BILL ANALYSIS
SB 969
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 969 (Liu) - As Amended: June 28, 2010
Policy Committee: Higher
EducationVote:6-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, effective July 1, 2011, establishes various policies
regarding mandatory systemwide undergraduate resident student
fees at the California State University (CSU) and the University
of California (UC). Specifically, this bill:
1)Declares legislative intent that student fees should not
exceed the percentage of the "average total cost of
education," as defined, that students paid at UC and at CSU in
the first semester of the 2010-11 academic year.
2)Stipulates that, in academic years where the budget act has
provided UC and CSU with resources to fund cost of living
adjustments and enrollment growth, fees increases shall not
exceed the percentage increase in the state's per capita
personal income.
3)Stipulates that any increase in fees adopted by UC or CSU
after July 1, 2011, shall not become effective before six
months after the date of adoption, unless the budget is not
enacted by September 30, whereby fee increases shall not
become effective before 90 days after the date of adoption.
4)Requires the UC Regents and CSU Trustees to adopt a rational
and transparent methodology for adjusting fees, requires the
methodologies to be developed in consultation with student
representatives, requires the methodologies to be adopted in
open public meetings, and provides that annual budgets of UC
and CSU shall be drafted on the basis that fees will change in
accordance with the methodologies and shall specify the
purposes for which any revenues derived from an increase in
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fees will be used.
5)Requires the Regents and Trustees, beginning with the 2011-12
academic year, to annually report to the Legislative Analyst's
Office (LAO) estimates of the total cost of education,
categorized specifically by per-student undergraduate and
graduate education costs.
6)Requires the LAO, beginning with the 2012-13 academic year, to
report annually to the Legislature on compliance with the
policies required in this bill, any findings and
recommendations, and an assessment of the information on cost
of education as provided by UC and CSU.
7)Establishes that the provisions of this bill only apply to UC
to the extent that the UC Regents adopt a resolution making
these provisions applicable and requests that the UC Regents
adopt policies consistent with those outlined in this bill.
FISCAL EFFECT
To the extent that the bill would limit fee increases to less
than an amount necessary, when combined with General Fund
appropriations and other resources, for UC and/or CSU to cover
their operating costs, including annual fixed cost increases,
the bill could subsequently result in significant General Fund
cost pressure. Alternatively, UC/CSU could address any revenue
shortfall by reducing costs through such means as reducing
enrollment, courses sections, and/or staff positions and
compensation. Additional General Fund cost pressure could result
from the required sixth month lag for imposing approved fee
increases.
COMMENTS
1)Background and Purpose . The Maddy-Dills Act, which sunset in
1996, (a) required student fees to be gradual, moderate and
predictable, (2) limited fee increases to not more than 10% a
year, and (3) fixed fees at least 10 months prior to the fall
term in which they were to become effective. The policy also
required sufficient financial aid to offset fee increases.
When the state faced serious budgetary challenges, however,
this statute was "in-lieued" and fees, particularly in the
early 1990s, increased by more than 10% in some years.
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The ongoing, difficult budget situation has led to sharp
growth in student fees at both UC and CSU. Fees at CSU rose
10% in both the 2007-08 and 2008-09 and an additional 32.1
percent in 2009-10. At UC, the fees increased by 8.1 percent
in 2007-08, 7.4 percent in 2008-09, and by 25.7 percent for
2009-10. The trend has been that the fees increase
dramatically when the state faces difficult budget times and
grow slowly, if at all, during relatively good years for the
state's general fund. This means that families face higher
costs of education at the same time they are more likely to
face financial struggles at home and face more moderate costs
during times of relatively strong employment and income
growth.
While the Cal Grant program, federal aid, and institutional
support are available to help provide access to higher
education for families meeting specified income eligibility
criteria, the lack of a clear fee policy presents challenges
for many students and their families. This bill attempts
seeks to address that challenge by outlining a long-term,
predictable fee policy for UC and CSU.
2)Opposition . Both UC and CSU are opposed to the bill,
principally because the fee limitations are not coupled with
any long-term commitment of adequate state General Fund
support to the universities, particularly in light past
General Fund budget cuts and the state's ongoing structural
budget deficit. At the time of this analysis, however, the
segments were seeking resolution with the author.
3)Prior Legislation . In 2006, AB 1072 (Liu), a bill establishing
student fee policies at UC and CSU, was held on Suspense in
Senate Appropriations.
In 2004, a similar bill (AB 2710, Liu) was vetoed, with the
governor arguing that the bill was inconsistent with the terms
of his Higher Education Compact.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081