BILL ANALYSIS Ó SENATE COMMITTEE ON EDUCATION Alan Lowenthal, Chair 2011-2012 Regular Session BILL NO: SB 1550 AUTHOR: Wright AMENDED: April11, 2012 FISCAL COMM: Yes HEARING DATE: April 18, 2012 URGENCY: No CONSULTANT:Kathleen Chavira SUBJECT : Community College Extension Courses. SUMMARY This bill requires, until January 1, 2019, the Chancellor's Office of the California Community Colleges to establish a voluntary, pilot program for purposes of selecting up to eight community college campuses from eight different community college districts to establish and maintain an extension program offering career and workforce training courses for credit at fee levels that cover the actual cost, as defined, of maintaining these courses. BACKGROUND Current law authorizes the governing board of any community college districts to establish contract education programs within or outside the state by agreement with any public or private agency, corporation, association, or any other person or body to provide specific educational programs or training to meet the specific needs of these bodies. (Education Code § 78021) Current law establishes the California Community Colleges as a part of public higher education. Current law establishes and differentiates the goals, missions and functions of California's public segments of higher education. (Education Code § 66010) Current law provides that the primary missions of the community colleges are to offer academic and vocational education at the lower division level for both recent high school graduates and those returning to school. Another primary mission is to advance California's economic growth SB 1550 Page 2 and global competitiveness through education, training, and services that contribute to continuous workforce improvement. In addition, current law provides that essential and important functions of the colleges include: basic skills instruction, providing English as a second language, adult noncredit instruction, and providing support services that help students to succeed at the postsecondary level. Community colleges are also authorized to provide community service courses and programs so long as their provision is compatible with an institution's ability to meet its obligations in its primary missions. To the extent funding is provided the colleges are authorized to conduct institutional research concerning student learning and retention as is needed to facilitate their educational missions. (EC § 66010.4) Current law requires the governing board of a local community college district to admit any California resident, (and authorizes them to admit any nonresident) possessing a high school diploma or the equivalent and authorizes the board to admit anyone who is capable of profiting from the instruction offered, as specified. (EC § 76000) Current law requires that community college students be charged a per unit fee and statutorily prescribes the fee level through the annual Budget process. Current law exempts the student enrolled in noncredit courses and in credit contract education courses, as specified, from these fee requirements. Current law also exempts from these requirements CSU and UC students enrolled in CCC remedial classes, as specified, and provides for the waiver of these fees for students who have financial need or meet other specified criteria. (EC §76300) ANALYSIS This bill requires, until January 1, 2019, the Chancellor's Office of the California Community Colleges to establish a voluntary, pilot program for purposes of selecting up to eight applicant community college districts to establish and maintain an extension program offering career and workforce training courses for credit. Pilot Participant Selection 1) Authorizes the governing board of any community SB 1550 Page 3 college district to apply to be selected by the Chancellor's office. 2) Limits participation to eight campuses from eight separate community college districts. 3) Requires the Chancellor, in selecting the campuses, to consider all of the following: a) Geographic, socio-economic, and demographic diversity. b) Labor-Market Demand. c) The district's program and planning capacity. d) Potential support from funding partners in industry, labor, or other private funding sources to reduce cost of attendance for participating students. Requirements to be eligible to participate 4) Authorizes the Chancellor to review pilot programs, monitor compliance with the provisions of the bill, and grant the Chancellor's office the authority to rescind authority to participate in the pilot if the Chancellor determines that a campus or its district is out of compliance with these provisions. 5) Requires a selected campus meet the following criteria in order to be eligible to participate in the pilot program: a) Serve a number of students equal to or beyond its funding cap for the two immediately prior academic years, to be determined as specified. b) Have not received a stability adjustment to state appropriations. c) Meet transfer, basic skills, or career technical education objectives for all courses in the state-funded programs offered for SB 1550 Page 4 credit. d) Prioritize enrollment in the state funded programs by promoting policies that both: i) Prioritize enrollment for fully matriculated students, as defined, and for continuing students who are making satisfactory progress toward a basic skills, transfer or workforce development goal. ii) Do not unfairly or disproportionately shift students eligible for resident tuition or who are eligible for a fee waiver to courses offered under the pilot program e) Prohibits a district from receiving a stability adjustment to apportionment funding. Extension Program Requirements 6) Requires a selected community college district to comply with the following requirements in order to participate: a) Requires districts to minimize the costs of administration of the pilot program to the greatest extent possible. b) Prohibits the pilot program enrollment from being reported for state appropriation but requires that enrollment be open to the public. c) Prohibits a governing board from expending any general fund moneys to establish and maintain these courses, and specifies that these fees do not apply to fees generated in the extension program. d) Prohibits extension courses from being offered at times, nor in locations that supplant or limit offerings of state-supported programs nor in conjunction with courses funded SB 1550 Page 5 with state apportionments. e) Requires each participating campus to ensure that state and federal financial aid is available to eligible students. f) Requires the programs to ensure that financial aid students receive same priority for enrollment as all other students. g) Requires that credit courses offered be developed in accordance with relevant provisions of the Education Code and Title 5 of the California Code of Regulations governing community college credit courses. h) Applies the following statutes relative to faculty and expenditures: i) Requires a goal of 75:25 ratio of full-time to part-time faculty in extension program credit classes. ii) Requires the inclusion of pilot program revenues and expenditures (which conform to the "current expense" of education) in the calculation/determination of the district's compliance with the 50% law governing program revenues and expenditures (50% of current expense of education must be for payment of salaries of classroom instructors). iii) Subjects the extension program to collective bargaining agreements. i) Prohibits supplanting of courses funded with state apportionments and further prohibits a community college district from reducing courses funded with state apportionments which are necessary for students to achieve basic skills, workforce training, or transfer goals, or to expand those courses as part of the pilot program. j) Authorizes a local governing board SB 1550 Page 6 to establish fees that do not exceed the actual cost of maintaining the pilot program and defines actual costs, for this purpose, to include all of the following: i) Cost of instruction. ii) Cost of necessary equipment and supplies, student services and institutional support costs. iii) Administrative costs incurred by the Chancellor's Office for providing oversight of the pilot program. Reporting Requirements 7) Requires each participating district to comply with the following reporting requirements: a) Collect student information, as specified, and conduct an analysis of the program effects on district workload and financial status, and to submit this information to the Chancellor's Office by August 1 annually. b) Submit a schedule of established course fees to the Chancellor by August 1 annually. 8) Requires the Chancellor to forward the data and information submitted to the LAO. 9) Requires the LAO, on or before June 30, 2016, to provide to the Legislature a report evaluating the pilot program established drawing upon campus reports and visits, interviews with faculty, students and administrators, and any other source that LAO deems relevant. 10) Requires the LAO report to include: a) Summary statistics on course offerings, enrollment, financing, and student utilization of financial aid, funding, and completion rates. SB 1550 Page 7 b) A determination of the extent of the pilot program's compliance with statutory requirements and the extent to which it expanded access for students. c) An assessment of the program's effect on the availability of, and enrollment in state-supported courses, with particular attention to the demographic make-up and financial aid status of students enrolled in the state-supported courses. d) Recommendations regarding the extension, expansion or modification of the program and consideration of alternative approaches that could achieve expanded access without increased state funding. 11) Sunsets the bill's provisions on January 1, 2019. STAFF COMMENTS 1) Need for the bill . Recent budget reductions have had a real and detrimental impact on the ability of the CCC to maintain its "open access" mission under the state's Master Plan. CCC enrollment has been constrained by two major factors: (1) reductions in course-section offerings as a result of state budget cuts, and (2) strong demand for CCC services, including by adults seeking retraining and other skills. The CCC system reports that many students, particularly first-time students, have been unable to enroll in the classes they need to progress toward their educational goals. This access problem may become became even more serious given the magnitude of enacted and potential budget reductions. In the 2011-12 budget, the CCC was cut by $400 million. In January 2012, mid-year "trigger" cuts resulted in an additional $102 million reduction. The CCC estimate that property tax and fee revenue shortfalls may result in $149 million less than projected. If the Governor's tax initiative is rejected by voters, the CCC budget will face yet another mid-year reduction of $292 million and $218 SB 1550 Page 8 million in apportionment funding would be deferred. This bill, in an effort to expand access to career technical and workforce development courses, would establish a pilot program to authorize fees sufficient to cover the actual costs of these classes at up to eight community college campuses. It would also establish conditions (consistent with budget actions through which the Legislature has declared its intent that community colleges implement workload reductions in courses and programs outside of those needed by students to achieve their basic skills, workforce training, or transfer goals) which must be met regarding the use of state general fund dollars provided to the community colleges in order to participate in the pilot program. 2) Summary of contents . In summary, this bill: a) Creates a voluntary, six-year, competitive pilot program limited to a maximum of 8 campuses from 8 different districts. b) Requires campuses to meet specified requirements regarding cap, course offering and enrollment priority conditions. c) Establishes a variety of requirements to be met by the extension programs established under the authority granted by the bill. d) Authorizes the Chancellor's Office to monitor compliance with requirements, to rescind participation in the program for non-compliance, and to assess a fee to recover administrative costs for providing oversight. e) Requires independent evaluation and reporting of the program's implementation and effects by the Legislative Analyst's Office. f) Sunsets the pilot program in 2019. 1) Correct a drafting error . This bill establishes conditions to be met by districts in order to be eligible to be selected for participation in the SB 1550 Page 9 extension program and then conditions to be met within the extension program. Priority enrollment policies which must be implemented by a district in order to be eligible for selection are currently contained within provisions outlining requirements for participation in the extension program. Staff recommends the bill be amended to delete lines 5-20 on page 6 and insert this language between lines 33 and 34 on page 4. 2) Under what conditions ? Arguably, the intent of this bill is to give districts that have clear and ongoing demand for their credit courses and programs that cannot be met with limited state support an alternative source of funding to meet that demand. While the bill establishes some conditions to be met by districts to demonstrate that they are maximizing the use of state funding to meet the state's objectives, does it go far enough? a) Has the district restricted the enrollment of students in classes for purposes of personal enrichment under the state funded program? Is it reasonable to authorize the shifting of any student to a higher cost program if the state-funded program continues to enroll students in "activity" courses? Staff recommends the bill be amended to require, as a condition of selection that the applicant district have adopted policies that "Limit the state-supported enrollment of students in activity courses as defined in Title 5 of the California Code of regulations. The applicant shall not claim state apportionment for students who repeat either the same credit or non-credit physical education or visual/performing arts course that is part of the same sequence of courses. This provision does not apply to disabled students taking adaptive activity courses, students participating in intercollegiate athletics, or students with an approved educational plan major in physical education or the performing arts." b) Does the district prioritize the enrollment of students who are eligible for "in-state" SB 1550 Page 10 tuition (California residents, military dependents, AB 540 students) to ensure that California's taxpayers, rather than foreign students, or non-residents are being served in the state-supported program? Staff recommends the bill be amended to require as a condition of selection that the applicant district have adopted policies that prioritize enrollment of students who are eligible for in-state tuition. c) The bill currently requires that an applicant district promote enrollment priority policies that do not unfairly or disproportionately shift students eligible for state financial aid programs from the state-funded program to courses under the pilot program. Shouldn't the district more affirmatively ensure that students supported by state financial aid programs (which are also strained under the current budget) be served primarily via the lower cost state-funded program where possible? Staff recommends this language be strengthened to require that an applicant district promote enrollment priority and student support policies that ensure that students eligible for state financial are not disproportionately shifted from the state-funded program to the pilot program. 3) Smaller pilot, easier administration/oversight . This bill currently authorizes up to 8 campuses be selected for participation in the pilot program. While the bill authorizes the collection of fees sufficient to cover the cost of oversight by the Chancellor, it is unlikely that the Chancellor's Office has sufficient staff/fiscal resources to conduct the level of administrative work involved in establishing, implementing and overseeing a program for eight campuses. Staff recommends the bill be amended to reduce the maximum number of campuses that may participate from 8 to 5. 4) Supplanting . This bill proposes creation of an SB 1550 Page 11 extension program to offer career and workforce development courses. Could districts shift high cost workforce development programs to extension programs while still maintaining and expanding lower cost basic skills or transfer courses in the state funded program without technically "supplanting" existing courses? Could the bill result in a "maintenance-of-effort" in the state funded program while encouraging new or expanded programs for students who pay more in the extension program? Staff recommends the bill be amended to require, as a condition for participation in the program, that "Extension credit courses shall not supplant courses funded with state apportionments. Districts shall not reduce state-funded courses sections needed by students to achieve workforce training goals in order to expand those course sections as part of the extension program." In addition, staff recommends the bill be amended to define "career and workforce development courses" to ensure that courses required to meet transfer or basic skills goals are not shifted to the extension program. 5) Paradigm shift? This bill proposes a small scale pilot program whose elements may signal the initial steps toward a significant departure from the open access mission established for the community colleges by the Master Plan and by state statute. Although the UC and the CSU offer self-support extension programs, these segments serve a defined population whereas the community colleges have traditionally served as California's way of ensuring that affordable access to education is provided for all others who can benefit. Is this the first step toward privatizing educational opportunity at California's community colleges and to linking access to the ability to pay? If so, should the Legislature clarify the means by which this unprecedented shift should occur? Historically, districts have interpreted Education Code section 78021 to authorize the offering of courses at fees sufficient to cover the cost of courses for contract education purposes only. In March 2012 the Santa Monica College Board of Trustees passed an initiative to have a nonprofit foundation offer SB 1550 Page 12 high-demand core classes such as math and English at a higher price during the summer and winter sessions alongside the same state-funded courses. Following student protests and a request from the Chancellor of the California Community Colleges, Santa Monica College postponed its proposed two-tier fee plan to obtain further input from students, faculty and staff on ways to increase access to classes, which have been reduced significantly due to insufficient funds. This bill presents an opportunity to clarify the conditions under which the Legislature would recognize that a district has maximized its ability to meet the Legislature's priorities with state funding and to authorize pursuit of additional fee revenue to meet enrollment demand. Staff recommends the bill be amended to state, "Education Code section 78021 shall not be construed to authorize the implementation of a multi-tiered fee system in the California Community Colleges through the creation of a foundation or other affiliated entity. The California Community Colleges shall not charge a per unit fee for courses it, or an affiliated entity or foundation, offers in excess of that authorized by the Legislature pursuant to Education Code 76300, except as expressly authorized to do so in Education Code section 78130." 6) Prior legislation - AB 515 (Brownley, 2011), heard by this committee on June 29, 2011, would also have established a California Community Colleges Extension Pilot Program. That bill, however, authorized extensive participation by community colleges throughout the state since any community college that certified that it met the requirements of the program would be eligible to participate. Although the bill was heard by this committee, no vote was taken, and a subsequent hearing on the bill was cancelled at the request of the author. SUPPORT Cerritos College OPPOSITION SB 1550 Page 13 Antelope Valley Community College District California Teachers Association Kern Community College District Los Angeles College Faculty Los Angeles Community College District Los Rios Community College District Peralta Community College District San Diego Community College District Yosemite Community College District Faculty Association of California Community Colleges