BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 721 (Lowenthal)
Hearing Date: 01/17/2012 Amended: 01/04/2012
Consultant: Jacqueline Wong-HernandezPolicy Vote: 8-0
_________________________________________________________________
____
BILL SUMMARY: SB 721 establishes statewide goals for guiding
budget and policy decisions in higher education, and requires
that the Legislative Analyst's Office (LAO) convene a working
group, as specified, to develop and recommend specific metrics
for measuring progress toward these goals. This bill declares
the intent of the Legislature to adopt those goals and metrics
recommended by the LAO working group. It requires the LAO,
beginning in 2014 and as part of the annual budget process, to
annually report on and present an assessment of progress toward
the statewide goals and recommendations for Legislative action.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2012-13 2013-14 2014-15 Fund
LAO working group ----------- Minor and
absorbable ----------- General
Metrics ------- Potential cost pressure
to the extent the General
metrics
change funding priorities-------
_________________________________________________________________
____
STAFF COMMENTS: This bill may meet the criteria for referral to
the Suspense File.
This bill outlines the following three goals for guiding budget
and policy decisions in higher education: a) Improved student
success, to include, but not be limited to, greater
participation by demographic groups that have participated at
lower rates, greater completion by all students and improved
outcomes for graduates; b) Better alignment of degrees and
credentials awarded with the state's workforce and civic needs;
and, c) Increased efficiency so desired postsecondary education
SB 721 (Lowenthal)
Page 1
outcomes can be achieved within a given resource level while
maintaining high quality.
In order to progress toward those goals, this bill requires that
the LAO convene a working group, as specified, to develop
metrics for measuring progress toward the goals. It specifically
requires the working group to develop 6-12 measures derived from
publicly available data sources. This bill further requires the
LAO, in consultation with the Department of Finance, to submit a
report on the recommended metrics to be collected and reported
to legislative policy and budget committees and the Governor by
January 31, 2013.
The LAO has indicated that convening the working group
described, and creating the metrics required by this bill, could
be completed within existing resources and staff. Participation
in the meetings by representatives of each of the segments will
require some staff time, but is likely minor and absorbable by
existing staff. The process of creating the metrics is unlikely
to result in new costs to the state.
This bill declares the Legislature's intent to identify, define
and formally adopt appropriate metrics for measuring success,
based upon the LAO recommendations, and to "promote progress
toward the goals through budget and policy decisions within
higher education." The intention of this bill appears to be to
use the metrics, in part, to guide funding decisions for higher
education. The Legislature could presumably tie funding levels
or program funding priorities to performance, based on these
metrics.
While the bill specifies that it intends to "ensure the
effective and efficient use of whatever funding is available to
postsecondary education", rather than specifically secure
additional funding, the decisions reached by the metrics could
result in funding shifts. To the extent that the metrics
encourage funding to be directed to certain areas of "success",
they will likely create cost pressure to provide additional
funding to expand programming and focus on the new priorities.
It is possible, however, that other areas of higher education
could be reduced in proportion to offset the cost of any
expansions. To the extent that funding decisions are made based
upon the new metrics, this bill will have a fiscal impact on the
state.
SB 721 (Lowenthal)
Page 2
This bill requires the LAO to annually and publicly report
statewide performance on each of the measures adopted by the
Legislature, as part of the budget process. The actual reporting
is consistent with the role of the LAO, and can be completed
within existing resources. The outcomes reported, their
subsequent recommendations, and the budget implications are
unknown. Any cost pressure will come from the substance of the
reports.