BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SCA 4
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|Author: |Nguyen |
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|Version: |May 28, 2015 Hearing |
| |Date: July 15, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Kathleen Chavira |
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Subject: University of California: tuition and mandatory
systemwide fees: out-of-state students: admission: student
financial assistance
NOTE: This bill has been referred to the Committees on
Education and Elections and Constitutional Amendments. A "do
pass" motion should include referral to the Elections and
Constitutional Amendments Committee.
SUMMARY
This bill proposes to add a new section to Article IX of the
State Constitution that would require, beginning with the
2017-18 academic year, that out-of state undergraduate students
make up no more than 10 percent of the total undergraduate
enrollment systemwide and at each campus of the University of
California (UC), prohibits the UC from providing state-funded
financial assistance to non-resident students, as specified, and
prohibits any increase in tuition or mandatory systemwide fees
for undergraduate students between the 2016-17 and 2020-21
academic years, inclusive.
BACKGROUND
Current law generally requires that a student classified as a
non-resident pay non-resident tuition. Current law authorizes
both the UC and the CSU to establish non-resident student
tuition policies and methodologies to be developed by each
institution's governing body. The annual fee rate is prohibited
from falling below the marginal cost of instruction and the
SCA 4 (Nguyen) Page 2
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rates at comparison institutions, as identified by the
California Postsecondary Education Commission, must be
considered.
(Education Code § 68050-68052)
The California Constitution establishes the UC, a public trust
to be administered by the Regents of the UC and grants the
Regents full powers of organization and government, subject only
to such legislative control as may be necessary to insure
security of its funds, compliance with the terms of its
endowments, statutory requirements around competitive bidding
and contracts, sales of property and the purchase of materials,
goods and services.
(Article IX, § (9)(a) of the California Constitution)
ANALYSIS
This bill proposes to place an amendment to the California
Constitution before the voters that:
1)Beginning in the 2017-18 academic year:
a) Constitutionally prohibits out-of-state
undergraduate students from constituting more than 10
percent of the total incoming undergraduate class.
b) Constitutionally prohibits out-of-state
undergraduate students from exceeding 10 percent of the
total undergraduate enrollment of each campus of the
University of California (UC).
c) For these purposes, defines an "out-of-state
undergraduate" as an undergraduate student whose residence
was outside of California at the time he/she applied for
admission to the UC.
2)Constitutionally prohibits the UC from providing state-funded
financial assistance to any student, who in the absence of
such aid, would be statutorily required to pay tuition or
mandatory fees at higher than California resident rates.
3)Constitutionally prohibits undergraduate tuition and mandatory
systemwide fees from being increased during the 2016-17
through 2020-21 academic years, inclusive.
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STAFF COMMENTS
1)Need for the bill. The author is concerned that in November
2014, the UC Board of Regents conditionally approved five
years of tuition increases and informed lawmakers that without
more funding the system would be forced to cap enrollment of
California residents next year. At the same time, the UC
would still be accepting higher paying out-of-state students.
On March 3, 2015 an announcement was made by Napolitano,
directing all UC campuses to maintain their current level of
enrollment for resident students and to allow some of the
campuses to increase the enrollment of non-resident students.
According to the author, the Regents have increasingly, looked
to non-resident students as a solution to UC budget problems.
As a result, California taxpayers have seen access limited to
these flagship universities for their children.
According to the author, this bill would increase access to
higher education for California taxpayers by making it
possible for more in-state students to attend our universities
and halting increased tuition rates for the next five years,
protecting our students from paying more for their education.
2)Related activity. In May 2015, the UC Board of Regents
approved increases in undergraduate non-resident supplemental
tuition of up to 8 percent per year for the next five years.
Additionally, the recently enacted 2015-16 budget contains
several related provisions. Among other things, it provides
that funds currently being used to provide financial aid to
non-resident students must be available to enable more
resident students to enter the university at all of UC
campuses. It also provides that funds generated by an
increase in non-resident tuition in the 2015-16 academic year
be used specifically to support an increase in the number of
resident students enrolled. It also requires that systemwide
tuition and mandatory fees be capped for the next two academic
years.
Finally, the Budget provides that no later than the 2016-17
academic year, the University is expected to enroll at least
5000 more resident undergraduate students as enrolled in
2014-15.
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3)Net effect? As noted in staff comment #2, the 2015-16 Budget
anticipates the use of resources from non-resident tuition
increases to support the enrollment of resident students. By
capping the proportion of non-resident students that can be
enrolled this bill would limit, potentially even eliminate, a
source of non-general fund revenue that could be used for
accommodating California resident students. As a
constitutional provision, neither the University of California
(UC), nor the Legislature, would have the discretion to modify
this cap. Similarly, the 2015-16 Budget caps UC tuition
increases for the 2015-16, and 2016-17 academic years and at
the same time directs the UC to implement reforms to reduce
the cost structure of the University, and improves access,
quality, and outcomes. This bill would constitutionally
eliminate fee increases for the next five years.
Fee revenue works interchangeably with General Fund support to
fund the core instructional mission of the public segments.
Constitutionally limiting student fee increases, while
well-intentioned, would also reduce the revenue options
available to the UC, and the Legislature, for offsetting
general fund reductions which may be necessary during
challenging fiscal conditions. In the event of severe budget
reductions, the only options remaining could be to reduce
enrollment, limit course offerings, reduce programs and
services, and potentially compromise access and quality.
In combination, the elements of this bill could have the
unintended effect of limiting access for California residents.
The Committee may wish to consider:
a) Is it the desire of this Committee to limit the tools
available to the Legislature for compelling the
constitutionally autonomous UC to direct revenue sources
outside of the general fund for the good of California
resident students?
b) Are there more flexible ways to accomplish the goals of
this bill than constitutional changes?
c) In light of recent budget actions, is this bill
necessary?
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4)Non-resident students. Non-resident students pay roughly
$23,000 per year more than California-resident students.
According to the UC, based on 2014-15 figures, compliance with
the provisions of this bill would require reduction in
non-resident enrollment systemwide by about 8,300 full-time
equivalent students, and a loss of over $100 million in net
revenue. The UC further reports that it uses these funds for
support of programs central to improving graduation rates,
including ensuring adequate course sections are offered for
"bottleneck" courses, improving student advising, restoring
library hours and maintaining graduate student support for
purposes of instructing undergraduates.
5)Current status of out-of-state admissions. The UC reports
that for the 2014-15 academic year, 13 percent of its
undergraduates systemwide were non-residents. The UC also
notes that the average for other comparable public
institutions nationally is 26 percent. The chart below
summarizes the level of enrollment of non-residents at all
University of California campuses for the 2012 and 2013
academic years. According to the UC, non-resident enrollment
has been capped for the upcoming academic year at those
campuses that have seen the largest growth, Berkeley (25
percent), Los Angeles (19 percent), and San Diego (17 percent)
has been directed to cap their enrollment of non-residents at
20 percent.
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6)Financial assistance. This bill applies the prohibition on
financial assistance to students who would statutorily be
required to pay tuition or mandatory fees at higher than
California resident rates. While current law generally
requires that a student classified as a non-resident pay
non-resident tuition it also provides an exemption from the
supplemental non-resident tuition for specified non-residents
including current and former members of the armed forces and
their dependents. As such, the UC would not be prohibited from
providing these non-resident students with financial
assistance.
7)Related and prior legislation
RELATED LEGISLATION
AB 1370 (Medina) prohibits the number of undergraduate
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non-resident students enrolled at any UC campus from exceeding
the number enrolled in the 2015-16 academic year, requires
that beginning the 2018-19 academic year and each academic
year thereafter, that funds, generated from undergraduate
non-resident enrollment be directed to fund increased
enrollment of undergraduate resident students and requires UC
to annually publish a report that includes information about
the amount, method of distribution, and expenditure purposes
of revenues generated by undergraduate non-resident enrollment
at each campus including the number of California resident
undergraduate students admitted. AB 1370 is awaiting hearing
in this committee.
AB 1317 (Salas) also on the Committee's agenda today, requests
the UC Regents refrain from increasing the compensation of any
executive officer when the amount of mandatory systemwide
student fees and tuition of the university has been increased
at any time in the immediately preceding two years.
PRIOR LEGISLATION
SCA 22 (Rubio, 2012) was substantively similar to this bill.
That bill was set for hearing but pulled at the request of the
author and never heard.
SUPPORT
National Diversity Coalition
OPPOSITION
University of California
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