BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1550 (Wright) - Community Colleges: Extension Course Pilot
Program.
Amended: April 30, 2012 Policy Vote: Education 8-0
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Jacqueline
Wong-Hernandez
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 1550 requires the California Community Colleges
Chancellor's Office to establish a voluntary pilot program
involving up to 5 community college districts (CCDs) for the
purposes of authorizing a CCD to establish and maintain an
extension program offering career and workforce training credit
courses at fee levels that cover the actual cost of maintaining
those courses. This bill requires the Legislative Analyst's
Office (LAO) to report to the Legislature on this pilot program
by June 30, 2016.
Fiscal Impact:
Pilot program: The Chancellor's Office estimates
administrative expenses of $206,000 - $313,000 to administer
the pilot program. A portion of those expenses would be
incurred up front, before the pilot program begins. Those
costs would only be reimbursed to the extent that there is
participation, and it is not clear if they would be
reimbursed in the same fiscal year in which they are
incurred.
LAO Report: Minor costs, absorbable within existing LAO
staffing resources.
Background: Existing law requires the governing board of a CCD
to admit any California resident possessing a high school
diploma or the equivalent and authorizes the board to admit
anyone who is capable of profiting from the instruction offered,
as specified. (EC � 76000)
Existing law also requires that California community college
(CCC) students be charged a per unit fee, and statutorily sets
the fee level through the annual Budget process. Students
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enrolled in noncredit courses and in credit contract education
courses, as specified, are exempted from these fee requirements.
Statute also exempts from these requirements CSU and UC students
enrolled in CCC remedial classes, as specified, and provides for
the waiver of these fees for students who have financial need or
meet other specified criteria. (EC �76300)
Recent budget reductions have challenged the ability of the CCC
to provide open access to students. CCC enrollment has been
constrained by both budget cuts and increased enrollment demand.
In the 2011-12 Budget, the CCC appropriation was reduced by $400
million. In January 2012, mid-year reductions resulted in an
additional $102 million cut. The CCC estimate that property tax
and fee revenue shortfalls may result in $149 million less than
projected, and further compound the current access issues.
In the absence of available CCC career and workforce training
credit courses, increasing numbers of Californians are opting to
pursue these types of courses in proprietary postsecondary
institutions. These institutions cost much more to attend than
CCCs, and students typically pay more than the proportional full
cost for a CCC to operate similar courses.
Proposed Law: This bill requires the Chancellor's Office to
establish a voluntary pilot program for up to 5 CCDs for
purposes of authorizing a CCD to establish and maintain an
extension program offering career and workforce training credit
courses. This bill specifies selection considerations and
requirements for participation in the pilot program. A
participating CCD would be authorized to establish fees not to
exceed the actual cost, as defined, of maintaining the
established courses, and required to collect specified
information about the pilot. This bill requires the LAO to
report to the Legislature on this pilot program by June 30,
2016.
Staff Comments: This bill requires the Chancellor's Office to
establish a pilot program. Program participation would be
voluntary for the CCDs, but establishing the program (including
a selection and oversight process) would be mandatory for the
Chancellor's Office. The stability of the funding mechanism is
unclear because the Chancellor's Office will incur expenses to
establish the program, whether or not there are participating
CCDs; yet, the bill also provides that participating CCDs will
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bear the cost of the program, and specifically prohibits General
Fund use to run the program.
The Chancellor's Office's primary costs would be to hire
additional staff to establish the pilot. The Chancellor's Office
projects that it would require a Specialist position ($115,000
for salary and benefits), a .5 System Software Specialist
($46,000), and a .5 FTE Fiscal Specialist ($45,000 salary and
benefits). It may also require, depending on the scope of the
workload, a Program Assistant ($105,000 for salary and
benefits). The total estimated Chancellor's Office
administrative cost is $206,000 - $313,000, depending upon
whether or not a part-time or full-time Program Assistant is
ultimately needed. The Chancellor's Office is in the midst of
undertaking the extensive reforms recommended by the Student
Success Task Force, within its existing resources and staff. The
new workload created by this bill will result in the need for
new positions, and the structure of the pilot program will
dictate the level of staffing needed.
The personnel needs would likely have to be filled before the
CCDs are selected to participate, though the bill specifies that
fees charged to students by the CCDs must pay the administrative
costs to the Chancellor's Office. If the costs were divided
among 5 CCDs, it would cost about $41,000 - $63,000 per CCD to
participate. If it were 2 CCDs, the cost would jump to $103,000
- $156,500 for each participating district. It is not clear how
many CCDs would participate, and how that participation could be
affected by a potential share-of-cost fluctuation.
This bill also specifies that participating CCDs shall both
recover their program costs "from all revenue sources,
including, but not limited to, public and private sources, or
any combination thereof" and that they "shall not expend General
Fund moneys to establish and maintain a pilot program". This
bill presents some ambiguity regarding
the allowed use of General Fund money for its provisions; in
part, because General Fund money is often allocated to student
financial aid programs (which are available to fully
matriculated CCC students targeted by the pilot, who have
financial need). Most significantly, the BOG fee waiver granted
by the CCCs, based on a student's household income, is
backfilled with General Fund. If this bill prohibits its use for
pilot course fees, enrollment will be limited to students who
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can and will pay full course fees. If BOG fee waivers are
eligible to be used, the amount of pilot course fees that are
waived would be ultimately reimbursed by the general Fund.
CalGrant awards, which certain CCC students are eligible for,
are also funded by the state General Fund. Due to the ambiguous
language about General Fund use, it is not clear whether
CalGrants could be used by students for these course fees. Use
of an individual student's CalGrant funds to pay for pilot
courses is unlikely to drive new state costs; the same student
would otherwise use the award for similar courses at a CCC or at
private postsecondary institution.
Proposed Author Amendments: The proposed amendments specify that
BOG fee waivers cannot be used to satisfy student fees for the
pilot program courses.