BILL ANALYSIS �
AB 2591
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Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2591 (Furutani) - As Amended: April 9, 2012
Policy Committee: Higher
EducationVote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides for automatic adjustments in community
colleges' General Fund apportionments based on shortfalls or
surpluses in total local revenues, i.e. property taxes plus
student fee revenues.
The bill requires the Chancellor of the California Community
Colleges (CCC) to certify to the State Controller by December 31
and May 31 of each fiscal year the estimated total local
revenues for the current fiscal year and the prior year. To the
extent the estimated total local revenues are greater/less than
the amount upon which the General Fund appropriation for the CCC
is based, the General Fund appropriation would be commensurately
reduced/increased at the next general apportionment to the CCC.
FISCAL EFFECT
Unknown GF (Proposition 98) costs, potentially in the tens of
millions of dollars, in years when actual CCC local 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 and
student fee revenue will be available statewide to the CCC.
If the systemwide level of property tax and fee 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
AB 2591
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must absorb the shortfall. In contrast, current law provides
for K-12 school funding to be automatically backfilled
commensurate with any shortfall in actual property tax
revenues.
2)Purpose. The author notes that, in the current fiscal year,
the CCC is experiencing a $149 million shortfall in local
revenues- property tax collections are expected to be $40
million below budget estimates and fee revenues $109 million
below. This shortfall comes on the heels of a $313 million
workload reduction in the 2011-12 Budget Act, and a $102
million midyear trigger cut, which have already heavily
impacted CCCs ability to effectively serve students. According
to the author, the continued lack of an automatic local
revenue adjustment mechanism for the CCC creates additional
budget uncertainty that hinders the ability of districts to
plan accordingly to meet the community's educational needs.
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 235 (Furutani) of 2011, was held on Suspense in this
committee.
b) AB 551 (Furutani) of 2009, was held on Suspense in this
committee, subsequently amended to be a study bill, then
held in Senate Rules.
c) 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,.
d) AB 1402 (Blakeslee) of 2005, was held on Suspense in
this committee and subsequently amended to address a
different subject.
e) AB 1417 (Pacheco) of 2004, was held on Suspense in
Senate Appropriations and subsequently amended to require a
study of CCC funding.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081
AB 2591
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