SACRAMENTO REPORT August 9, 2010 IN THIS SACRAMENTO REPORT:

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1 SACRAMENTO REPORT August 9, 2010 IN THIS SACRAMENTO REPORT: Budget Update Legislative Update Consultation Council Parcel Tax Proposal Initiative Update Financial Aid Bills of Interest EXECUTIVE SUMMARY Budget Update: Democratic leaders unveiled a united budget plan that was passed out of the Conference Committee on a party-line vote. The budget outline includes additional resources through delay of corporate tax cuts, an oil severance tax, and a tax swap that includes increased personal income taxes and a lowered sales tax. The plan would provide approximately $3 billion in additional resources to Proposition 98, but would suspend the guarantee locking in the maintenance factor funding that was a part of last year s budget deal. The measure includes $126 million for growth, no negative COLA, an additional $35 million over the Governor s budget for categorical programs and an additional $25 million focused on economic development and job training. Like the Governor s budget, the Democratic proposal does not include a fee increase. In other news, based on the feedback that we are receiving, it appears unlikely that an education bond will appear on the November ballot. Legislative Update: SB 1440 (Padilla) which would create a community college transfer degree guaranteeing a spot in junior status at a CSU for those students completing its requirements, was amended last week to include two controversial measures. One would condition state apportionments for a community college on the offering of the transfer degree and the other would provide for priority enrollment at a local CSU campus for students completing the requirement of the degree. We are working with the author s office and the Chancellor s Office, as well as other stakeholders to address the concerns over these amendments in this important piece of legislation. Consultation Council: Chancellor Scott decided last week to add an additional seat to the Consultation Council. The council will now have two classified representatives as CFT classified will be added as a represented group on the council.

2 The decision follows an appeal to the council by CFT as well as legislation introduced and subsequently dropped that was sponsored by CFT. The new member brings the total groups in the council to 19. Parcel Tax Proposal: The Foothill-De Anza Community College District has decided to go to the ballot this November 2 nd with a proposal that would charge property owners $69/parcel over a 6-year period. Should the measure pass, the district has estimated that it would generate approximately $7 million/year in additional revenues. Initiative Update: In a blow to backers of Proposition 25, which would lower the threshold for passing a budget from two-thirds to a majority, a Sacramento judge ruled that the measure s summary that will appear on the ballot cannot state that the measure would retain the two-thirds vote requirement for raising taxes. Financial Aid: A new report by the Institute for College Access and Success that focused on financial aid at 13 California community college districts finds in addition to the difficulty of filing out the FASFA form, red tape that students and colleges experience after the form has been completed also contributes to the inability of seemingly Pell-eligible students to receive federal financial aid. The study concludes that many students who apply for federal financial aid to help pay for college, often those with the fewest resources available to cover college expenses, are not eligible for financial aid because of red tape they encounter after completing the Free Application for Federal Student Aid (FASFA). BUDGET UPDATE Senate President Darrell Steinberg and Assembly Speaker John Pérez released a joint Democratic budget proposal last week that would fund Proposition 98 at approximately $3 billion above the Governor s proposed level. For community colleges, the Democratic budget would fund: $126 million growth $23 million to reject negative COLA $35 million in additional funding for categorical programs to backfill federal ARRA funds $25 million in Economic and Workforce Development funds to support enrollments in workforce training programs No fee increase Reject Senate proposed language on Basic Skills and Financial Aid Administration Reject proposed $10 million cuts to Part-Time Faculty Compensation and EOPS to augments SB 70 CTE funds Mandate reform that would include the establishment of a Joint Powers Authority (JPA) to accelerate mandate payments

3 The Democrat s mandates proposal will enable community colleges to access approximately $380 million in one-time moneys that are owed to districts to cover mandated state costs. The JPA will finance the payments through securities that it will be authorized to sell which the state will then payoff over time. In addition to establishing the JPA, the Democratic budget suspends two mandates for community colleges; the Law Enforcement Jurisdiction Agreement and the Integrated Waste Management Mandate. These mandates, at this point, would only be suspended for a year. The state would not be required to pay them while districts would not be required to undertake the programmatic requirements. Also included as a part of the plan are tax increases and a tax swap that would essentially shift Californians tax burden from the federal government to the state. The additional revenues include: Updated, higher revenue forecast from the LAO Delay in corporate tax cuts Oil severance tax Increase in personal income tax and sales tax cut (personal income tax increase could be deducted from federal taxes) Although the Democrat s budget proposal would provide funding above the level proposed by the Governor, it would suspend the guarantee. While suspension is often politically unpopular, a suspension in this case would provide more certainty around maintenance factor payments that will be owed to K-12 schools and community colleges. The Conference Committee worked last week to pass the Democratic budget plan on partyline votes. Republicans and the Governor have stated publically that the package is dead on arrival due primarily to the tax package included. However, the harsh tones of the rhetoric around their objection seem to have diminished. In the least, this budget will serve as a general building block for negotiations. We will likely see a vote on the Democratic package in possibly both houses in the coming weeks, along with multiple Big 5 meetings. Despite major reductions to Proposition 98 funding when compared to the Assembly Jobs Budget, our arguments to protect access and provide backfill for the categorical cuts without a fee increase won out among the Democratic leadership, at least for the time being. This is not the time to slow down in our advocacy, and budget negotiations are just heating up; it is important that your Fall enrollment applications and increased enrollment numbers are publicized through local news outlets. Bond Update Based on recent feedback that we have been receiving, it is unlikely that a school bond will go on the November ballot. There is much concern that voters will be hesitant to authorize additional debt (similar to the concerns surrounding the water bond) even for education facilities given the issues around needing to find additional revenues to fund CalWORKS, child care, K-12 education and higher education.

4 LEGISLATIVE UPDATE Last week SB 1440 (Padilla) which would require community colleges to create transfer degrees that would guarantee admission to a CSU in junior standing for students completing the degrees requirements, was amended to include controversial language that would condition a districts ability to receive apportionment funding on the offering of degrees for transfer. The language was proposed by the Department of Finance in order to eliminate the mandated costs that requiring districts to offer to create the transfer degree would create. Specifically, the language states: (b) as a condition of receipt of state apportionment funds, a community college district shall develop and grant associate degrees for transfer that meet the requirements of subdivision (a) This would be the first time, which we are aware, that such language has been used to eliminate the need for the state to reimburse local districts for a mandate. We are working with the author s office and other stakeholders to remove this language and find another way to deal with the mandate issue. Other recent amendments add language that would provide for priority enrollment for students who complete the requirements of a transfer degree at their local campus. We have heard that the current way CSU provides for priority enrollment within a service area has been a problem for some community college districts. We are working with the author, the Chancellor s Office and other stakeholders to find a way to fix this language, which is intended to provide a benefit to many community college students who are place bound, yet has disadvantaged some campuses because of the way CSU currently undertakes its priority enrollment practices. SB 1440 (Padilla) is scheduled to be heard in Assembly Appropriations on Wednesday and we have been told that the bill will go to the committee s suspense file where we can continue to work on these issues until the suspense file is expected to be heard on Friday. CONSULTATION COUNCIL Chancellor Scott announced on Friday that he will be adding an additional seat to the Consultation Council. The additional seat will be filled by a classified representative from CFT. The decision comes after much deliberation by the Chancellor and after legislation that would have created the seat in statute was carried and then subsequently dropped by author Assemblyman Warren Furutani. The Consultation Council is now comprised of 19 organizational groups whose purpose is to facilitate local community college participation in policy development. The council is chaired by the Chancellor and used to inform policy decisions. In deciding to expand the membership of the council, Chancellor Scott explained that he chose CFT, as opposed to the Classified Senate, as the additional classified representative on the council because they are the second

5 largest group of classified staff (the first being CSEA that already has a seat on the council) and because they were the ones that initiated the conversation to expand the Consultation Council. Further, the Chancellor noted in his memo that not many community college districts have a Classified Senate. PARCEL TAX PROPOSAL Foothill-De Anza Community College District has decided to place a parcel tax on the November 2 nd general election ballot. The measure would charge property owners $69/year for a six year period. No money will be spent on administrative salaries or benefits, but the district says it will go to cover classrooms, labs, libraries, maintain critical job training programs and supplement state funding for support services for students. The district is estimating that the parcel tax would generate approximately $7 million/year in additional funding for the two colleges. The district recently conducted a poll that indicated the local communities would support the $69 tax. However, the initiative faces a difficult ceiling, like all parcel taxes, needing two-thirds of those voting to approve the measure. Senator Simitian continues to push his SCA 6 which would lower the threshold to pass a parcel tax from two-thirds to 55%. The bill is still on the Senate floor where it needs two-thirds vote to pass and is not receiving any support from Republicans. INITIATIVE UPDATE In a blow to proponents of Proposition 25, which would lower the threshold required to pass a budget from two-thirds to a simple majority, a Sacramento judge ruled that the ballot language for the measure cannot say that it retains the two-thirds vote for approving tax increases. Many recent polls have found significant support among Californians for lowering the vote requirement to pass a budget from a supermajority to a simple majority. However, that support significantly declines when respondents are asked if they would support lowering the threshold to pass a tax increase to a simple majority. Opponents of the measure have been arguing that the language in Proposition 25 would provide a loophole that would enable legislators to raise taxes with a simple majority vote of both houses of the legislature. Proponents have argued that is not the case and the measure would retain the two-thirds requirement for tax increases. The judge that made the decision did not throw out the language based on the arguments of the proponents, instead, he ruled that the language is misleading because it could be interpreted by voters that they have to vote for the measure in order to maintain the two-thirds supermajority required to raise taxes. Proposition 25 supporters have said that they will appeal the decision.

6 FINANCIAL AID A new report by the Institute for College Access and Success finds that many students who apply for federal financial aid to help pay for college, often those with the fewest resources available to cover college expenses, are not eligible for financial because of red tape they encounter after completing the Free Application for Federal Student Aid (FASFA). The report focuses on financial application information from 13 California community colleges and includes information from interviews with financial aid officers, and a survey conducted of students who completed FASFAs and appeared to be eligible for Pell Grants, but did not complete the full process. Among the study s findings: Very few applicants (2%) became ineligible for Pell Grants, but students selected for verification were less likely to receive grants than those who were not selected. Financial aid administrators view additional requirements after a student completes a FASFA as a key reason why some students who may be eligible for a Pell Grant do not receive one. In a survey, almost two-thirds of students who appeared to be Pell-eligible, but had not completed the application process either did not know the status of their application or incorrectly identified it as being complete. Every college in the sample verified more information or students than the minimum required under federal regulations. The 13 community colleges combined spent between $1.7million and $2.5 million attempting to verify student information. You can view the report in its entirety here. LEGISLATIVE UPDATE AB 220 (Brownley) was placed in the Senate Appropriations suspense file. The measure would place a Kindergarten through University education facilities bond on the November 2 nd general election ballot. AB 1702 (Swanson) was placed in the Senate Appropriations suspense file. The measure would authorize community colleges to provide inmate education at state correctional facilities and would provide funding for credit classes provided in the correctional setting at the credit rate. AB 1712 (Furutani) moved out of Senate Appropriations and has gone to the Senate floor. The bill would require the governing boards of school districts and community college districts to grant permanent classified employees who are elected to the State Legislature a leave of absence and entitles those employees to return to their former positions after they have completed their service in the Legislature.

7 AB 1713 (Furutani) moved off of the Senate floor and has gone back to the Assembly for concurrence in Senate amendments. The bill would make various changes to streamline, consolidate, and delete certain California Community College reporting requirements. AB 1997 (Portantino) was placed in the Senate Appropriations suspense file. The bill would create a pilot project within the community college Chancellor s Office for five community colleges to maximize state and federal financial aid opportunities for their students. AB 2047 (Hernandez) was placed in the Senate Appropriations suspense file. The bill would authorize the University of California and the California State University, until January 1, 2020, to consider race, gender, ethnicity, national origin, geographic origin, and household income, along with other relevant factors, in undergraduate and graduate admissions, so long as no preference is given, if and when the university, campus, college, school, or program is attempting to obtain educational benefit through the recruitment of a multifactored, diverse student body. AB 2079 (Torlakson) was placed in the Senate Appropriations suspense file. The bill would require a collegiate athletic recruiter representing a postsecondary educational institution in California or outside California to provide California student athletes with specified information relating to the college athletic program within one week of initiating personal contact with the student athlete for purposes of athletic recruiting. The bill would also require any scholarship offer to be made in writing within one week of a verbal offer and prior to a student athlete signing an athletic scholarship agreement with a postsecondary educational institution and to include specified information relating to the institution's athletic program. AB 2086 (Coto) passed out of Senate Appropriations and has gone to the Senate floor. The bill would require postsecondary education institutions that participate in the Cal-Grant program to provide information on accessing licensing examination rates for the most recent graduates of programs leading to employment for which passing a state licensing examination is required, if such data is available through the internet from the licensing or regulatory agency. AB 2203 (Solorio) passed out of Senate Appropriations and has gone to the Senate floor. The bill would require the CCC board of governors and the CSU trustees, and request the UC regents, to review each respective segment's student transfer policies, and to revise those policies, to ensure that students may continue to use a textbook selected for a transfer or general education course, regardless of publication date, for as long as the textbook is available to students and the information contained in the textbook is current and reflects contemporary thinking in the discipline. AB 2297 (Brownley) passed out of Senate Appropriations and has gone to the Senate floor. The bill would provide increased flexibility for community college districts to set nonresident student fees.

8 AB 2302 (Fong) was placed in the Senate Appropriations suspense file. The bill would serve as a compliment to SB 1440 urging the UC to develop a transfer pathway for community college students. AB 2344 (Nielsen) passed out of Senate Appropriations and is now on the Senate floor. The bill would clarify that "institution of higher education," for the purposes of the Board of Registered Nursing approval of nursing schools, includes community colleges and private postsecondary institutions offering an Associate of Arts (AA) or an Associate of Science (AS) degree. Clarifies that a nursing school that is not an "institution of higher education" may affiliate with an institution of higher education offering either an AA or an AS degree to individuals who graduate from the nursing school. AB 2385 (Pérez) was placed in the Senate Appropriations suspense file. The bill would establish the Pilot Program for Innovative Nursing and Allied Health Care Profession Education at the California Community Colleges under the administration of the Office of the Chancellor of the California Community Colleges to facilitate the graduation of community college nursing and allied health students by piloting innovative models to expand the state's capacity to prepare a qualified health care workforce. AB 2448 (Furutani) was amended to provide for some changes in the reporting requirements for those districts that chose to use best value in the procurement of equipment and materials. The bill will now go to the Senate floor. AB 2523 (Eng) passed out of Senate Appropriations and has gone to the Senate floor. The bill would authorize state approved apprenticeship programs to provide electrician training to their own members under their own general supervision. AB 2682 (Block) was placed in the Senate Appropriations suspense file. The bill would establish a pilot project within the California community college Chancellor s Office to develop a single assessment tool and provide for a repository of student assessments that local districts may access. ACR 138 (Nava) was placed in the Senate Appropriations suspense file. The bill would express the intent of the Legislature that part-time and temporary faculty receive pay and benefits that are equal to those of specified tenured and tenure-track faculty, to the extent funding is provided, and that the California Community Colleges increase the percentage of full-time tenured and tenure-track faculty. SB 675 (Steinberg) was placed in the Assembly Appropriations suspense file. The bill would establish the Clean Technology and Renewable Energy Job Training, Career Technical Education (CTE), and Dropout Prevention Fund Act (the Act), which awards grants for construction and enhancement projects associated with educating and training individuals for jobs in clean technology industries.

9 SB 957 (Price) passed out of Assembly Appropriations and has gone to the Assembly floor. The bill would require the Student Aid Commission, in cooperation with specified entities and persons, to develop and regularly update the areas of occupational or technical training for which students may utilize Cal Grant C awards and would require the commission to give priority in granting the awards to students pursuing occupational or technical training in areas that meet specified criteria. SB 972 (Wolk) was amended to cross-reference the duty to defend, in addition to the cost of defense, as an element of contractual indemnity under existing law. All other provisions of the bill were removed. SB 1143 (Liu) was placed in the Assembly Appropriations suspense file. The bill would require the Chancellor s Office to create a task force to develop a plan and provide recommendations to the legislature for improving community college success. SB 1332 (Dutton) passed out of Assembly Appropriations and will now go to the Assembly floor. The bill would establish a process for the California Department of Public Health to formally recognize radiologic technology schools accredited by the Joint Review Committee on Education in Radiologic Technology (JRCERT). SB 1425 (Simitian) was placed in the Assembly Appropriations suspense file. The bill would establish minimum standards for CalSTRS and CalPERS with respect to final compensation. SB 1440 (Padilla) was amended. The amendments would condition receipt of state apportionments on offering transfer degrees and would provide for priority status at a student s local CSU campus. The bill would create a community college degree for transfer that would be accepted by CSU and provide for guaranteed admission with junior standing at a CSU. SB 1460 (Cedillo) was placed in the Assembly Appropriations suspense file. The bill would establish the California DREAM Act of 2010 providing for financial aid opportunities for AB 540 students. If you have any questions about any bills or would like further information or an update on any legislation, please call the office at (916) or Patrick at or Mark at

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