In this Issue:
- Update on Sponsored Legislation
- Budget Act Releases Proposition 51 Funds
- Legislative Process Enters “Second” House Phase
- Update on Federal Policy Discussions Concerning Community Colleges
- Federal Grant Opportunities
- Upcoming Events
Update on Sponsored Legislation
The League’s package of sponsored legislation has had a successful spring and early summer. So far each of our sponsored legislation has passed out of their respective committees and houses with strong bipartisan support. Two of our sponsored bills, AB 30 (Holden) and AB 612 (Weber), passed out of their respective policy committees earlier this month and must pass out of the Senate Appropriations Committee by August 30th.
Senator Leyva (SB 291) and Assemblymember Medina (AB 1314), both champions and authors of major financial aid reform bills, have designated their bills as two-year bills and pledged to work together to continue to study the issue and address California’s higher education affordability crisis.
Budget Act Releases Proposition 51 Funds
On June 13, the California Legislature presented Governor Gavin Newsom with a 2019-20 budget act that maintained many of his January priorities. Subsequent higher education trailer bill language was approved by the legislature on June 17. Overall, the 2019 Budget Act (AB 190 and SB 73) identified three investment themes: an effective government, promoting affordability and opportunity and supporting just and dignified treatment for all Californians.
The final budget agreement includes five notable expenditures for California Community Colleges:
1) A second year of free tuition to first-time full-time students and other local College Promise strategies,
2) Release of Proposition 51 bond funds
3) A buy-down of STRS and PERS rate increases,
4) A modest expansion of the Cal Grant program, and
5)Technical adjustments to the Student Centered Funding Formula (SCFF).
The 2019 Budget Act includes a cost-of-living adjustment (COLA) of 3.26% and a reduction of $25.5 million from the May Revision for deferred maintenance and instructional equipment, now totaling at $13.5 million.
This year, one priority focus of the League’s advocacy was the release of Proposition 51 facilities bond dollars. Thanks to over a dozen facilities advocacy days with district leaders from throughout California who joined us in advocacy to demonstrate the urgent need and value of college facilities, the Governor and Legislature approved funding for all projects in the 2019-20 Capital Outlay Plan. The 2019 Budget Act approves projects in the Governor’s January Budget and April Finance Letter supporting 15 new projects and 15 continuing projects using Proposition 51 bond funding. The budget also approves 24 new projects and provides 80% of construction funding for 5 continuing projects.
Proposition 98 and Community Colleges:
The California Legislature adopted an overall Proposition 98 funding level of $81.1 billion in 2019-20, $78.1 billion in 2018-19 and $75.6 billion in 2017-18, consistent with the revenue projections in the Governor’s May Revision. The 2019-20 budget agreement provides a payment of $389 million in Proposition 98 funding into the Public School System Stabilization Account (PSSSA), the first year for such a payment into the account established by Proposition 2 of 2014. Importantly, 2019 Budget Act honors the split of a 10.93% share of Proposition 98 for community colleges. Lastly, and vital to future budget deliberations, is an adopted provision which prohibits the state from making downward adjustments to the Proposition 98 funding level once a fiscal year is over.
Primary Proposal in the 2019-20 May Revision:
Funding Formula – Under the approved budget estimates, revenues would be sufficient to cover the 2018-19 Total Computational Revenue (TCR). However, it’s important to clarify that the agreement reduces apportionments in 2018-19 mainly by reducing transfer counts in the student success allocation, worth $49 million, rather than fully funding the SCFF as planned and anticipated by colleges at the start of the 2018-19 fiscal year. More details are expected next month around how the $49 million deficit will be addressed or distributed among districts. Further, the Legislature and Governor acknowledged the need to make technical adjustments to the new Student Centered Funding Formula (SCFF) to enable an effective transition. For 2019-20, the adjustments to the SCFF include:
- Caps performance funding at 10% of the formula, thereby maintaining the 70/20/10 percentage distribution.
- Capping year-to-year growth in a district’s student success allocation to 10% beginning in 2019-20.
- Modifies the definition of a transfer student to attribute to the district where the student completed the most units.
- Extends the hold harmless period by one year, through 2021-22.
- Requires colleges to use three-year averages for supplemental and outcomes funding.
Further, the 2019 Budget Act extends the “hold harmless” provision through 2021-22 and specifies that moving forward, districts will receive at least the 2018-19 TCR, adjusted by COLA.
Pension Liabilities – The 2019 Budget Act builds on a unique and welcome one-time $2.3 billion pay down of CalSTRS unfunded liabilities. Funding is also included to pay districts’ statutory employer contributions payment to CalSTRS for 2019-20 ($500 million) and 2020-21 ($350 million). The resources are allocated from the non-Proposition 98 General Fund.
College Promise and Free-Tuition – The final budget agreement retains an allocation of $42.6 million for local College Promise programs, which includes resources to fund a second year of free tuition to first-time full-time students with incomes above the California College Promise Grant thresholds. The program continues to provide districts flexibility to cover students’ essential non-tuition costs and implement strategies to build a college-going culture.
Cal Grants and Financial Aid – Currently, the Cal Grant program distributes less than 10% of Cal Grant resources to California community college students, despite the fact that our students comprise two-thirds of the higher education population. While the approved budget makes some effort to remedy this longstanding inequity, the final agreement, unfortunately, does not include funding for a financial aid program to specifically support California’s community college students. The 2019-20 budget agreement remains largely unchanged and proposes funding for 15,000 additional Competitive Cal Grant awards and a new Cal Grant access awards for students with dependent children attending a public higher education institution. It’s worth noting however that of the types of investment made in the Cal Grant system, the Competitive award is the best option for community college students since these awards are predominantly given to our students.
Longitudinal Data System – Maintaining a campaign promises and fulfilling a longstanding legislative interest, the Governor and Legislature include funding to plan a new statewide longitudinal data system which would connect information from education providers, employers, and workforce and health and human service agencies. The Budget Act establishes the California Cradle-to-Career Data System Workgroup to the following: 1) assess and recommend structural components, processes, and options for expansion and enhancement of data system functionality, and 2) advise ongoing efforts to develop, administer, and enhance the data system.
Legislative Process Enters “Second” House Phase
Currently, the state legislature is in the part of the legislative process where all bills must have passed out of their house of origin and be in the second house. In other words, all Assembly bills must be in the Senate and all Senate bills must be in the Assembly to be continued to be considered.
Typically, this is a time that legislators and staff conduct a more rigorous analysis of these policy proposals. Additionally, the 2019-20 budget will have been signed and enacted very soon, making it much more likely to pass any piece of legislation that spends a significant amount of money but was not included in the budget.
Below is the status of high profile legislation impacting community colleges.
AB 2 (Santiago) – Would implement provisions of the proposed 2019-20 budget extending free tuition to full time enrolled community college students in their second year of instruction Passed on to the Senate Appropriations Committee.
AB 48 (O’Donnell) – Would authorize a statewide general obligation bond to fund K-14 facility construction and modernization to go on the 2020 primary ballot and the 2022 general election ballot. The bond measure on the 2020 ballot would generate $13 billion, a number has not inserted in the 2022 bond measure. Currently in the Senate Government and Finance Committee.
AB 302 (Berman) – Legislation that would mandate that community colleges open up their parking lots to homeless students to camp overnight in unless colleges provide hotel vouchers, rapid rehousing services and housing focused emergency grants. While the bill now technically permits colleges to opt-out of the provisions around parking lots, the required services are prohibitively expensive. No additional resources were provided to either implement the bill or increase the level of services to homeless students. Passed on to the Senate Appropriations Committee.
AB 897 (Medina) – Would have increased the cap in a part-time faculty member’s course load that he or she could teach and still be considered part-time from 67% to 85% and required all part-time faculty members to have a course load between 67% and 85%. Held in the Assembly Appropriations Committee.
SB 206 (Skinner) – Would permit student-athletes to generate income via endorsement deals. It took amendments to delay implementation until 2023 and a statement of intent that the legislature will monitor the discussion on this issue at the national level. Passed on to the Senate Appropriations Committee.
SB 777 (Rubio) – Would create a prescriptive formula that would drive the hiring of additional full-time faculty if the state legislature had appropriated funds for that purpose. Held in the Assembly Higher Education Committee.
Update on Federal Policy Discussions Concerning Community Colleges
A Tale of Two Houses: An Update on the Higher Education Act
While both the Senate and the House of Representatives are working on their version of the Higher Education Act, neither the Senate Committee on Health, Education, Labor and Pensions (HELP) Committee, nor the House Committee on Education and Labor, have made their versions public yet.
Most observers agree that if a deal between both houses cannot be reached by January 2020, it will be very hard to craft a bipartisan agreement in an election year. This is particularly true with six Democratic Senators competing for the Democratic nomination. This section is intended to provide a brief update on where each committee is on the reauthorization of the Higher Education Act.
Senate HELP Committee: Active Negotiations but Missed Self-Imposed Deadline
It is widely acknowledged in the Capitol that Senator Lamar Alexander, Chair of the Senate HELP Committee and Senator Patty Murry, the committee’s ranking member, are engaged in active negotiations. The Republicans and the Democrats have appeared to largely agree on various items in the past and Senator Alexander is retiring at the end of the legislative session, which gives him an extra incentive to reach a deal.
However, they missed a self-imposed deadline to reach an agreement in May. The main point of conflict is that Senator Alexander would like to pass a “small” Higher Education Act that makes a few small changes while the Democrats want to pass one that makes larger structural changes. Additionally, pushing back against the proposed Title IX regulations is a major priority for Senator Murray, a position that Senator Alexander likely disagrees with.
It is recognized that if they do not publish something by Labor Day, it will be very hard for the Senate HELP Committee to reach a deal. Both Senator Alexander and Senator Murray have published key principles that they would like to see in a Higher Education Act, which is attached to this agenda item.
House Committee on Education and Labor: Parties Working in Silos
In contrast to the Senate, the House Committee on Education and Labor is working on the Higher Education Act along party lines. After the Republican’s version of the Higher Education Act was dropped without notice on the Democrats there is little appetite for Chairman Bobby Scott to work with his counterpart, Ranking Member Virginia Foxx.
It appears the House Committee on Education and Labor is waiting to see if the Senate HELP Committee produces a version of the Higher Education Act. As their process has been far more bipartisan, it is understood that they could craft a deal that would most likely be signed by President Trump. However, if nothing is produced by October, the House Committee on Education and Labor will likely release their version based off a set of principles released by Chairman Bobby Scott. These principles are attached to this agenda item.
Funding Bills Pass Out of House Appropriations Committee
Last week the House Appropriations Committee approved all 12 spending bills to fund the government for Fiscal Year 2020. The bill that funds the Departments of Labor, HHS and Education was linked with the bills funding the Departments of Defense, State and Energy. These bills contain the majority of spending for the federal government, which is seen as a strength for their passage and eventual signage. From the committee, the bills will be headed to the House floor, where they will likely pass on to the Senate.
The funding levels proposed by the subcommittees remained largely unchanged. However, it is important to note that they will likely be lowered by the Senate and President Trump would likely veto the current versions. For example, the current Department of Education proposal would increase spending over Fiscal Year 2019 by $4.5 billion and is above President Trump’s proposed budget by $12 billion. Additionally, the Senate is operating under budget caps set in 2011 by a deal that was reached to increase the debt ceiling. This means they cannot increase spending to similar levels as the House of Representatives.
Department of Education Releases Final Accreditation and Innovation Rules
As expected, Secretary DeVos released the Department of Education’s proposed revisions to accreditation regulations in line with the consensus that was reached during the negotiated rule-making process. They have been published in the Federal Register and the public will have 30 days to comment. Once public comment closes, the Department of Education will have to review each substantive response by November 1st in order for the rules to become effective in 2020.
The published rules will make it easier for colleges to get programmatic approval and permit accreditors more discussion when considering sanctions. The goal is to create more flexibility for colleges to innovate and create new programs, but could come at the cost of consumer protections for students. This is particularly true for those at for-profit institutions, as the Trump administration continues to roll back various consumer protection measures for students at those colleges.
The proposed rules can be found by clicking the following link:
Federal Grant Opportunities
Presented by Downs Government Affairs
The League, in partnership with Downs Government Affairs, provides a list of federal grants to assist your community college in improving its programs and services. If you have any questions about the following grants, please feel free to reach out to Thomas Downs at TCDowns@downsgovaffairs.com.
For a full list of federal grants available to community colleges, visit our Federal Grants page at: www.ccleague.org/federal-grant-opportunites
Upcoming Events
Board of Governors Meeting
July 15 | Sacramento, CA
Rice Awards
July 16 | Sacramento, CA
League Monthly GR Webinar
July 16, 11:00 a.m. | Online
Consultation Council
July 18 | Sacramento, CA
Student Trustees Workshop
Aug. 16-18 | Mission Valley DoubleTree, San Diego
Follow League Tracked Bills at: www.ccleague.org/advocacy/bill-tracking
Follow news related to Budget and Policy at: www.ccleague.org/advocacy
For more information, contact the League's Government Relations and Communications staff:
Lizette Navarette, Vice President | lizette@ccleague.org
Laura Murrell, Communications Manager | laura@ccleague.org
Ryan McElhinney, Legislative Advocate | ryan@ccleague.org
Rina Kasim, Member Resources Associate | rina@ccleague.org
Gerson Light-Sanchez, Government Relations & Communications Fellow | fellow@ccleague.org
