use new salary schedules. SB 114 further requires that CCCs report the salary of part-time faculty on payroll notices and to STRS as a percentage of full-time salary. There would likely be one-time reimbursable mandate costs for one-time workload to calculate credit hours as a percentage of full-time salary for the CCCs that do not currently report the information this way. This provision would likely create some amount of off-setting savings to STRS, because the agency would receive more streamlined and consistent information. Amend per author to remove legislative findings and declarations. Amend per author to permit each Community College District to publish a salary schedule for part-time faculty that presents information similarly to the full time faculty salary schedule, and permits Community College Districts to standardize STRS reporting.