BILL ANALYSIS �
AB 1199
Page 1
Date of Hearing: April 23, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 1199 (Fong) - As Amended: April 16, 2013
SUBJECT : Community colleges: funding.
SUMMARY : Requires the Board of Governors (BOG) of the
California Community Colleges (CCC) to adopt a stabilization
formula for CCC districts under accreditation sanction with
decreased student enrollments. Specifically, this bill :
1)Requires the CCC BOG to adopt a stabilization formula for
calculating a qualifying CCC district's revenue level for a
qualifying fiscal year that provides for revenue adjustments
if all of the following conditions are met:
a) The district or campus of the district is subject to a
probation or a "show cause" accreditation sanction;
b) The district has identified a new funding source
sufficient for the full payment of any fund liability in
equal installments over the next two years; and,
c) The district develops an improvement plan certified by
the CCC Chancellor that complies with all of the following:
i) Includes a six-month accreditation compliance report
from the district's board of trustees that is signed by
the district chancellor and passed by the district's
board of trustees and,
ii) The accreditation compliance report details the
progress the district has made prior to the date of the
report and includes a timetable for the completion of a
full and satisfactory accreditation response.
2)Requires the stabilization formula adopted pursuant to (1)
above to provide the following adjustments in district
revenues for a qualifying district experiencing decreases in
full-time equivalent students (FTES):
a) Decreases in FTES shall result in revenue reductions
beginning in the year following the initial year in which
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the district qualifies for this stabilization funding at
the district's marginal funding per FTES and,
b) Revenue reductions in the second and third years after
the district qualifies for this stabilization funding shall
include payments by the district of equal installments in
each of these years that covers the difference between the
stabilization funding the district would have received
pursuant to existing law and what the district did receive
pursuant to (2)(a) above.
3)Declares this an urgency statute.
EXISTING LAW :
1)Requires the BOG to develop criteria and standards, in
accordance with specified statewide minimum requirements, for
the purposes of making the annual budget request for the CCC
to the Governor and the Legislature and allocating state
general apportionment revenues, among other things, a
requirement that the calculations of each district's revenue
level for each fiscal year be based on specified criteria with
revenue adjustments being made for increases or decreases in
FTES for specified purposes. (Education Code � 84750.5 et
seq.)
2)Requires revenue reductions as a result of decreased FTES to
begin in the year following the initial year of decrease at
the district's marginal funding per FTES, and authorizes
restoration of those funds if FTES increases in the subsequent
three years. [EC � 84750.5 (d)(6)(B) and (C)]
FISCAL EFFECT : Unknown
COMMENTS : Need for this bill . According to the author,
"Colleges receiving severe accreditation sanction often suffer
immediate reduction of their enrollment. This leads to a
potential funding loss, putting pressure on the college's
ability to make adjustments and recover its full accreditation.
For example, the City College of San Francisco (CCSF) is
experiencing the direct effects of severe sanctions. CCSF has
seen their enrollment drop dramatically with the threat of
losing their accreditation. This action compounds the already
declining enrollment due to a lack of classes offered as a
direct result of state budget cuts from previous years. This
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bill will provide a stabilization formula over a three-year
period in order to keep courses open for students and ensure a
high quality education by retaining faculty."
Stabilization funding . Existing law provides a year of
"stabilization" funding, during which the district receives the
same funding as the previous year. This is because a district
usually does not know that its FTES has declined until it begins
its enrollment counts, which occur at the same time the state is
dispersing funds and after the district has hired faculty and
determined its class schedules. If enrollment declines beyond
one year, the district's revenues are reduced by the decrease in
FTES. However, those reductions are restored if enrollments
increase during the subsequent three years, providing a
district's with a buffer against fluctuating enrollments.
What would this bill do ? This bill would require the BOG to
adopt a formula for qualifying districts that would provide an
additional year of stabilization funding for districts under
severe accreditation sanction and require those districts to use
new funding sources to repay the funding over the subsequent two
years. Eligible districts must meet the following criteria:
1)Be on probation or "show cause" accreditation status;
2)Identified a new funding source sufficient for the full
payment of any fund liability in equal installments over the
next two years; and
3)Issued an accreditation compliance report, detailing the
progress the district has made prior to the date of the report
and includes a timetable for the completion of a full and
satisfactory accreditation response, certified by the CCC
Chancellor.
Accreditation . Accreditation is a voluntary system of
self-regulation developed to evaluate overall educational
quality and institutional effectiveness. CCCs are accredited by
the Accrediting Commission of Community and Junior Colleges
(ACCJC), which is part of the Western Association of Colleges
and Universities. Accreditation is required to receive state
appropriations and to be eligible for federal and state
financial aid programs. There are three levels of sanction:
Warning, Probation, and Show Cause. Follow up reports and
accreditation visits are required to retain full accreditation.
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Over the years, many colleges have faced accreditation
sanctions, including Show Cause. With the exception of
one-Compton College in 2004-all have retained accreditation. In
fact, College of the Redwoods and Cuesta College sufficiently
addressed their identified deficiencies and were removed from
Show Cause in January. Of the 112 CCCs, six are on Probation
status and two are on Show Cause status-CCSF and College of the
Sequoias.
CCSF . Last July, ACCJC identified numerous deficiencies at CCSF
and moved the district directly to the most severe level of
sanction-"Show Cause." ACCJC identified numerous deficiencies
covering a range of district operations. The most substantive
findings focus on failures in the areas of fiscal planning,
fiscal integrity, governance and administration, as well as
failure to completely address eight recommendations from a 2006
ACCJC evaluation team. The CCSF Board of Trustees has taken
numerous actions and approved plans to address the identified
deficiencies; however, it has been a contentious process with
much opposition from local stakeholders. Even with an urgency
clause, this measure is unlikely to go into effect before June
15, 2013, when ACCJC decides CCSF's accreditation status.
Issues to consider .
1)Legislation is unnecessary. Districts do not need state
authority to use local funds for the purposes of this bill.
Last November, San Francisco approved a parcel tax to raise
$16 million per year for CCSF. While local stakeholders asked
the board to use these funds to buffer the college's wage
reductions and layoffs, the CCSF Board of Trustees elected to
use most of the funds to increase its reserve-one of the
deficiencies noted by ACCJC.
2)Local authority. Should locally elected boards be required to
spend local revenues to repay stabilization funding when they
may choose to use the funds to address other issues, such as
accreditation deficiencies? Perhaps this bill should allow a
district to request the stabilization formula authorized under
these provisions rather than mandating it?
3)Recourse for failure to repay? It is conceivable that a
district under Show Cause could lose accreditation and cease
to operate. How would the state recoup the funding?
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4)Technical issues.
a) Qualifying districts must identify a new funding source
sufficient to address any "fund liability." Fund liability
is not defined, nor does the bill specify whom the district
is repaying.
b) Qualifying districts must submit an accreditation
compliance report that is certified by the CCC Chancellor.
It is unclear if this is the report required by ACCJC.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers
California Teachers Association
Faculty Association of California Community Colleges
Service Employees International Union, California
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960