BILL ANALYSIS                                                                                                                                                                                                    

                           SENATE COMMITTEE ON EDUCATION
                                 Carol Liu, Chair
                             2013-2014 Regular Session

          BILL NO:       SB 195
          AUTHOR:        Liu
          INTRODUCED:    February 7, 2013 
          FISCAL COMM:   Yes            HEARING DATE:  April 17, 2013
          URGENCY:       No             CONSULTANT:Kathleen Chavira

           NOTE  :  This bill has been referred to the Committees on  
          Education and Rules.  A do pass motion should include a  
          referral to the Senate Rules Committee. 
           SUBJECT  :  Postsecondary Education Statewide Goals.

          This bill establishes statewide goals for guiding budget and  
          policy decisions in higher education, requires that the  
          Governor's Office of Planning and Research (OPR) convene a  
          working group, as specified, to develop and recommend specific  
          metrics for measuring progress toward these goals, and  
          requires the OPR to report its recommendations for statewide  
          metrics to the appropriate policy and fiscal committees, and  
          the Governor, by January 31, 2014. 


          Current law establishes the Donahoe Higher Education Act which  
          outlines the laws under which postsecondary educational  
          institutions operate in California. (Education Code Title 3,  
          Division 5, Part 40)

          Within the Donahoe Act, current law establishes findings and  
          declarations based on the periodic review of the Master Plan  
          for Higher Education by the Legislature. Current law declares  
          the intent of the Legislature to outline in statute, clear,  
          concise, statewide goals and outcomes for effective  
          implementation of the Master Plan, attuned to the public  
          interest of the people and State of California, and to expect  
          the system as a whole and the higher education segments to be  
          accountable for attaining those goals. Additionally,  
          consistent with the spirit of the original master plan and  
          subsequent updates, current law declares the intent of the  


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          Legislature that the governing boards be given ample  
          discretion in implementing policies and programs necessary to  
          attain those goals. 
          (Education Code  66003)

           This bill  establishes statewide goals for guiding budget and  
          policy decisions in higher education.  More specifically it:

          1)   Outlines the following three goals for guiding budget and  
               policy decisions in higher education:

                    a)             Improved student success, to include,  
                    but not be limited to, greater participation by  
                    demographic groups that have participated at lower  
                    rates, greater completion by all students and  
                    improved outcomes for graduates.   

                    b)             Better alignment of degrees and  
                    credentials awarded with the state's economic,  
                    workforce and civic needs.

                    c)             Effective and efficient use of  
                    resources in order to increase high-quality  
                    postsecondary educational outcomes and maintain  

          2)   Requires that metrics to measure progress toward these  
               goals be developed with the assistance of a working group  
               to be convened by the Governor's Office of Research and  
               Planning (OPR), and: 

                    a)             Outlines the make-up of the working  
                    group to include postsecondary education segment  
                    representatives, the Department of Finance (DOF),  
                    1-3 members with expertise in state accountability  
                    who are unaffiliated with any of the segments of  
                    higher education, a representative of the  
                    Legislative Analyst Office (LAO) and other relevant  
                    state agency representatives, as identified by the  

                    b)             Requires the working group to develop  
                    at least 6 and no more than 12 measures derived from  
                    publicly available data sources that these measures  


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                    be able to be disaggregated and reported by gender,  
                    race/ethnicity, income, age group, and  
                    full-time/part-time enrollment, where appropriate  
                    and applicable, and that metrics take into account  
                    the distinct missions of each postsecondary segment.

                    c)             Requires the metrics to be used for  
                    the purposes of the annual reporting requirements  
                    for institutions that participate in the Cal Grant  

                    d)             Requires the OPR, in consultation  
                    with DOF and the LAO, to submit the recommended  
                    metrics developed by the working group to the  
                    appropriate legislative policy and budget committees  
                    and the Governor by January 31, 2014.

          3)   Defines the segments of postsecondary education, for  
               purposes of the bill, to include the California Community  
               Colleges, the California State University, the University  
               of California, the independent colleges and universities,  
               and proprietary postsecondary institutions. 

          4)   Declares the Legislature's intent to:

                    a)             Identify, define and formally adopt  
                    appropriate metrics to be used for the purpose of  
                    monitoring progress toward the state goals.

                    b)             Promote progress toward the goals  
                    through budget and policy decisions within higher  

                    c)             Use the reporting system established  
                    per the bill's provisions to help ensure the  
                    effective and efficient use of state resources  
                    available to higher education. 

           STAFF COMMENTS  

           1)   History/Need for the bill  .   There has been a growing  
               trend toward state accountability systems for higher  
               education using different approaches and indicators.  


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               Nearly all states (including Tennessee, Texas, Illinois,  
               Ohio, Florida and Washington) have some form of mandated  
               statewide accountability program for higher education  
               that includes goals, performance measures, and various  
               degrees of performance funding.  

               In the past decade, the Senate has engaged in the  
               following activities relative to higher education  

               a)        In 2002, the Senate commissioned a study of  
                    national trends in higher education accountability.  
                    The resulting report, An Accountability Framework  
                    for California Higher Education: Informing Public  
                    Policy and Improving Outcome, provided the initial  
                    framework for developing an integrated system of  
                    accountability for higher education in California  
                    and was the basis for several legislative efforts to  
                    implement such a framework from 2004 to 2011.

               b)        On January 31, 2007, the Senate Education  
                    Committee held an informational hearing on Higher  
                    Education Accountability. National experts testified  
                    on trends in higher education accountability as well  
                    as California's specific challenges in meeting the  
                    educational and economic needs of its citizenry. 

               c)        On March 20, 2013, the Senate Education  
                    Committee held an informational hearing on Higher  
                    Education Accountability: Statewide Goals and  
                    Metrics. National experts testified about various  
                    state efforts to implement goals and metrics; using  
                    progress outcome, efficiency and effectiveness  
                    metrics to measure performance; potential data  
                    sources, models for implementation and oversight,  
                    and the roles of both Governors and Legislatures in  
                    developing goals and metrics. 

               According to a 2010 Legislative Analyst Office  
               publication, The Master Plan at 50: Greater than the Sum  
               of its Parts, California, which set the gold standard for  
               higher education planning in 1960, now stands alone among  
               sizeable states in its lack of established goals, a  
               statewide plan, and an accountability system for higher  


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          2)   Most recent legislative efforts  .  This bill is very  
               similar to SB 721 (Lowenthal, 2012) which was vetoed by  
               the Governor in September 2012.
               SB 721, like this bill, established statewide goals for  
               guiding budget and policy decisions in higher education,  
               required the Legislative Analyst's Office to convene a  
               working group to develop and recommend specific metrics,  
               and outlined an ongoing reporting process on the progress  
               toward statewide goals.  The Governor's veto message  
               read, in pertinent part:

                    Questions about who should measure, what to measure  
                    and how to measure what is learned in college are  
                    way too important to be delegated to the Legislative  
               Staff notes that this bill assigns the Governor's Office  
               of Planning and Research (OPR) with the lead  
               responsibility for addressing these questions. 

           3)   Governor's Office of Planning and Research  .  This bill  
               assigns the responsibility for leading the efforts of the  
               workgroup it creates to the Governor's Office of Planning  
               and Research. The OPR, created by statute in 1970,  
               provides long range planning and research for the  
               Governor and his Cabinet and constitutes the  
               comprehensive state planning agency (Government Code   
               65040). This bill proposes a function for the OPR which  
               falls outside their current statutory scope.  According  
               to the author, it is the intent that an appropriate  
               entity within the administration be identified to  
               collaboratively engage the Legislature and the segments  
               in the processes outlined in the bill.  

               In order to ensure the Governor has the flexibility to  
               identify an entity he deems appropriate staff recommends  
               the bill be amended to replace OPR with "an appropriate  
               educational administrative body, as determined by the  

           4)   Related budget proposal  . The Governor's budget for  
               2013-14 proposes a multi-year funding plan for the public  
               postsecondary education segments and loosely links annual  
               funding increases with an expectation that the segments  
               improve their performance in the following areas:


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               a)        Increased graduation and completion rates;

               b)        Increased California Community College transfer  
                    students enrolled at the University of California  
                    and the California State University;

               c)        Decreased time-to-degree; and

               d)        Increased credit and basic skills course  

               The proposal includes no link between the funding and  
               enrollment expectations. In addition, according to the  
               LAO's 2013-2014 Analysis of the Higher Education Budget,  
               "by providing the segments with large unallocated  
               increases only vaguely connected to undefined performance  
               expectations, the Governor cedes substantial state  
               responsibilities to the segments and takes key higher  
               education decisions out of the Legislature's control." 

               Consistent with the Governor's objective to improve  
               performance, this bill proposes statewide goals, to be  
               adopted by the Legislature and endorsed by the Governor,  
               and proposes a process whereby the Legislature and the  
               administration can  collaboratively  identify the specific  
               metrics to assess progress towards priorities for higher  

           5)   The Legislature's role  .  As currently drafted the bill  
               creates a collaborative process for developing potential  
               metrics and requires that these recommended metrics be  
               reported to the Legislature by January 31, 2014.  In  
               order to be clear, that the Legislature maintains the  
               authority to review and engage in a collaborative and  
               public discourse regarding the final metrics to be used  
               for assessing progress, staff recommends the bill be  
               amended to declare the Legislature's intent to Identify,  
               define and formally adopt appropriate metrics, based upon  
               the working group's recommendations for the purpose of  
               monitoring progress toward the state goals.

           6)   National models  .  The National Governors Association  
               (NGA), a bipartisan organization of the nation's  
               governors that identifies priority issues and deals  
               collectively with matters of public policy and governance  
               at the state and national levels recently adopted its  


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                Complete to Compete Initiative  under which the NGA  
               proposes to:

               a)        Raise national awareness of the need to  
                    increase college completion and productivity.

               b)        Create a set of common higher education  
                    completion and productivity measures for governors  
                    to use to monitor state progress.

               c)        Develop a series of best practices and a list  
                    of policy actions governors can take to achieve  
                    increased college completion.

               d)        Provide grants to states to design policies and  
                    programs that increase college completion and  
                    improve higher education productivity.  

               The committee may want to consider whether the bill  
               should be amended to require the task force to consider  
               and the recommended metrics to reflect the completion,  
               progress, and productivity measures developed by the  
               National Governors Association (NGA).

           7)   Consistent with recent Legislative Analyst Office (LAO)  
               recommendations  .    
               a)        In a 2010 publication, The Master Plan at 50:  
                    Greater Than the Sum of Its Parts-Coordinating  
                    Higher Education in California, the LAO recommended,  
                    among other things, that the Legislature work with  
                    the administration and others to adopt a clear  
                    public agenda for higher education, with specific  
                    and focused statewide goals that could serve as the  
                    framework for an accountability system designed to  
                    align higher education performance with the state's  

               b)        In a 2012 LAO report, Improving Higher  
                    Education Oversight, in response to budget  
                    supplemental report language requested by the  
                    Legislature as a result of the Governor's  
                    elimination of funding for the California  


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                    Postsecondary Education Commission (CPEC), the LAO  
                    noted the need to protect the public interest, as  
                    insufficient oversight could allow state priorities  
                    to be subordinated to those of the institutions and  
                    other interests. The LAO cited, as its foremost  
                    recommendation, that the Legislature articulate the  
                    state's postsecondary education needs through the  
                    setting of specific goals or identification of key  
                    areas or outcomes of interest to the state.  The  
                    report also recommended that the Legislature  
                    delegate technical decisions about specific measures  
                    and reporting protocols to a technical working group  
                    with representatives from the administration,  
                    legislative staff, the segments, and independent  
                    researchers with experience in higher education  
                    performance measurements.   
               The provisions of this bill are consistent with these  
           8)   Related Master Plan review findings  .  Reviews of the  
               Master Plan have been conducted by the Legislature (and  
               occasionally by blue-ribbon commissions) about once a  
               decade since the 1970s. Most recently, ACR 65 (Ruskin,  
               Resolution Chapter 106, Statutes of 2009) created a joint  
               committee to review the Master Plan for Higher Education.  
               The Committee held several informational hearings and  
               convened working groups to identify potential legislative  
               solutions to issues raised in these hearings. As  
               reflected in ACR 184 (Ruskin, Chapter 163, Statutes of  
               2010) the review resulted in the following related  
               a)        There is no articulated, comprehensive  
                    statement of goals for California's system of higher  

               b)        The Master Plan articulates values but not a  
                    set of public policy goals based upon the outcomes  
                    required to meet the needs of our state and our  

               c)        The lack of goals makes it difficult to develop  
                    sound systems of criteria for advancement or clear  
                    systems of accountability. 


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               d)        The establishment of statewide goals for  
                    California higher education attuned to the public  
                    interest of the people and State of California will  
                    enable increased accountability across the entire  
                    system and within segments. 
            9)   Prior legislation  . This bill reflects the most recent  
               evolution of several legislative efforts to highlight the  
               need for and develop an integrated system of  
               accountability for higher education in California.  In  
               addition to SB 721 (see staff comment #2), these efforts  
               include the following: 

               AB 1901 (Ruskin, Chapter 201, Statutes of 2010) codified  
               the findings and principles that emerged from the 2010  
               Review of the Master Plan for Higher Education and  
               declared the Legislature's intent to statutorily outline  
               clear, concise, statewide goals and outcomes for  
               effective implementation of the Master Plan for Higher  
               Education and the expectation of the higher education  
               system as a whole to be accountable for attaining those  
               AB 2 (Portantino, 2011) and AB 218 (Portantino, 2009),  
               essentially identical bills, required that the state  
               establish an accountability framework to biennially  
               assess and report on the collective progress of the  
               state's system of postsecondary education in meeting  
               specified educational and economic goals.  Both bills  
               were heard and passed by this committee and were  
               subsequently held under submission in the Senate  
               Appropriations Committee. 

               SB 325 (Scott), also nearly identical to AB 2 and AB 218,  
               was passed by the Legislature and vetoed by the Governor  
               in 2008. The Governor's veto message read:

                    While I respect the author's intent to establish a  
                    statewide system of accountability for postsecondary  
                    education and a framework to assess the collective  
                    contribution of California's institutions of higher  
                    education toward meeting statewide economic and  
                    educational goals, this bill falls short in  
                    providing any framework for incentives or  
                    consequences that would modify behavior to meet any  
                    policy objectives.  I believe our public education  


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                    systems should be held accountable for achieving  
                    results, including our higher education segments,  
                    and would consider a measure in the future that  
                    provides adequate mechanisms that will effectuate  
                    tangible gains in student outcomes and operational  
               SB 1331 (Alpert) passed by the Legislature and vetoed by  
               the Governor in 2004, would have established a California  
               Postsecondary Education Accountability (CPSEA) structure  
               to provide an annual assessment of how the state is  
               meeting identified statewide public policy goals in  
               higher education.  The Governor's veto message read in  
               pertinent part: 

                    While I favor accountability for all levels of  
                    education, this bill mainly establishes only a  
                    reporting structure for four broad policy goals  
                    rather than providing for outcomes, such as  
                    performance based measures, historically associated  
                    with accountability systems.  


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