Controversial new plan seeks to lower unit fees at community colleges, but detractors call it merely “cosmetic”.
January 2008
The fate of a new plan for California Community College funding and governance will be decided on February 5th when voters check Yes or No for Proposition 92. The Official Voter Information Guide briefly summarizes the issues, but does not fully express the passion of educators on both sides or the detailed implications of Proposition 92 in layman’s terms. Then again, when has politicalese ever been easy to translate?
Three main changes comprise Proposition 92, written by president of the Community College League of California Scott Lay and Dennis Smith, California Federation of Teachers Secretary Treasurer.
A decrease in CCC student fees from $20 per unit to $15 per unit is one of these alterations. To ensure that fees stay at roughly $15 per unit, Proposition 92 would also require a Legislature simple majority vote to reduce fees and a two-thirds vote of both houses for any fee increase.
Any annual fee increase would be limited to the lower of either 10 percent or the percentage change in per capita personal income in California, which the Legislative Analyst’s Analysis stated averages usually about four percent.
“For a lot of students that are just starting out they are not always receiving support from resources such as family or they’re working two jobs because the cost of living in California exceeds a lot of the states in the U.S.,” said Pasadena City College student and Associated Student Vice President for External Affairs Natalie Courtney. “It’s an opportunity to make [college] affordable for as many people as possible and encourage people to continue education after high school.”
Californians for Fair Education Funding, a coalition of businesses, educators and taxpayers including the California Teacher’s Association, heads the No on Proposition 92 campaign and argues that the measure does nothing to help low-income students with tuition costs because those students already have their fees waived.
“This (measure) perpetuates the myth that community colleges are accessible if the fees are low and it’s simply not true,” said Yes on Proposition 92 Higher Education Consultant Mary Gill, who has worked in the higher education system for 35 years. “Fees are a message of accessibility, but true accessibility comes when you get money for textbooks, rent, car insurance, child care, medical problems and food. Those are the financial aid challenges and this does nothing for that. It’s cosmetic.”
A ballot argument for Proposition 92 states that when the Legislature doubled CCC fees in 2004, 305,000 fewer Californians enrolled.
“Our enrollments swing up and down depending on what the enrollment fees are,” said Citrus College Superintendent/President Michael Viera. “What I’m looking for is a more consistent budgetary process that will help us to do a better job of planning.”
Gill said the ballot argument is untrue, however, and that the 305,000 amount came from projections that were not met, when in reality enrollment decreased by 11,000.
“When fees decreased last spring from $26 down to $20 the enrollment still went down,” said Gill.
Any fee increase would also be rounded down to the nearest dollar as Proposition 92 requires. Therefore, hypothetically, if two-thirds of both houses vote for an increase and the four percent growth in per capita personal income is the lower amount, that would result in a 60 cent increase, which would round down to $15, keeping fees the same.
Paul Steenhausen is a Senior Fiscal and Policy Analyst for the Legislative Analyst’s Office, a non-partisan fiscal and policy advisor, and the main analyst for Proposition 92 who wrote the LAO Analysis that appears on the Official Voter Information Guide.
Steenhausen estimates $70 million less in revenue for community colleges if Proposition 92 passes and fees are decreased, but community colleges support the proposition partly because of a new funding formula that would recognize them separately from K-12 schools.
“In the past when there is a budget crisis like there is now, the Legislature has imposed an increase on community college fees,” said Pasadena City College Board of Trustees member Jeanette Mann. “In a very real sense they have been used to using community college students and fees as a cash cow.”
The LAO said the Governor and Legislature can use a fee increase to offset General Fund support and alternatively, they can permit a fee increase to supplement state support.
“This (Mann’s view) is one of the great myths about CCC funding,” said Director of Higher Education for the Legislative Analyst’s Office Steve Boilard. “The fact of the matter is that all student fee revenue is retained by community colleges. The caveat is that the allocation of Prop 98 funds among the various districts depends on how many students each district has and how much fee revenue those students bring in.”
Since Proposition 98 was adopted in 1988, the state must provide a minimum level of funding for K-14, elementary and secondary schools and community colleges, using the state General Fund and property tax revenues. Each year a new K-14 minimum amount is calculated by adjusting the previous year’s level based on changes in the economy and K-12 attendance.
Proposition 98 also requires that K-14 receive at least a certain percentage, about 40 percent, of General Fund revenues per year. Recently, community colleges have received between 10 and 11 percent of total Proposition 98 funding, according to Steenhausen’s analysis.
This accounts for about six billion dollars toward the 109 CCC, with each receiving a different amount based partially on size. Mann said that PCC, with 30,000 students, receives about a million dollars for every 100 million dollars of funding.
“We have never received the full 11 percent funding,” said Citrus College Superintendent/President Michael Viera. “Part of the Prop 92 guarantee is to try to ensure we receive the full funding we were to be allocated under Prop 98.”
Proposition 92 would not change the existing 40 percent requirement, but would replace the single funding requirement for K-14 with two requirements, one for K-12 and one for community colleges. While the K-12 funding formula would use the same factor of K-12 attendance currently used, the CCC formula would replace K-12 attendance with a growth factor based on the young adult population to calculate the community college minimum funding level.
“The truth is however many students we have in the first grade in the Pasadena District does not determine how many students we have as much as what the economic situation is because once people lose their jobs we have an influx of students because people come back for job training,” said Mann. “The percentage of the adults in the district, unemployment rate, and those kinds of factors make more sense. K-12 enrollment is going down, while community college enrollment is going up.”
But Gill said that Proposition 92 advocates are “taking two steps and trying to justify it.”
“Instead of making the (funding) requirement community college enrollment, what they’ve done is set up this system by which they’ll capture the remaining bubble of this tidal wave of enrollment that’s the echo of baby boomers that goes through ages 17 to 25 in the next 8 years. Then what happens?”
The new population growth factor in Proposition 92 uses the greater of two population growth rates: (1) state residents between 17 and 21 years old or (2) state residents between 22 and 25 years of age. The growth factor increases in any year that the state’s unemployment rate exceeds five percent, which Steenhausen noted has been 13 of the past 15 years, but Prop 92 limits the total CCC population growth factor to no more than five percent in any year.
Since the new CCC population growth factor is forecast to grow faster than K-12 attendance, Steenhausen estimated that from fiscal year (July 1-June 30) 2007-08 through 2009-2010 the initiative would require California to spend more for K-14 education than currently—an average of about $300 million per year.
Proponents fear that because Proposition 92 does not specify where the new funding will come from, K-12 spending may be cut, though Proposition 92 does not intend to affect the funding already going to K-12.
However, because Proposition 98 will still apply and General Fund spending for K-14 must be at least 40 percent, Proposition 92’s new funding formula would not apply in years when K-14’s share is less than 40 percent. The LAO predicts this may happen sooner than expected if Prop 92 passes.
“For the third year we are projecting it will be a Test 1 year, which means that if you added together the CCC guarantee and the K-12 guarantee under Proposition 92 it would total less than the 40 percent underlying guarantee,” said Boilard.
Why would someone propose a financial change that might not be valid in three years?
“My personal feeling is I’m not sure [Proposition 92 proponents] expected that this initiative would essentially not apply as quickly,” said Boilard.
Test 1 is one of three tests in the State Constitution that uses a formula to calculate K-14 spending. Based on various economic factors and average daily attendance, the LAO and other groups decide if it is currently a Test 1, 2 or 3 year and predict the status of future years. Whichever test formula would generate the most money to K-14 that year is the formula that is used.
“[Test 1] has only been in effect once so far since 1988, that very first year (after Proposition 98 was passed),” said Steenhausen. “Since then it’s been Test 2 or 3 years.”
If Proposition 92 passes and a Test 1 year occurs, the CCCs would receive the funding they do now but would get $70 million less annually due to the $5 per unit fee decrease.
The Test 1 projection is an estimate and Boilard and Steenhausen cannot guarantee that Test 1 would apply in three years or how long it would be in effect because of the various contributing factors.
The third main provision of Proposition 92 is the amendment of the state Constitution regarding how the CCCs are governed.
Currently, the colleges are operated by districts governed by locally elected Boards of Trustees. These boards have substantial independence in terms of determining course offerings, managing district property and hiring and compensating campus staff.
The CCC Board of Governors oversees the statewide system and the chancellor’s executive staff—deputy and vice chancellor—are appointed by the Governor.
The BOG is made up of 17 members (16 voting and one nonvoting), who are appointed by the Governor to terms of two or six years. Proposition 92 would amend the state Constitution to increase the number of BOG members to 19 voting members.
“What we often have, though this is not true with Governor Schwarzenegger, are governors who have appointed people to the BOG not based on their experience or background or interest in community colleges but on whether they were big contributors to their campaign and that has been true for both Republican and Democratic governors,” said Mann.
Presently the Governor is required to select five of the 17 members from lists of persons approved by community college organizations, such as faculty and staff groups. Under the new plan, the Governor would be required to appoint additional BOG members from the lists provided by community college organizations.
“I worked for the CCC chancellor’s office for several years and there were strong and weak board members and it wasn’t because of who appointed them,” said Gill. “They’re not assuring that they’ll get the best; they’re just assuring that they will be insiders.”
If Proposition 92 passes, BOG would also have the authority to appoint and set compensation levels for executive officers, which is currently the role of the Governor, and BOG would have more power over how to spend finances allocated for its administrative expenses in the annual budget.
Opponents also argue that there would be no accountability for how money would be spent, but Mann said that preexisting laws require BOG and independent colleges to be audited and 50 percent of the money that goes into CCC to go toward teaching faculty.
BOG’s current responsibilities and community college district authority would not change under Proposition 92, and other than BOG’s increase in control over its funds, the BOG changes would have no fiscal effect.
Should Proposition 92 not pass, the status quo would remain for CCC funding, governance and fees.
