BILL ANALYSIS
AB 385
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Date of Hearing: March 31, 2009
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Anthony Portantino, Chair
AB 385 (Block) - As Introduced: February 23, 2009
SUBJECT : Community colleges: funding.
SUMMARY : Eliminates the 2% cap on the amount of unemployment
exceeding 5% that the California Community Colleges (CCC) must
use for purposes of calculating its annual state funding request
for growth.
EXISTING LAW requires CCC Board of Governors to annually request
system-level funding from the Administration and the
Legislature, using the following formula to calculate its annual
system growth:
1)Weighted average of the adult population-rate change, ages
19-24 and 25-65.
2)The unemployment increase when unemployment exceeds 5%, not to
exceed a 2% positive difference.
3)Unfunded full-time equivalent students (FTES) in the areas of
transfer, vocational education, and basic skills.
FISCAL EFFECT : Unknown
COMMENTS : Background : The provisions this bill seeks to
change were enacted in SB 361 (Scott), Chapter 631, Statutes of
2005. SB 361 replaced CCC's program-based funding with a new
allocation mechanism that generally provides a single rate per
FTES for all CCC districts. The provisions that this bill would
change were a very small part of SB 361.
Purpose of this bill : Unemployment and CCC enrollment have a
strong positive correlation. While fiscal constraints may
preclude the Legislature and Administration from funding growth
up to the level of demand, current law prevents the
Administration and Budget Committees from even considering
appropriately correlating demand for CCC courses with the
current high rates of unemployment. The author believes CCC
should be able to include actual unemployment rates in its
annual budget request to provide a more accurate representation
AB 385
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of CCC enrollment growth needs.
Why the 2% limitation ? The 2% cap ensures that CCC can never
report an unemployment rate greater than 7% (the 5% threshold
plus the 2% cap), limiting future cost pressures on the state
budget. However, that limitation comes at the expense of
accurate information. For example, unemployment was 10.1% in
January 2009, which CCC would not be able to accurately report
in its budget request despite its likely affect on demand for
CCC services.
Impact on the state budget : The Administration and the
Legislature are not required to include CCC's budget request in
their proposals. It is one of many funding requests from state
entities that can be accepted or rejected, depending upon the
state's fiscal condition.
CCC enrollment trends : CCC enrollment reached an all-time high
in 2007-08, due in large part to declining job opportunities,
and has been averaging about 4% per year for the past few years;
however, some CCC districts are experiencing significantly
higher rates of growth and anticipate increased demand for CCC
services as a result of growing unemployment.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers
Faculty Association of the California Community Colleges
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960