BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 58
AUTHOR: Cannella
INTRODUCED: January 7, 2013
FISCAL COMM: Yes HEARING DATE: May 1, 2013
URGENCY: Yes CONSULTANT:Daniel Alvarez
SUBJECT : Public postsecondary education: funding.
SUMMARY
This bill, an urgency measure , requires that mandatory
systemwide fees or tuition at the California State
University (CSU), California Community Colleges (CCC), and
the University of California (UC) for the period of 2013-14
through 2018-19, not exceed the level of fees or tuition
charged for the 2011-12 fiscal year.
BACKGROUND
The Maddy-Dills Act previously 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
budgetary challenges the statute was "in-lieued" in order
to provide the institutions some flexibility in dealing
with the lack of state General Fund support. 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. Currently, fees
derive from the state's current fiscal condition and the
stated needs of UC, CSU, and CCCs, as negotiated in the
budget deliberations.
Current law further provides that statutes 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. (EC § 67400)
Current law confers upon the Trustees of the CSU the
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powers, duties, and functions with respect to the
management, administration, and control of the CSU system.
(EC § 66066)
ANALYSIS
This bill, an urgency measure , requires that mandatory
systemwide fees or tuition at the California State
University (CSU), California Community Colleges (CCC), and
the University of California (UC) not exceed the level of
fees or tuition charged for the 2011-12 fiscal year. More
specifically, this bill:
1) Declares that Proposition 30, the Schools and Local
Public Safety Protection Act of 2012 enacted in
November 2012, is estimated to raise $50 billion over
a period of seven years.
2) Specifies legislative intent to accomplish both of the
following:
a) Provide General Fund support in amounts that
are at least as large
as amounts provided to the respective segments
for the 2012-13 fiscal year for as long as
Proposition 30 tax rates are in effect.
b) Increase funding to the segments of higher
education to ensure that
mandatory systemwide student fees or tuition are
not required during the period when the
Proposition 30 tax rates are in effect.
3) Requires from fiscal years 2013-14 to 2018-19,
mandatory systemwide fees or tuition for students at
CSU, CCCs, and the UC shall not exceed or increase
beyond the level of mandatory systemwide fees or
tuition charged for the 2011-12 fiscal year.
STAFF COMMENTS
1) Need for the bill . According to the author's office,
?"despite what was said by proponents during the
election, there is no specific language in the text of
Proposition 30 guaranteeing that additional revenue
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will actually go to UC, CSU, or the CCCs campuses.
Though there is $125 million increase in funding for
UC, CSU and CCC systems in the proposed 2013-14
budget, the money is not guaranteed. It can be
eliminated through a majority vote of the
Legislature."
2) Governor's proposed budget . According to the Senate
Committee on Budget and Fiscal Review, "the budget
expects the segments to maintain current tuition fee
levels for the life of a four-year funding plan
advocated by the administration. According to the
administration, no increases in student tuition fees
are necessary because any need is negated by the
year-over-year General Fund increases (generally
around 4 or 5 percent increases over a four-year
period) coupled with savings from expected reforms
from the improved deployment of teaching resources and
from current segmental efforts to increase
efficiencies. The reforms related to improved
deployment teaching resources include: (1) making
available the courses students need and help them
progress through college efficiently; (2) using
technology to deliver quality education to greater
numbers of students in high demand courses (with $37
million in designated funding for UC, CSU, and CCCs);
(3) improving course management and planning; (4)
using faculty more effectively; and (5) increasing the
use of summer sessions."
3) Tuition freeze likely to have negative consequences.
According to the Legislative Analyst Office (LAO) an
extended tuition freeze likely would have negative
long-and near-term consequences. The LAO noted serious
concerns with the Governor's extended tuition freeze
proposal, as it very likely would result in steep
tuition increases during the next economic downturn
and reduced accountability in the near term. Moreover,
tuition levels and students' share of cost currently
are low. After accounting for state and institutional
financial aid, the average share of cost paid by
California students is about 30 percent at UC and CSU
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and 6 percent at CCC.
Historically, fees have fluctuated in response to the
State's fiscal condition. When state revenues are up,
fees have decreased or been frozen, as they were in
2006-07, and when revenue is down, student fees have
increased. 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
charts below illustrate the fluctuation in fees at the
UC, CSU, and community colleges over the last several
years.
--------------------------------------------
| UC |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
|--------------+--------------+--------------|
| 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% |
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|--------------+--------------+--------------|
| 2007-08 | $6,636 | 8.1% |
|--------------+--------------+--------------|
| 2008-09 | $7,126 | 7.4% |
|--------------+--------------+--------------|
| 2009-10 | $8,958 | 25.7% |
|--------------+--------------+--------------|
| 2010-11 | $10,302 | 15.0% |
|--------------+--------------+--------------|
| 2011-12 | $12,192 | 18.3% |
|--------------+--------------+--------------|
| 2012-13 | $12,192 | 0.0% |
--------------------------------------------
--------------------------------------------
| CSU |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
|--------------+--------------+--------------|
| 1997-98 | $1584 | 0.0% |
|--------------+--------------+--------------|
| 1998-99 | $1,506 | -4.9% |
|--------------+--------------+--------------|
| 1999-00 | $1,428 | -5.2 % |
|--------------+--------------+--------------|
| 2000-01 | $1,428 | 0.0% |
|--------------+--------------+--------------|
| 2001-02 | $1,428 | 0.0% |
|--------------+--------------+--------------|
| 2002-03 | $1,500 | 5.0% |
|--------------+--------------+--------------|
| 2003-04 | $2,046 | 36.4% |
|--------------+--------------+--------------|
| 2004-05 | $2,334 | 14.1% |
|--------------+--------------+--------------|
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| 2005-06 | $2,520 | 8.0% |
|--------------+--------------+--------------|
| 2006-07 | $2,520 | 0.0% |
|--------------+--------------+--------------|
| 2007-08 | $2,772 | 10.0% |
|--------------+--------------+--------------|
| 2008-09 | $3,048 | 10.0% |
|--------------+--------------+--------------|
| 2009-10 | $4,026 | 32.1% |
|--------------+--------------+--------------|
| 2010-11 | $4,429 | 10.0% |
|--------------+--------------+--------------|
| 2011-12 | $5,472 | 23.5% |
|--------------+--------------+--------------|
| 2012-13 | $5,472 | 0.0% |
| | | |
--------------------------------------------
---------------------------------------------------
| California Community Colleges |
| Student Fees |
---------------------------------------------------
|------------+------------+------------+------------|
| | | | |
| Year | Fee Amount |Annual FTES | Percent |
| | (per unit) | Amount |change from |
| | | (assuming | prior year |
| | | 30 units / | |
| | | year) | |
|------------+------------+------------+------------|
| 1997-98 | $13 | $390 | 0.0% |
|------------+------------+------------+------------|
| 1998-99 | $12 | $360 | -7.7% |
|------------+------------+------------+------------|
| 1999-00 | $11 | $330 | -8.3% |
|------------+------------+------------+------------|
| 2000-01 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2001-02 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2002-03 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2003-04 | $18 | $540 | 63.6% |
|------------+------------+------------+------------|
| 2004-05 | $26 | $780 | 44.4% |
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|------------+------------+------------+------------|
| 2005-06 | $26 | $780 | 0.0% |
|------------+------------+------------+------------|
| 2006-07 | $26 | $780 | 0.0% |
|------------+------------+------------+------------|
| 2007-08 | $20 | $600 | -23.0% |
|------------+------------+------------+------------|
| 2008-09 | $20 | $600 | 0.0% |
|------------+------------+------------+------------|
| 2009-10 | $26 | $780 | 30.0% |
|------------+------------+------------+------------|
| 2010-11 | $26 | $780 | 0.0% |
|------------+------------+------------+------------|
| 2011-12 | $36 | $1,080 | 38.5% |
|------------+------------+------------+------------|
| 2012-13 | $46 | $1,380 | 27.7% |
| | | | |
---------------------------------------------------
Staff notes that, even with the recent increases, fees
at our public institutions of higher education are at
or below the cost of comparable public institutions.
4) Is this the right solution ? This bill proposes to
"lock-in" resident student tuition or fees at the
2011-12 level at the CSU, UC and CCC. Limiting
student fee increases, no matter how well-intentioned,
reduces the options available to the higher education
segments for offsetting General Fund reductions if
they occur.
While the passage of Proposition 30 provides a modicum
of short-term budgetary relief, the additional
revenues presumed from its passage are estimates. The
tax base of the State is subject to major swings (both
positive and negative) depending on numerous volatile
variables - for example, consumer confidence related
to employment markets, the fluctuations of the
financial markets, or the slowing of housing
construction. There are many factors that may reduce
or impact the "estimate" of revenues. In times of
severe budget reductions, institutions have reduced
enrollment, limited course offerings, or reduced
programs and services. While the provisions of this
bill might make tuition predictable for individual
families it would not ensure the maintenance of a
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quality higher education or even access to it.
5) Similar legislation . AB 67 (Olsen) requires the
California State University (CSU), and requests the
University of California (UC), to freeze undergraduate
tuition and fees through 2016-17. Tuition and fees
could be increased in each fiscal year, however, if
state General Fund support does not increase by at
least: 5% in 2013-14 and 2014-15, and 4% in 2015-16
and 2016-17.
6) Prior legislation . The Legislature has considered
several bills that proposed a number of variations on
a fee policy. Most recently, these have included:
a) SB 1461 (Negrete McLeod, 2011) prohibited
the Trustees of the CSU (and request that the UC
Regents comply with this same prohibition) from
increasing mandatory systemwide fees charged to
resident undergraduate students by 2 percent more
than the percentage change in the California per
capita personal income from the prior year in any
academic year in which funds are appropriated to
the institution for enrollment growth, as
specified, and a cost-of-living adjustment in the
annual Budget Act. The bill was passed by this
committee by a vote of 8-0 but was subsequently
held on suspense in the Senate Appropriations
Committee.
b) SB 969 (Liu, 2010) placed an upper limit on
mandatory systemwide student fees, not to exceed
a fixed percentage of the cost of education as
defined, and prohibited annual mandatory
systemwide fee increases from increasing by more
than the implicit price deflator for state and
local government for goods and services. This
version of SB 969 combined elements of SB 969
(Florez) and SB 1199 (Liu). The bill was passed
by this committee by a vote of 8-0, but was
subsequently held on suspense in the Assembly
Appropriations Committee.
c) SB 969 (Florez, 2010) placed an upper limit
on mandatory systemwide student fees, not to
exceed a fixed percentage of the cost of
education, as defined, prohibited student fees
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from ever increasing beyond the amount a student
paid at the time of enrollment, and prohibited
annual mandatory systemwide fee increases for
each new cohort of undergraduate students at the
UC, CSU, and California Community Colleges from
exceeding five percent of the preceding academic
year.
d) SB 1199 (Liu, 2010) required the governing
boards of the UC and CSU to develop student fee
increase methodologies consistent with specified
direction, and included many of the same concepts
found in SB 969. The bill's provisions were
combined with those of
SB 969 and the hearing was canceled at the
request of the author.
e) SCA 26 (Denham, 2010) amended the State
Constitution and imposed upon the UC a waiting
period of 180 days before mandatory student fees
could take effect, and limited annual fee
increases to no more than a cumulative 10 percent
over the preceding academic year. SCA failed
passage in this committee by a vote of 2-2.
SUPPORT
None on file.
OPPOSITION
None on file.