BILL ANALYSIS �
AB 1199
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1199 (Fong) - As Amended: May 1, 2013
Policy Committee: Higher
EducationVote:10-1
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Board of Governors (BOG) of the
California Community Colleges (CCC) to adopt an enrollment
stabilization funding formula for CCC districts under
accreditation sanction and, as a result, experiencing decreased
student enrollment, provided certain conditions are met by the
district. Specifically, this bill:
1)Requires the BOG to adopt the formula for determining
adjustments to district's fiscal-year revenue levels 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.
c) The district develops an improvement plan certified by
the CCC Chancellor that:
i) Includes a six-month accreditation compliance report
from the district's board of trustees signed by the
district chancellor and passed by the district's board of
trustees.
ii) Details the district's to-date progress and includes
a timetable to complete a full and satisfactory
accreditation response.
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2)Requires the stabilization formula per (1) 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
the district qualifies for this stabilization funding.
b) Revenue reductions in the second and third years after
the district qualifies for the stabilization funding shall
include payments by the district of equal installments in
each of these years to cover 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).
FISCAL EFFECT
Of the two districts current under show cause sanction (see
below), only the City College of San Francisco (CCSF) has a new
funding source that could be applicable to this bill. Last
November, San Francisco approved a parcel tax to raise $16
million per year for CCSF. The district's governing board is
planning to use most of this revenue to increase its operating
reserve and address other deficiencies noted by the accrediting
body.
The CCC Chancellor's Office estimates that, based on current
enrollment estimates, the stabilization formula would result in
an additional allocation within Prop. 98 funds of $5.4 million
to CCSF for 2012-13, which would be repayed by the district over
the following two fiscal years.
It is not clear from the bill what constitutes a new funding
source, nor is it clear whether a district under show cause with
a new local funding available would be eligible for or required
to seek the additional stabilization funding. The bill requires
a district's improvement plan to be certified by the CCC
Chancellor, which implies that a district meeting the qualifying
conditions could decide to seek certification by submitting the
required documents to the Chancellor's Office. The Chancellor's
Office would incur additional staffing costs to undertake the
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certification process, which would require review as to the
adequacy of the improvement plan and the "new" funding source,
in relation to the district's entire financial status.
COMMENTS
1)Purpose . Existing law provides a year of stabilization
funding, during which the district receives at least the same
funding for enrollment as the previous year (even if
enrollment declines) or higher funding (up to an allowable
cap) if enrollment increases. This is because a district
usually does not know that its full-time equivalent student
(FTES) count has declined until it begins its enrollment
counts, which occur at the same time the state is disbursing
funds and after the district has hired faculty and determined
its class schedules. If enrollment declines beyond just one
year, the district's revenues are reduced by the decrease in
its FTES. However, those reductions are restored if
enrollments increase during the subsequent three years,
providing a district with a buffer against fluctuating
enrollments.
AB 1199 requires the BOG to adopt a formula for qualifying
districts, meeting the conditions described above, that would
provide one additional year of stabilization funding for
districts under severe accreditation sanction, and would
require those districts to use new funding sources to repay
the additional year's funding over the subsequent two years.
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 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."
2)Accreditation is required to receive state appropriations and
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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.
Many community colleges have faced accreditation sanctions,
including Show Cause. With the exception of Compton College in
2004, all have retained accreditation. Of the community
colleges, six are on Probation status and two are on Show
Cause status-CCSF and College of the Sequoias.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081