BILL ANALYSIS �
AB 285
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Date of Hearing: April 6, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 285 (Furutani) - As Introduced: February 8, 2011
Policy Committee: Higher
EducationVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires, as is currently provided for K-12 schools,
automatic adjustments in GF apportionments for the California
Community Colleges (CCC) to the extent actual property tax
revenues to the CCC differ from the amount of such revenues
estimated in the annual Budget Act.
FISCAL EFFECT
Unknown GF (Proposition 98) costs, potentially in the ten of
millions, in years when actual CCC property tax revenues are
lower than expected and are automatically "backfilled".
COMMENTS
1)Background . As part of the annual CCC budget proposal, the
state estimates how much local property tax revenue will be
available statewide to the CCC. For individual districts,
state General Fund revenues will be adjusted upward or
downward from the budgeted level to compensate for any surplus
or shortfall in actual tax receipts. However, if the
systemwide level of local property tax revenue turns out to be
lower than budgeted, the shortfall is proportionally spread
across all districts. In some years, the Legislature provides
a augmentation to the CCC to backfill this shortfall. In other
years, no augmentation is provided and the districts must
absorb the shortfall.
2)Purpose . According to the author, the lack of an automatic
adjustment mechanism for CCC funding creates budget
uncertainty that hinders the ability of a CCC district to plan
AB 285
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accordingly to meet the community's educational needs.
Students feel the impact when colleges are faced with a
mid-year shortfall and must cut services. The author believes
AB 285 will give the CCC greater security and certainty of
their expected annual revenue, thus allowing the colleges to
appropriately plan for the expected student services.
3)Prior Legislation . Several bills have been sought to
establish a statutory CCC property tax backfill, but none have
been successful, largely due to fiscal concerns:
a) AB 551 (Furutani) of 2009, was held on Suspense in this
committee, subsequently amended to be a study bill, then
held in Senate Rules.
b) AB 2277 (Eng) of 2008, which would have provided for the
one-time transfer of funds to compensate for un-received
property tax revenues, was held on Suspense in this
committee,.
c) AB 1402 (Blakeslee) of 2005, was held on Suspense in
this committee and subsequently amended to address a
different subject.
d) AB 1417 (Pacheco) of 2004, was held on Suspense in
Senate Appropriations and subsequently amended to require a
study of CCC funding.
e) SB 990 (McPherson) of 2000, was held on Suspense in the
Senate Appropriations.
4)Not the Right Time ? While the idea of providing more budget
certainty to the CCCs and providing statutory equity with K-12
schools regarding property tax shortfalls has merit, this
proposal, at this time, seems problematic in light of the
state's $26.6 billion shortfall. At a time when the pending
budget reduces the CCC's Prop 98 funding by $400 million-an
amount that will likely increase if the revenue portion of the
governor's proposed budget solution is not realized-is it
prudent to lock-in a mechanism that would reduce the
Legislature's flexibility to address the state's ongoing
budget challenges?
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081
AB 285
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