BILL ANALYSIS
AB 385
Page 1
ASSEMBLY THIRD READING
AB 385 (Block)
As Introduced February 23, 2009
Majority vote
HIGHER EDUCATION 9-0 APPROPRIATIONS 13-4
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|Ayes:|Portantino, Conway, |Ayes:|De Leon, Ammiano, Charles |
| |Block, Cook, Fong, | |Calderon, Davis, Fuentes, |
| |Galgiani, Huber, Ma, | |Hall, John A. Perez, Price, |
| |Ruskin | |Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+----------------------------|
| | |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller |
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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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, potential significant Proposition 98 cost pressure to
allocate additional funding for enrollment growth during periods
of high unemployment. For example, a 10% unemployment rate
would yield a request from CCC for an additional 3% enrollment
growth-equal to about $185 million at current funding rates.
Actual funding for CCC enrollment growth is determined through
the annual state budget process.
COMMENTS : 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 correlating demand for CCC courses with
the current high rates of unemployment by limiting to 2% the
amount of unemployment growth that the CCC Board of Governors
can use to calculate its projected growth rate for state
budgetary purposes.
The 2% cap ensures that CCC can never report an unemployment
AB 385
Page 2
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.
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.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960 FN:
0001123