BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: AB 478
AUTHOR: Hernandez
AMENDED: April 7, 2011
FISCAL COMM: Yes HEARING DATE: June 22, 2011
URGENCY: No CONSULTANT: Daniel Alvarez
SUBJECT : Community colleges: funding.
SUMMARY
This bill eliminates the 2 percent cap on the amount of
unemployment exceeding 5 percent that the California
Community Colleges (CCC) must use for purposes of
calculating the annual request for enrollment growth
funding.
BACKGROUND
Current law (Education Code § 84750.5) requires the CCC
Board of Governors to develop criteria and standards, in
accordance with specified statewide minimum requirements
for the purposes of making the annual budget request for
community colleges to the Governor and the Legislature.
Among other things, the statewide minimum requirements
include requesting funding annually for enrollment growth
based on the following:
a) Weighted average of the adult population-rate
change for ages 19-24 and 25-65, as determined by the
Department of Finance.
b) To the extent the California unemployment rate
exceeds 5 percent, the positive difference is added;
however in no event shall the positive difference
exceed a 2 percent.
c) Unfunded full-time equivalent students (FTES) in
the areas of transfer, vocational education, and basic
skills.
Current law also specifies legislative intent that nothing
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shall be construed as limiting the authority either of the
Governor to propose, or the Legislature to approve,
appropriations for California Community Colleges programs
or purposes.
ANALYSIS
This bill eliminates the 2 percent cap on the amount of
unemployment exceeding 5 percent that the California
Community Colleges (CCC) must use for purposes of
calculating the annual request for enrollment growth
funding.
STAFF COMMENTS
1) Need for the bill . According to the author,
"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 community colleges from even considering
appropriately correlating demand for CCC courses with
the current high rates of unemployment ." This measure
would not require increased funding for student growth
but it will change the nature of the budget
discussions to emphasize the need for more community
college funding during periods of high unemployment.
2) Current unemployment calculation misrepresents
reality. The 2 percent cap ensures that the CCC's can
never report an unemployment rate greater than 7
percent (the 5% threshold plus the 2% cap), limiting
future cost pressures on the state budget. This
artificial suppression of unemployment data comes at
the expense of accurate information. For example, as
of January 2011, unemployment in California is 12.4
percent, which CCC would not be able to accurately
report in its budget request despite its likely impact
on demand for CCC courses and services.
3) Assembly Appropriations Committee . In their analysis
of this measure the Assembly Appropriations Committee
cited potentially significant Proposition 98 cost
pressure to allocate additional funding for enrollment
growth during periods of high unemployment. For
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example, a 10 percent unemployment rate would yield a
request from the CCC's for an additional 3 percent
enrollment growth equal to approximately $175 million
at current funding rates. Actual funding for CCC
enrollment growth is determined through the annual
state budget process.
4) Prior Legislation : AB 385 (Block) of 2009 was
substantially similar to this bill. AB 385 was held
in the Senate Education Committee at the request of
the author.
SUPPORT
California Community Colleges Chancellor's Office
California School Employees Association
Faculty Association of California Community Colleges
(sponsor)
OPPOSITION
None on file.