BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1461 (Negrete McLeod) - Public Postsecondary Mandatory Fees.
Amended: April 26, 2012 Policy Vote: Education 8-0
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Jacqueline
Wong-Hernandez
SUSPENSE FILE.
Bill Summary: SB 1461 limits the amount by which the California
State University (CSU) Board of Trustees may increase the
mandatory system-wide fees for resident undergraduate students,
in a given year, and requests the Regents of the University of
California (UC) adhere to the same limit.
Fiscal Impact:
CSU: Significant ongoing cost pressure on state General
Fund. If this bill results in the CSU being unable to raise
student fees to a level sufficient to meet system needs, it
will result in additional cost pressure for the state to
fund the CSU at a higher level.
UC: To the extent that the UC Regents comply with the
request of this bill, the UC system may experience barriers
to raising fees to a level the system might have charged
absent the bill which, in turn, will result in additional
cost pressure for the state to fund the UC at a higher
level.
Background: Existing law confers upon the Trustees of the CSU
the powers, duties, and functions with respect to the
management, administration, and control of the CSU system. (EC �
66066)
There is no current statutory guiding policy on mandatory
system-wide student tuition and fees beyond the current fiscal
condition and the stated needs of the UC and CSU, as negotiated
in the budget deliberations.
Existing law further provides that statutes related to UC (and
most other aspects of the governance and operation of UC) are
applicable only to the extent that the Regents of UC make such
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provisions applicable. (EC � 67400)
Proposed Law: This bill prohibits the CSU Trustees, and requests
the UC Regents to refrain, from increasing the mandatory
system-wide fees charged to resident undergraduate students by
an amount that exceeds the percentage calculated as follows: 1)
The percentage used shall be 2% more than the percentage change
in the California per capita personal income from the prior
fiscal year; and, 2) if the percentage change in the California
per capita personal income is negative, the California per
capita personal income percentage change shall be zero for
purposes of calculating the amount the trustees and the regents
may increase mandatory system-wide fees. The bill provides that
its provisions only apply in an academic year in which funds are
appropriated in the Budget Act for purposes of enrollment
growth.
Related Legislation: SB 960 (Rubio) prohibits campus-based
mandatory fees, other than those for instruction-related
purposes or that are specifically authorized by statute, at the
CSU, from being established without an affirmative vote of
either the student body or a campus fee advisory committee. That
bill is currently on the Suspense File in this Committee.
Staff Comments: This bill will not result in direct state costs,
but will create substantial cost pressure. Funding for the UC
and CSU primarily comes from a combination of state General Fund
monies and student fee revenue. If the state wants to provide
for a lower share of cost for students, it necessarily implies
higher costs for the state. The state's portion subsidizes the
amount paid by all students, whereas a fee increase has the
effect of increasing non-needy students' share of their college
costs, thereby reducing the state's share.
The state's current fiscal condition has resulted in significant
reductions to various state programs, including support for UC
and CSU, since fiscal year 2007-08. In 2009-10, the UC increased
student fees by 25.7%; in 2010-11, by 15%; in 2011-12, by 18.3%.
During those same years, per capita personal income was -6.1%,
2.9%, and 4.6% respectively. If the proposed cap had been in
place during those fiscal years, the result would have been a
fee cap of 2% in 2009-10, 4.9% in 2010-11, and 6.6% in 2011-12;
the allowable increases would have been substantially lower than
the actions taken by the UC absent any limit. In 2009-10, the
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CSU increased student fees by 32.1%; in 2010-11, by 10%; in
2011-12, by 23.5%. As with the UC, these increases were much
higher than the percentage increases that would have been
allowed if the fee cap provisions of this bill had been law and
applied to each of the past 3 years.
This bill provides that its restrictions would only apply "in an
academic year in which funds are appropriated in the annual
Budget Act? for the purposes of enrollment growth". This
provision seems to imply that the provisions of the bill would
not have applied to years when there were cuts to the UC and
CSU, though it is not entirely clear. If that is the case, of
the past three years the bill would only have applied to the UC
in 2010-11, a year in which the State partially restored funding
to the UC. In 2010-11 tuition was increased by 15% to help
mitigate the budget reductions of the previous two years. Under
SB 1461, the UC would have been limited to a 4.9% increase. The
result would have been a $246 million revenue loss in 2010-11.