NEW ARTICLES AS OF 2-24-06 Redirecting Unspent Growth Funds At its January 2006 meeting, the Board of Governors directed the Chancellor and staff to work through the consultation process to develop a plan for redirecting unspent 2005-06 growth funds, to the extent that they materialize, to meet key system priorities that were not addressed in the Governor’s proposed 2006-07 State Budget. The Chancellor’s Office staff convened a meeting of the “Budget Workgroup” to develop a plan and recommendations for the redirection of unspent growth dollars. According to the Chancellor’s Office, based on the first principal (P-1) apportionment FTES of 2005-06, about $68 million of unspent growth appropriations may be available for redirection. This projection, however, is subject to considerable revision, depending on actual enrollments for the upcoming winter, spring, and summer terms. The recommendations by the Budget Workgroup are based on the assumption that the specific elements of the Governor’s Budget proposal are not reduced in the May Revision. The plan is also based on the assumption that the System Office will lead ongoing discussions regarding the details of allocating equalization funds for 2006-07. If the May Revision results in a downward revision of any specific element, the consultation process would be used to quickly revisit and, if needed, revise the redirection plan. Recommendations The first funds identified as available for redirection will be allocated to a “core” priority consisting of the following three items: a. Fully fund part-time faculty office hours and health insurance, based on current law (estimated at $9 million). b. Equitable funding of noncredit students ($30 million). c. Rural access grants (estimated at $5 million). To the extent that the available amount is less than what is needed for this core priority, amounts for a, b, and c would be reduced on a pro-rata basis. To the extent that additional funds are available, they would be redirected in the following priority order: d. Restore prior-year cuts to Matriculation (up to $24 million). e. Re-establish funding for professional development of faculty and staff (up to $5 million). f. Increase full-time faculty positions. It is expected that the Chancellor’s Office staff will present the above recommended plan to the Board of Governors at its March 2006 meeting for consideration. Legislative Update February 24, 2006, is the deadline for the introduction of new legislation for the 2006 legislative session. The following is a summary of bills affecting California community colleges that are in the works so far: AB 1780 (Baca, D-Rialto)—Enrollment Fees Existing law requires the governing board of each community college district to charge each student a fee of $26 per unit per semester. This bill would reduce the amount of this fee to $11 per unit per semester, effective with the fall term of the 2006-07 academic year. AB 1943 (Nava, D-Santa Barbara)—Courses of Instruction This bill would delete the provisions that require the Board of Governors to review and approve courses of instruction that are not offered as part of an educational program approved by the Board of Governors. The bill would instead require community college district governing boards to establish policies for and approve these courses of action. AB 1968 (Leslie, R-Tahoe City)—Transportation Fees With respect to transportation fees, existing law requires a governing board maintaining transportation services to adopt rules and regulations governing exemption of low-income students from these fees and authorizes the governing board to adopt rules and regulations that provide for the exemption of others. This bill would delete the provisions relating to the adoption of the rules and regulations governing the exemption of low-income students and other students from these fees. The bill would instead authorize the governing board of a community college district to adopt rules and regulations to exempt or partially exempt low-income students from this fee. AB 1972 (Daucher, R-Brea)—Employment of Faculty Existing law imposes limits on the duration of the employment contracts that a community college district governing board may offer to prospective faculty members, including a limit of one year on the first contract offered to a contract employee. This bill, notwithstanding the limits referenced above or any other provisions of law, would authorize the Board of Governors to designate, by resolution, critical areas of study in which there is a shortage of qualified instructors. The designation by the Board of Governors of these critical areas of study would be effective for three years, after which the Board of Governors would be authorized to extend the designation by up to three additional years. The bill would authorize a local district governing board to meet and confer with the representative of the faculty members of that district as to which, if any, of the critical areas of study would be applicable to that district. If a critical area of study is applicable to a district, the district would be authorized to enter into full-time, nontenured contracts of up to three years in duration to employ faculty to teach in those critical areas of study. The bill would also require that, if the district wishes to extend the term of a contract beyond the three-year period, the governing board shall offer the faculty member a choice between accepting a tenure track position or remaining in the nontenure track position. AB 2024 (Benoit, R-Palm Desert)—Personal Services Contracting Existing law permits K-12 schools and community college districts to use personal services contracting, in order to achieve cost savings, for all services that are currently or customarily performed by classified school employees if specified conditions are satisfied. This bill would repeal those provisions. Comment: Since the passage of SB 1419, several bills have been introduced by Republican authors (with the support of the Governor) to repeal this law. Those efforts have failed in the Democratically controlled committees. Twenty-seven Republicans have signed on as co-authors of AB 2024, but it will likely suffer the same fate as the previous attempts to repeal SB 1419. SB 1264 (Alquist, D-Santa Clara)—Student Financial AidThis bill would change the annual deadlines for submission of completed financial aid applications for the various Cal Grant awards from March 2 to June 30. SB 1290 (Ducheny, D-San Diego)—Community College Facilities This bill would require that each offsite building acquired or constructed on or after January 1, 2007, for community college use shall meet the standards of one or more of the following: (a) the Field Act, (b) standards or offsite building acquired pursuant to Section 81149, or (c) the appropriate standards for commercial buildings constructed within an earthquake zone, as set forth in the California Building Standards Code. Stay tuned more bills to follow after the February 24 deadline passes. State Owes Community Colleges Almost $73 Million State Controller Steve Westly recently released a report revealing that the state owes more than $2 billion to local government agencies for emergency, educational, and other state mandated local services. Going back to the 2002-03 fiscal year, the state owes California community colleges $72,854,080. Westly recently proposed legislation that would repay public safety mandates within three-years (did we mention he is running for Governor?) and allow agencies to bond against the money they are owed so they can be paid immediately. If and when the state makes good on paying mandates, it would have to pay accrued interest that would reach into the hundreds of millions of dollars. Westly was quoted as stating, “Our first responders could use the $500 million they are owed for fire trucks, bullet proof vests and bioterrorism training. If we want our schools and emergency departments to deliver at 100%, then we need to fund them at 100%.” Community College Mandates The 2002-03 Budget Act directed that all unexpended general fund appropriation balances related to reimbursable state mandated local agency programs be reverted to the General Fund. This action resulted in approximately $40 million in additional deficiencies for local agency mandated cost programs. The 2002-03 Budget Act disallowed the Controller to make any payment from the Budget to reimburse community colleges for the claimed costs of state mandated education programs. Any future reimbursements to community colleges are to be paid from an item in the community college budget. Additionally, pursuant to Government Code Section 17561.5, payment of accrued interest is required when payment is made more than 60 days after the filing deadline. As of June 30, 2005, the accrued interest due to local agencies, school districts, and community colleges is estimated to be $119 million. Interest will continue to accrue until the claims are fully paid. The Controller’s report identified the following mandates that have not been funded for fiscal years 1995-96 through 2004-05:  Collective Bargaining  Health Fee Elimination  Investment Reports  Open Meetings  Peace Officers Procedural Bill of Rights  Absentee Ballots  Law Enforcement College Jurisdiction Agreements  Health Benefits for Survivors of Peace Officers and Firefighters  Law Enforcement Sexual Harassment Training Finally The Governor’s proposed State Budget for 2006-07 includes $133 million to reimburse K-14 education for state mandated claims for 2004-05. The community college section of the Budget, Item 6870-295-0001, provides that the State Controller shall reimburse colleges for costs incurred for health fee, sex offenders disclosure requirements, and law enforcement jurisdiction agreements. In addition, this Budget Item specifies that community colleges shall also receive a proportionate share of the funding provided in Item 6110-295-0001 (the K-12 section of the Budget that contains the $133 million appropriation). Unhappy With the 50% Law? How About a 65% Law? Historically, community college management has held the view that the “Fifty Percent Law,” which requires each community college district to spend half of its “current expense of education” each fiscal year for the salaries of classroom instructors, is unnecessary for community colleges. This provision is a carryover from when community colleges were under the administrative control of the K-12 system (prior to 1964). The California community college system is the only higher education system that has such a requirement. In recent years, attempts have been made by administrative groups to seek the repeal or modification of the “Fifty Percent Law.” As a system, the community colleges are meeting the underlying purposes of the 50% law. Average class size within the system is not increasing; in fact, class size has been holding steady or decreasing slightly. There has been no growth in the number of administrators. In fact, the number of administrators in the system continues to remain below the number employed in 1999. At the same time, there are now more than 1,200 fulltime faculty than there were just a decade ago. There are also more than 5,000 more classified nonmanagement staff. In terms of compensation, during the past decade, the systemwide hourly rate for part-time faculty increased by 33%. All of these increases are considerably in excess of the cost-of-living adjustments (COLAs) that were funded by the state. 65% Proposal Now there are proponents of a 65% solution. Everybody wants more money in the classroom, but most people do not support a tax increase to pay for it. Solutions are being considered that would distribute education dollars differently without raising taxes. The basis of the “65% solution” is a proposal that would require K-12 school districts and community college districts in California to spend at least 65% of their budgets on classroom expenses. Proponents want to see all 50 states impose the requirement by 2008. At least 12 states are considering the idea, with Texas already having implemented it. California voters may see the idea on a ballot as early as 2008. Proponents of the plan say it will make school agencies spend money more efficiently. They say it will also improve student achievement by funneling dollars—$14 billion nationally and $1.5 billion in California—away from administration and toward student learning. K-12 districts nationwide spent an average of 61.3% of their budgets on classroom expenses in 2002-03, the last year for which figures were available from the National Center for Education Statistics. California K-12 schools spent 60.8%, and most community college districts spent within the 50.1% to 53% range. Only two states—New York and Maine—exceed the 65% mark. Critics of the proposal point out that a one-size-fits-all solution doesn’t work, particularly for a state the size of California. Part of the problem is the plan’s definition of classroom expenses. The 65% figure includes teacher salaries and benefits, supplies, classroom aides, and sports and arts programs. But it doesn’t include key items such as transportation, food service, maintenance, librarians, and counselors. A recent study by Standard and Poor’s found no significant relationship between the amount of funds spent in the classroom and student achievement. However, proponents point out that the states that scored highest on the 2003 National Assessment of Educational Progress spent a bigger percentage of funds on instruction, on average, than did lower-ranking states. The five lowest-scoring states (including California) spent the least on instruction. The primary proponent of the 65% solution is a Republican political consultant who runs First Class Education, the nonprofit group dedicated to advancing the proposal. The group is also touting the possible “political benefits” of the 65% solution, including showing dissent within education unions and helping build Republican credibility on education issues—thereby creating a base of support for charter schools and vouchers, which education unions say detract from public school systems. Stay tuned to see if your signature is going to be requested on the 65% initiative. Ask Arnold . . . Can Districts Freeze Step and Column Increases? Q. Are there many districts that freeze step and column increases or defer the increases for a year? A. We view freezing step and column as a loan, not a cut, and usually try to find another way to generate savings. Let me explain. When you freeze step and column, one of two things generally happens. Either you make up the step and column in a subsequent year, which means the freeze really only generates one-time dollars that will create a need to generate ongoing dollars in a future year. This option doesn't really save the district much in the longer term. Alternatively, districts that freeze step and column for a year and never make it up find that employees are one year behind for the rest of their careers and on into retirement. Their salaries are always behind where they would have been. For many employees, this means the future cost of the step and column freeze is a 3% to 5% reduction for the rest of their careers and the same reduction in their retirement base. This option is singularly unattractive to teachers and unions. Nonetheless, there are districts that have done both of these options. But in every case of which we are aware, it is like a ticking time bomb. At every subsequent negotiation, the first priority is to get that step and column movement back. That discussion can prevent the parties from reaching agreement on any other issue. So, except in extreme cases where there is no cash, no budget, and no other option, try to find another way to reduce expenses before freezing step and column increases. Is There a Limitation on Classified Retirees’ Earnings? Q. Is there a limitation on classified retirees’ earnings? A. The California Public Employees’ Retirement System (PERS) does not have a monetary limit on retired classified employee earnings. There is, however, a limit on the number of hours that can be worked in a fiscal year—960 hours. Effective January 1, 2006, the Legislature changed the law that allows a state agency or public agency covered by PERS to employ a retired person without reinstatement (Chapter 328/2005). The change allows a retired person to be temporarily employed for 960 hours in any fiscal year without reinstatement. The Public Employees’ Retirement Law defines fiscal year to mean any year commencing on July 1 and ending on June 30. The change took effect January 1, 2006, midway through the fiscal year. The following provides the maximum hours a state agency or public agency may temporarily employ a retired person without reinstatement from retirement or loss or interruption of benefits: January 1 through June 30, 2006--960 hours maximum July 1, 2006, through June 30, 2007--960 hours maximum Future Fiscal Years--960 hours maximum Retirees also need to be aware of the earnings limitation on social security benefits. If a person is under full retirement age (FRA) when he/she starts receiving Social Security payments, $1 in benefits will be deducted for each $2 the person earns above the annual (calendar year) limit. For 2006, that limit is $12,480. The earliest age a person can receive Social Security retirement benefits remains 62, even though the FRA is rising. In the year a person reaches his/her FRA, $1 in benefits will be deducted for each $3 he/she earns above a different limit, but only counting earnings before the month he/she reaches FRA. For 2006, the limit is $33,240. Starting with the month a person reaches his/her FRA, he/she will receive benefits with no limit on his/her earnings. Retirees must consider both PERS and Social Security requirements for benefits as they relate to hours worked and maximum earnings.

posted by Susan Bray on February 27, 2006 08:23 PM

New Under the Dome - January 9, 2006 Governor Looks to the Future in State-of-the-State Address In his highly anticipated third State-of-the-State address, Governor Arnold Schwarzenegger laid out a sweeping vision for California that hearkened back to the future, recalling former governors of both parties who built the state: “In the face of massive and huge challenges, they built the foundation of California’s prosperity,” the Governor said, “They built the schools and universities that became the envy of the world. They built the bridges and aqueducts, the highways and hospitals that made California the economic powerhouse it is today.” And then he laid out his own plan. As pundits predicted, this year’s speech—as opposed to last year’s—was about building bridges, not burning them. The tone of his speech was unfailingly optimistic, even offering a mea culpa. “I have thought about last year and the mistakes that I have made,” he said, acknowledging that the people wanted action, not rhetoric, and cooperation, not conflict. To which he added, “To my fellow Californians, I say—message received.” So he concentrated on the future. “Let me ask you,” he posed. “What kind of California do we want in 20 or 30 years? What kind of highways will we drive on? What kind of schools will our children attend? What kind of jobs will we have? What kind of air will we breathe? What kind of hospitals will care for our sick?” He referred to the China trip he took following the November 8, 2005, special election, and the perspective that it gave him. “I was in China recently,” he said. “What a sight. Construction cranes fill the sky. Over a billion people work and save and study. Now we all know that China has enormous problems—environmental, social, political—problems much larger than ours, but they are preparing for a global future. Do we not have the same ability to think as dynamically and optimistically about our people’s future? Of course, we do. “California is already on the leading edge of a global economy that is changing and growing by leaps and bounds. And yet we will let this advantage slip from our fingers, if we don’t make the long-term investment in our ports, our roads, our schools, our information systems and all the other infrastructure required to compete in a world that thrives on innovation.” And in his typically entrepreneurial manner, he posed the big issue of the times in Wall Street terms. “Think of California as a mutual fund—in particular, a growth fund. Why do you invest in a growth fund? Because you believe in the economic future. I ask each of you . . . do you believe in California’s economic future? Then we must invest in it. If we do not invest in ourselves, how can we expect others to invest in us?” The cornerstone of the speech is an ambitious “strategic growth” infrastructure plan—one that also acknowledges the political reality of the state today by avoiding a tax increase. This plan is to address the state’s ongoing infrastructure needs, including schools, public safety, transportation, air quality, water and flood control, and justice. From his speech and related documents emerges a $222 billion comprehensive investment plan, including $68 million in General Obligation (GO) bonds, which, if approved, would be implemented over a 20-year period and completed in phases. It is the Governor’s hope that the Legislature would approve the first phase of the Plan, a 10-year installment, with the bonds considered by voters over a series of elections between 2006 and 2014. The Governor is also proposing to amend the state’s Constitution to limit the state’s debt service to 6% which is currently the generally accepted guideline for General Fund Revenue. Under this proposal, higher education stands to receive capital funding of approximately $11.7 billion, over the Governor’s 10-year plan in new state GO bonds with existing local, state, and federal funding sources utilized when possible. The intent in leveraging existing funding is to minimize the cost to the state’s General Fund. For community colleges, the University of California (UC), and the California State University (CSU), the Administration’s suggested 2006 measure proposes almost $1.5 billion in state GO bonds. The higher education bond is proposed to fulfill the commitment agreed to in the compact with UC and CSU. In addition, it provides a like amount for community colleges. Bond expenditures proposed for the budget year for each segment are as follows: • $400 million for telemedicine will be used to provide facilities and state-of-the-art equipment needed to expand UC’s medical programs • $315.4 million for the construction and renovation of 29 buildings on UC campuses • $234 million for the construction and renovation of 15 buildings on CSU campuses • $491.7 million for the construction and renovation of 58 buildings in 38 community college districts • In addition, 30 districts have committed to use $261 million in locally approved Proposition 39 funds to support their projects Note: AB 58 by Assembly Speaker Nunez proposes to place a GO bond measure on the November 2006 ballot in the amount of $9,387,000,000. Approximately $2.9 billion of the Speaker’s bond measure is earmarked for higher education. Of this amount, community colleges would receive $1,507,000,000. The UC and CSU would receive $690 million each. There were few details on education initiatives or on the operating budget for education. The Governor’s only reference to higher education was his proposal to eliminate any increase in student enrollment fees, thus freezing community college fees at $26 per unit for one more year. “In education,” he said, “the budget I will introduce next week will propose immediate repayment of $1.67 billion in Prop 98 money. This, in addition to an automatic budget increase of $2.3 billion, will be the largest increase in funding in education’s history. I propose that we use part of this money so that children once again can have art, music, and physical education in our schools. “Also this year, California’s Prop 49 after-school initiative kicks in, which will provide an additional $428 million for after-school programs. This will make our state the only one in the nation to offer comprehensive after-school programs. Every elementary and middle school can have a program so that working parents will know that their children will be in a safe environment—getting help with their homework, doing arts and physical activity. This will be good for both the children and the parents.” And should there be any question about his commitment to a new, bipartisan focus, the Governor closed his speech lauding the commitment shown by Democratic Senator Martha Escutia (D Whittier), who spent six years in a fight to limit junk food in schools. “It shouldn’t have to take six years to address the health of our children,” he said. “But the thing that really impressed me, was her perseverance, her stamina, her commitment, that is what was so unbelievable. “I ask you tonight to have the same perseverance, the same stamina, the same commitment, to help our children, our families, our communities, and our state.” Governor Proposes a $4 Billion Increase In Funding for Schools On January 3, 2006, Governor Arnold Schwarzenegger announced that he would be including a sizeable funding increase for schools in his 2006-07 proposed State Budget. Characterized by the Administration as the “largest investment in the quality of our schools,” Secretary for Education Alan Bersin unveiled the proposed $4 billion increase in K-14 funding, which, if approved by the Legislature, would result in total resources of more than $66 billion for education in 2006-07. While the details about the specific proposals remain sketchy—we do not anticipate learning the specifics until the release of the proposed State Budget scheduled for January 10, 2006—the following is what has been indicated by Secretary Bersin as to what will be included in the upcoming proposed budget: In addition to the normal Proposition 98 adjustments for inflation and growth totaling $1.9 billion, an additional $2.1 billion will be provided—$1.7 billion to pay down the Proposition 98 maintenance factor and $428 million to implement the Proposition 49 Before- and After-School Program. The Governor’s proposal will fully fund COLA and growth (Note: The estimated COLA factor was not provided), plus: • $133 million for prior year mandated costs The Governor is also proposing substantial financial investments in the following areas that would impact community colleges: • Career Technical Education programs. The proposed budget will include an additional $30 million for the continued expansion and improvement of vocational education courses. This funding is in addition to the $20 million increase the program received last year. The funds will continue to be administered by the community colleges. • Equalization. The Governor’s proposal would provide $200 million to K-12 for revenue limit equalization. Secretary Bersin indicated that additional equalization funds would be provided to community colleges. Although he did not specify an amount, $130 million would be needed to backfill the Governor’s initial commitment to provide $240 million over a three-year period. • Student Fees. The Governor is proposing to provide the University of California and the California State University systems with more than $100 million to offset any student fee increase in the respective institutions. The Governor indicated that community college student enrollment fees ($26 per credit unit) would remain at the same level for 2006-07. This funding increase represents much more than the anticipated increase in Proposition 98 funding most were expecting to receive. The Legislative Analyst’s Office (LAO) had estimated only a $2.2 billion increase, (after including the $428 million for Proposition 49). The estimated difference between what the LAO projected and the funding level announced by the Governor is approximately $1.8 billion. This difference is roughly the amount that was in dispute last year between the Governor and the education community after the Governor reneged on the “Deal” in 2004-05. New Laws Affecting California Community Colleges The following bills of interest to community colleges were signed into law by Governor Schwarzenegger in 2005 and became effective January 1, 2006: AB 414 (Klehs, D-San Leandro) Labor Compliance Programs: Third Party Providers This bill, relating to projects funded with state education bond funds, requires that a third party that contracts with an awarding body to initiate and enforce a labor compliance program shall not “review payroll records of its own employees and employees from its subcontractors” performing the public works project; instead, an independent third party or the awarding body must review these records. AB 967 (Canciamilla, D-Pittsburg) Concurrent Enrollment This bill provides that, if a principal recommends a pupil for enrollment in a college-level advanced scholastic or vocational community college course during a summer session, the 5% ceiling on concurrent enrollment does not apply if the course: • Is provided by a middle college high school, or early college high school • Is part of the Intersegmental General Education Transfer Curriculum • Applies towards CSU general education breadth requirements • Is an occupational course defined as high priority by the System Office and reported in the management information system This bill further requires the System Office, by January 1, 2007, and each year thereafter, to report to the Department of Finance on the number of high school pupils enrolled in summer school courses, and prohibits the inclusion of these pupils within the annual budget request of the California Community Colleges. AB 982 (Laird, D-Santa Cruz) Student Health Fees This bill allows districts the option of charging a fee (currently up to $13) for student health centers to all students, including students receiving Board of Governors fee waivers. AB 1088 (Oropeza, D-Long Beach) Mandatory Orientation This bill requires each local community college governing board to: • Include educational and preventive information about sexual violence to students as part of their established on-campus orientation; or • If a campus does not have an orientation, include the above information on its website This bill also requires community colleges to develop policies encouraging students to report any campus crimes involving sexual violence. AB 1280 (Maze, R-Visalia) California Community College Baccalaureate Partnership Program This bill, until July 1, 2014, establishes the California Community Colleges Baccalaureate Partnership Program, and authorizes the System Office to award up to two grants, not exceeding $50,000 each, if the funds are provided in the annual Budget Act, to interested applicants. Each applicant is to be composed of “at least one community college and at least one baccalaureate degree-granting institution.” This bill specifies that these funds are: • To be prioritized to applicants in areas with the lowest rates of baccalaureate degrees • To be given to applicants that demonstrate that the programs offered meet labor market • Intended for one-time “startup” costs This bill requires the System Office to submit a report to the Legislature and the Department of Finance on the program’s efficacy by April 1, 2012. AB 1366 (Lieber, D-Mountain View) College Fiscal Accountability This bill authorizes the Board of Governors to assign the Fiscal Crisis and Management Assistance Team (FCMAT) to assist a community college district with establishing and maintain sound fiscal and budgetary conditions, and to comply with principles of sound fiscal management. This bill also requires the Chancellor to report to the Board of Governors on the following: the events which led to the crisis, an action plan for remedying the deficiencies, a process for assessing district progress in correcting deficiencies, and benchmarks indicating sufficient local capacity to manage the district’s responsibilities. AB 1480 (Maze, R-Visalia) Community College Agricultural Education This bill requires the California Community Colleges Agriculture and Natural Resources Advisory Committee, with funding provided to it under the federal Carl D. Perkins Vocational and Technical Education Act (VTEA), to identify and develop quality program criteria to evaluate the effectiveness of agricultural education programs, and submit a report by June 30, 2007, to the System Office and the Legislature. AB 1492 (Evans, D-Santa Rosa) Capital Outlay: Intercept Financing This bill allows community college districts to issue lease-revenue bonds secured with general apportionment funds for the purpose of constructing energy-efficient capital outlay projects. By allowing districts to use “intercept financing” for bond repayment, districts may be able to secure lower interest rates in exchange for having the Chancellor withhold apportionments from the district and directly transfer the funds to the Controller for repayment to bondholders. SB 70 (Scott, D-Altadena) Vocational Education This bill requires the Board of Governors to assist economic and workforce regional development centers and consortia, including middle and junior high schools, high schools, and regional occupational centers and programs, to improve linkages and career-technical education pathways between high school schools and community colleges for the benefit of pupils and students in both educational systems. This bill requires the Board of Governors to ensure that elementary and secondary school educators strongly collaborate with college faculty in implementing this provision. The bill contains $20 million for these purposes. Legislature Returns to Sacramento—First Order of Business: “Two-Year Bills” The Legislature returned to Sacramento on January 4, 2006, to complete the second year of its two-year legislative cycle. During the 2005 legislative session, more than 2,700 bills were introduced by the Assembly and Senate. Legislators will have the opportunity to introduce more bills in 2006, which will likely bring the two-year total to more than 4,000. Legislation introduced in 2005 that did not pass the policy committees must be heard by January 13, 2006. The last day for any committee to hear and report to the floor bills introduced in that house is January 20, and all bills must be out of their house of origin by January 31. The last day to introduce bills is February 24. Two-year bills of interest to community colleges that must be heard by January 13 are: AB 58 (Nunez, D-Los Angeles) Kindergarten-University Public Education Facilities Bond Act of 2006 This bill is the vehicle for placing a general obligation bond for K-12 and higher education facilities before the voters in 2006. The size of the bond has not yet been finalized. The bill is scheduled for hearing in the Assembly Education Committee on January 11. AB 1286 (Evans, D-Santa Rosa) Community College Facilities Existing law authorizes the governing board of any community college district to sell or lease, under specified conditions, real property that the district owns. This bill would require the authorization to have precedence over other expenditure obligations of the district, except for any obligations the community college district has incurred through the State Public Works Board’s issuance of lease revenue bonds under specified provisions of existing law, which shall be met first. The bill is scheduled for hearing in the Assembly Higher Education Committee on January 12. AB 1319 (Cogdill, R-Modesto) Community College Fees This bill would establish the Community College Enrollment Fee Reimbursement Program under the administration of the Student Aid Commission. Under the program, the Commission would reimburse a person for the amount that he or she paid for enrollment fees for up to 35 semester units, or the equivalent number of quarter units, at any campus or combination of campuses of the community college system if that person earns at least 60, but no more than 72, semester units, or the equivalent of quarter units, and that person earns a bachelor’s degree at any campus of the University of California or the California State University within seven years of the date that person enrolled at a community college campus. This bill is scheduled for hearing in the Assembly Higher Education Committee on January 12. AB 1399 (Garcia, R-Cathedral City) Student Financial Aid This bill would express the intent of the Legislature to enact legislation to ensure that any child of a member of the armed forces of the United States or the California National Guard who serves at any time between September 11, 2001, and the end of the conflict in Iraq, is eligible to receive a Cal Grant award. This bill is scheduled for hearing in the Assembly Higher Education Committee on January 12. AB 1482 (Canciamilla, D-Pittsburg) School District Bonds This bill would require a K-14 district governing board, prior to selling bonds, to adopt a resolution as an agenda item at a public meeting that includes several specified items, including, among other things, express approval of the method of sale selected. This bill is scheduled for hearing in the Assembly Education Committee on January 11. SB 55 (Lowenthal, D-Long Beach) Governing Boards: Meeting Agendas This bill would require that, when the presiding officer of a local Academic Senate notifies, in writing, the executive officer of a community college district governing board that a motion of no confidence has been adopted by that Academic Senate with respect to a campus or district administrator of that district, the executive officer of the governing board shall cause the matter to be placed on the agenda of the next meeting of the governing board. This bill is scheduled for hearing in the Senate Education Committee on January 11. Note: SB 361 (Scott, D-Altadena), the system’s proposed new funding formula legislation, is a two-year bill and is currently in the Assembly Appropriations Committee. Since the bill has passed its house of origin, the deadline for a hearing is not until May 26. Is Community College Enrollment Funding Keeping Pace With Demand? A recent report by the Legislative Analyst’s Office (LAO) indicates that community college student enrollments are not keeping pace with funding for student growth. Funding for student enrollment at the California Community Colleges (3% for 2005-06) has grown faster than the college-age population (1.5% for growth in 18 to 24 year-old population). According to the LAO, in four of the past five years, community colleges received more funding for enrollment growth than it used to enroll additional students. In the past two years, community college enrollments have actually declined. The most obvious reason for the decline in enrollments is the significant increases in student fees (rising from $13 to $26 per credit unit over the pass four years). Also, a decline in class offerings has led to reduced enrollments. The LAO report indicates that no “unfunded” enrollment remains. Over the years, some community colleges occasionally enrolled more students than they were funded to serve, commonly referred to as “over-cap” students. Some colleges occasionally enrolled fewer students than they were funded to serve. In 2001-02, total unfunded enrollment statewide was about 35,500 full-time equivalent students (or about 3.5% of total enrollment). With enrollment growth funding exceeding new enrollment in recent years, unfunded enrollment was eliminated for all districts in 2004-05 according to the Chancellor’s Office. As noted, the 2005-06 Budget funds enrollment growth of 3%. This is about twice the expected rate of growth for the college-age population, and is projected to support all enrollments. The Chancellor’s Office is requesting 4% for growth funding in the 2006-07 Budget. It is not likely the Administration will fund growth at that amount and it could be something less than the 3% received in 2005-06. The Governor’s January 10 State Budget release will tell the tale. For a complete review of the LAO’s report on enrollment funding, visit its website at www.lao.ca.gov. Should Community Colleges Play a Role In the High School Exit Exam? Current law requires the K-12 graduating class of 2006 to pass a high school exit exam that demonstrates the students’ competency to receive a high school diploma. The state’s own independent evaluator, HumRRO (Human Resources Research Organization), reported that nearly 100,000 students in the Class of 2006—22% of the graduating class—have been unable to pass the California High School Exit Exam (CAHSEE) and will be denied a high school diploma if they cannot pass the exam this year, even it they have passed all of their classes. As a result of the concerns expressed about the high number of students that are being denied a high school diploma, public meetings on alternatives to the high school exit exam have been convened. Comments and suggestions have been made to the Superintendent of Public Instruction that recommend alternative methods in addition to CAHSEE by which students may demonstrate their ability to meet rigorous state standards and receive a diploma that reflects this accomplishment. Is There a Role for Community Colleges? The HumRRO report suggests alternatives to the CAHSEE that the state might explore, including a senior-year portfolio, summer school courses after 12th grade, a community college program, and additional years in high school. It has been pointed out that a community college program and additional years of high school are fall-back alternatives, of which only a limited number of student can and will take advantage. The HumRRO Report suggested that community college programs that currently lead to a high school diploma be updated to focus on CAHSEE skills, so that students who have been unable to pass the CAHSEE could receive a high school diploma through participation in a community college program (see the December 2, 2005, Update, page 310, “Should Community Colleges Issue High School Diplomas?”). The proposed community college alternative raises numerous concerns because it likely will serve only a small percentage of students and because of the major impact it will have on California’s underresourced community college system. For these reasons, it should be considered only in concert with other alternatives and only if it is adequately funded. Putting aside the effectiveness of a community college program as an alternative to the CAHSEE, asking community colleges to take on the role of preparing an additional 50,000 to 100,000 students a year to graduate from high school will place an enormous burden on community colleges and require an infusion of additional funding. Currently only seven community college campuses offer basic-skills classes leading to a high school diploma. Some organizations that have made comments regarding alternatives to CAHSEE believe that asking community colleges to play a central role in educating high school students is a distraction from the system’s already significant mission. The CAHSEE was created to ensure that students who receive a high school diploma actually have acquired the content and skills necessary to compete successfully in the workforce. According to the HumRRO Report, involving community colleges in this equation blurs this system of accountability and goes against the original intent of the CAHSEE legislation. Thus, the evaluators believe alternatives for students who have been unable to pass the CAHSEE should first be implemented in the high schools, not in community colleges. Community college programs, as alternatives to the CAHSEE, are appropriate for—and have the capacity for—only a small number of students. Ask Arnold... Can You Explain the Governor’s Proposal? Q. I have seen several articles about the Governor’s proposal to increase school funding in 2006-07. Some say the increase is $4 billion, while others cite $4.3 billion. Why the difference? Also, I’m seeing that some people are saying that the Governor’s proposal still leaves almost $4 billion owed to education. Can you explain that as well? A. You’re not the only one who is confused about these numbers. The $4.3 billion is the Governor’s proposed increase in total Proposition 98 funding for K-14 education. Of this, it is our understanding that about $3.7 billion is for K-12 education and $600 million is for community colleges. The Governor’s reference to a $4 billion increase is the increase in total funds for K-12 education, and those include Proposition 98 funds, federal aid, local revenues other than property taxes, and bond funds. While the Governor is proposing to augment Proposition 98 funds by almost $1.7 billion more than is required by law, he is still not fully addressing the failure to honor the “Deal” in 2004-05 that limited the impact of the suspension of Proposition 98 to $2 billion. Because state tax revenues in 2004-05 ultimately exceeded the 2004 Budget Act forecast, the Proposition 98 minimum funding level increased as well—but no further funding was provided to schools for that year. Thus, the impact of suspension was really $3.8 billion, and schools were underfunded by $1.8 billion in 2004-05. Since this shortfall is ongoing, schools are underfunded by another $1.8 billion in 2005-06 (based on current estimates) and would have been underfunded by $1.9 billion in 2006-07 had the Governor not proposed the $1.7 billion augmentation. Adding up these shortfalls yields a total of $3.8 billion still owed to schools for 2004-05 through 2006-07. In our opinion, the Governor deserves credit for funding almost all of the ongoing shortfall, starting in 2006-07. Given the LAO’s recent forecast of the state’s ongoing structural budget problem, this is a much better start to the 2006-07 budget negotiations than we had expected. But, of course, we need to see the details of the Governor’s budget proposal, which will be released on January 10, 2006, to see the whole scope of funding proposals for K-14 education. What Is the Best Way to Handle Budget Priority Discussions? Q. Our district recently established a budget advisory committee. Our first meeting is scheduled before the Governor’s Budget comes out on January 10, 2006. Since our committee involves many stakeholders with varied backgrounds, we want to have our first session focus on priority-setting methodologies. Do you have any suggestions for us regarding budget priority discussions? A. Community College districts are legally and financially dependent on the state and will always work within finite dollars. Finite dollars require judgmental decisions that, if not made locally, will inevitably be made by others. In budget priority discussions, a community college district must decide if it is more important to do “this” rather than “that”—“yes” to some and “no” to others. So here are some suggested do’s and don’ts in budget priority setting: 1. Don’t avoid having a defined process for setting expenditure priorities. Focus on a process that will work for you, but in any event, focus on a process. Commit to doing something. Don’t avoid the essential. 2. Remember that priority setting requires “either” and “or” decisions. Priority setting requires leaders who are willing to “get to no.” Priorities necessitate choice. Choice requires an ability to push some priorities “off the table.” If you can’t accept no, you can’t establish priorities. 3. The worst priority setting is that that is done in a vacuum. A “needs analysis” that is not based upon available dollars builds priorities on a foundation of nonreality. It will lead to dashed hopes and a resulting loss of faith in the priority-setting process. Always force district decisions to be made within a circumference of financial reality. 4. The second-worst priority system is one that identifies a part of the budget as being completely sacrificed in order to cover everybody else’s priorities. Consider the district that routinely proposes “no salary increase” from the district’s revenue increase because of “program demands.” The lack of realism leads to an inappropriate priority process. Most likely, if there were a real revenue increase, the district would spend dollars for top priorities—including funding faculty and staff salary increases. 5. Priority setting requires that all services of the district potentially be on the table. To exclude “all instructional services” or “all classroom services,” as an example, avoids an analysis of critical issues. To entirely exclude instructional/classroom services eliminates at least 50% of the agenda. 6. Build priorities based on knowledge—force information, if you must, out of others so that those making the decisions become knowledgeable regarding priority issues. Don’t establish priorities without doing your homework. 7. Recognize that the biggest impediment to priority setting, if you are not careful, is an employee contract. Avoid “no layoff” clauses, prohibitions on contracting out, and excessive controls on transfer, evaluation, or hours of employment. This gives you an opportunity to represent the public rather than a single interest group. Don’t hogtie yourself or future boards through carelessness in negotiations. 8. Recognize that the best priority setting does not simply build on “what is.” True priority setting must consider future needs as well as current needs. You must be willing to challenge “what is” in order to be able to establish valid priorities. If you are not willing to challenge what is, and you only prioritize the marginal dollar, you are prioritizing peanuts, when you could be prioritizing the elephant. Remember, if you really intend to make a difference, you have to determine priorities. If you do not determine the priorities, they will be determined for you. Is Not Being the Right “Fit” a Valid Reason for Not Being Hired? Q. I have been a candidate for two Chief Business Official (CBO) openings recently. Both times I progressed to the second round of interviews only to lose out to another candidate. In both instances, the district indicated that the successful candidate was a better “fit.” Was their explanation an easy way out for not telling me the real reasons I wasn’t selected, or is not being the right “fit” a valid response? A. Thanks for a great question. As in all matters involving the building of an effective leadership team, the ability of a candidate to complement the skills of the other team members is very important. We generally find that the district is looking for some very specific skills and talents when adding such an important member to the leadership team. We go to great lengths to communicate the particular skills that may be critical in each position for which we recruit. The perfect CBO for a given district will have the right combination of interpersonal and technical skills, but will also have strengths that match the most urgent needs of that particular district. From the moment we begin to develop the brochure and advertising materials until the final selection is approved by the board our goal is to find the best possible match for both the candidate and the district. Not all candidates are appropriate for all districts; nor are all districts appropriate for all candidates. A large part of the search and interview process is to find candidates who match the needs and personality of a district. All of the candidates who make it through the initial paper screening and are invited to a first-round interview meet the basic qualifications for the job. All of the candidates who do well in the first-round interview and are invited back for a second-round interview could, in our opinion, do the job. By the time we are down to a small number of finalists, all of whom could do the CBO job successfully in some districts, we are looking for the candidate with the best probability of success in this district. The “fit “ of the individual and how his or her skill set matches up with district needs is always a judgment call. “Fit” is a very oblique term for defining the role the candidate will need to play in a particular district. Sometimes “fit” is determined by the uniqueness of the school district. Districts, for example, will seek CBOs with selected but specialized skills in areas such as capital construction in a fast-growing district, exceptional accounting skills in a fiscally troubled district, or good business management skills in a district whose Maintenance & Operations department does not have strong leadership. A district with a quiet superintendent may want a more aggressive CBO, a strong board may want an analytical CBO, or a labor-troubled district may want a CBO who can work well with unions; a large district may value management skills more and a smaller one technical skills more. All of these conditions are elements of a good fit. The best “fit” is probably the number one characteristic distinguishing between the first- and the second-ranked candidates. Generally, the runner-up candidate was just as qualified and just as capable as the candidate selected, but the superintendent or governing board concluded that the “fit” just wasn’t right. So yes, we believe that the other candidate being a better “fit” is a valid response. In the long run, you are much better off in a district that fits your personality and talents. We care as much about the long-term success of the candidates as we do about the long-term success of the district. Only when we have the best possible match, or “fit” do we give both parties the highest probability of success. Did a Court Reject the Lawsuit Over Breaking the “Deal”? Q. I read in the Sacramento Bee that a court rejected the arguments in the lawsuit over the underfunding of Proposition 98. Does this mean that the lawsuit is dead? A. No. The lawsuit—officially known as California Teachers Association and O’Connell v. Schwarzenegger is not at all dead. According to the Law Firm of Remcho, Johanson and Purcell, which filed the suit, the writer in the Sacramento Bee misunderstood the judge’s recent action. In the court action signed December 12, 2005, Judge O’Hanesian granted what is called a “demurrer” on the complaint, but with leave to amend within 20 days. The judge explicitly stated that she was not deciding against the merits of the claims, but rather wanted the plaintiff’s attorneys to spell out in more detail the Governor’s duty to recalculate the Proposition 98 minimum guarantee during the course of a fiscal year. The plaintiff’s attorneys have done that in an amended complaint that will be filed soon. So the case is alive and well, but there is no timeline set for when the hearing on the merits of the case will be. By the Way . . . The Community College Governance and Funding Stabilization and Student Fee Reduction Act Submitted to the Office of the Attorney General for Certification. The community college funding and governance initiative has been submitted to the Attorney General for the purpose of preparing a title and summary of the proposed measure. Once certified by the Attorney General’s office for circulation, sponsors may begin the signature- gathering process. More than 598,000 qualified signatures will need to be collected for the November 2006 ballot. As you are aware, the initiative would create a separate “pot” of Proposition 98 funds for community colleges. Student enrollment fees would be reduced from $26 per unit to $20 and the System Office would have greater autonomy pertaining to employee hiring and governance. Note: the initiative includes expanding the Board of Governors membership from its current level of 12 members to 19 voting members. Local trustee members would be increased from two to three; faculty representatives would be increased from two to three, and classified employee representatives would be increased from one to two. In addition, the two student members to the board would have voting privileges. Reminder on Grace Period for Flexible Spending Arrangements. Last May, the Internal Revenue Service issued a notice (2005-42) that gave employers the option of amending their flexible spending arrangements (FSAs) to adopt the longer grace period. This new grace period runs 2½ months, through March 15 of each year. All employers must have amended their plans by the end of 2005 (assuming calendar year plans) in order to provide this additional grace period. For employers who have amended their plans accordingly, unused FSA funds at the end of 2005 can now be carried over into 2006, and employees can apply those funds to expenses incurred through March 15, 2006. Governor Appoints Two to the Commission on State Mandates. The Governor recently appointed Steve Worthley, who currently serves as a Tulare County supervisor, and Sarah Olsen of Manhattan Beach, who has served as staff director and principal consultant for Republican Fiscal Consultants in the California State Assembly from 1995 to 1999, to the Commission on State Mandates. A fifth generation native Tulare County resident, Worthley is a lawyer maintaining a private practice and has worked as counsel for Sequoia Forest Industries. He has experience in public education, having been a member and past president of the Dinuba Elementary School Board. Olsen worked as a policy and fiscal analyst for the Office of Legislative Analyst for 12 years before taking the job in the Assembly. She will fill the public member seat on the Commission.

posted by Susan Bray on January 10, 2006 02:24 AM

UNDER THE DOME - December 16, 2005 State Revenues Continue to Outpace Projections For the seventh straight month, state General Fund revenues have outperformed the projections upon which the current year budget is based. Through November, collections total $2.4 billion more than expected ($550 million in 2004-05 and $1.9 billion in 2005-06). For the month of November alone, collections exceeded the monthly projection by $145 million, or 2.8%. The Department of Finance reports that current-year collections are running 6.3% above estimate, with the greatest strength coming from the corporation tax (up almost 25%), followed by the personal income tax (up 6.2%) and the sales and use tax (up 2.6%). A strong showing in corporate profits related to the summer’s high fuel prices has been identified as one of the principal reasons for the strength in the corporate tax. To put the latest information into context, the Legislative Analyst recently projected that total state General Fund revenues for 2004-05 and 2005-06 would exceed the 2005 Budget Act forecast by $3.9 billion. Thus, the state has already collected 60% of the Legislative Analyst’s projected increase, with seven months of the fiscal year remaining, including the major collection months of December, January, and April. If the state economy continues to produce revenues at a pace that exceeds expectations, the state’s structural budget problem would be reduced, although not completely eliminated. We hope that this development, coupled with the Administration’s interpretation of the results of the special election, will produce a January Governor’s Budget that treats education more favorably than last year. Chancellor’s Office Reports on Impact of Fee Increases and System Budget on Enrollment In a just released report, the Chancellor’s Office concludes that recent fee increases and system funding reductions have a direct and significant affect on enrollment levels. The 2003-04 State Budget included an enrollment fee increase of $7 per unit (from $11/unit to $18/unit), and the 2004-05 State Budget included an additional increase of $8/unit (from $18/unit to $26/unit). This latest fee increase included a requirement for the Chancellor’s Office to provide a report to the Legislature on the impact of the student fee increase on enrollment. The report addresses the impacts of both of the recent fee increases as well as the level of state funding provided the system because, as the report concludes, both factors affect the number of students who access the system. For example, the fee increase to $18 per unit occurred when state support for the system was either flat or declining, resulting in a significant drop in student enrollment. The fee increase to $26 per unit occurred during a year when the system’s budget was increased. Because the increases in fees and the level of system funding have not occurred independently, it is difficult to assess their individual impact on student access. Some of the major conclusions of the report are: • Student headcount and full-time equivalent students (FTES) continued to fall even with the system budget increase for 2004-05 • Student headcount is significantly below what was projected before the fee increases • The curricular areas suffering the greatest losses in FTES were: physical education information technology and related art music • The drop in physical education enrollment from special admit (K-12) students accounts for over 100,000 of the 314,000 lost headcount • The curricular areas showing the greatest increases in FTES during the same time period included:  real estate  industrial technology  fire technology  culinary arts  radiologic technology  prerequisites to allied health sciences • Over the same period the gender distribution of the student population changed very little, and the distribution of student ethnicity changed in a similar pattern to prior terms • There has been a marked increase in the percentage of younger students (ages 18-24) and a significant decrease in students of age 30 and over, as well as an increase in the percentage of students with “degree, certificate, or transfer-seeking” as their stated goal. Of the first-time and returning students, the system has seen a significant drop in the percentage that are of age 25 and over. • For the last two years, there has been a significant decline in the number of first-time students, and a smaller but related decrease in the number of continuing students. • Over the same time period, there has been an increase in the number of returning students • Student retention rates have increased, but no associated increase in student success rates is shown To view the contents of the full report, go to the Chancellor’s Office web site: http://www.cccco.edu/divisions/tris/rp/reports.htm Community College Transfer Students May Lose Their Financial Aid Entitlement The California Student Aid Commission, which administers the state’s financial aid program for higher education students, has sent letters to 1,000 students telling them their Cal Grant award has been withdrawn because they were not residents of California when they graduated from high school. These students could have their education placed on hold or be saddled with debt because the state apparently made a mistake in awarding them financial aid. The affected students are largely students from community colleges who transferred to four-year higher education institutions under the California Community College Transfer Entitlement Program. According to Diana Fuentes-Michel, executive director of the Student Aid Commission, approximately 300 of the 1,000 students are currently enrolled in colleges and universities around the state and will lose their Cal Grants if they cannot verify that they resided in California at the time of their high school graduation. The remaining 700, who have either graduated, dropped out, or otherwise moved on, might have to repay the state, she said. Ms. Fuentes-Michel indicated that, unfortunately, the law is clear. The Commission must recover the money unless directed by the Governor’s Office or the Legislature to do otherwise. The questions that have been raised include: Do they want to offer forgiveness to these students? Do they want to treat these grants now like they are loans? The Commission has sent a form to the affected students asking them to verify—under penalty of perjury—whether they were state residents when they graduated from high school. They have until the end of December 2005 to respond. State legislators have been informed about the mistake and are now considering urgency legislation that would hold the student harmless. If such legislation is drafted, it could not be acted upon until the Legislature returns to Sacramento in January 2006. According to legislative staff, it is not the fault of the students. Research indicates that the students could not have known that residency at the time of high school graduation was required. The only place that such a requirement is spelled out is in the Education Code. Apparently the Cal Grant application forms do not stipulate residency requirements at the time of high school graduation. It’s unclear why the Student Aid Commission did not verify on its own whether applicants met the residency requirement. The students were California residents at the time they applied for the Cal Grants and there’s no question that they were financially needy, according to Ms. Fuentes-Michel. The Commission requires that students complete the federal Free Application for Federal Student Aid (FAFSA) when they apply and provide verification of their community college grade point average. The FAFSA does not ask if students were California residents when they graduated from high school. This appears to be the state’s mistake. The students should not be penalized as a result of that mistake. Hopefully the Legislature will move swiftly in January to amend the Education Code to hold these students harmless. STRS Faces Fiscal and Policy Challenges With a $24.2 billion pension fund shortage looming, trustees at the State Teachers’ Retirement System (STRS) are facing some challenging choices aimed at cutting costs and raising revenue. In the next two months, STRS officials will meet with school districts, teachers’ groups, and state representatives to flesh out the issues and begin zeroing in on a specific strategy. The fund will have enough assets to cover benefits for some 60 years if nothing is done, and even if it doesn’t, the state guarantees that all obligations will be met. Trustees are calling for further analysis by actuaries and feedback from outside groups. Eighteen months ago, trustees learned a string of stock market losses and sub-par investment returns had left the fund billions of dollars short to cover benefits paid to retirees over the long run. A second actuarial study put the shortfall at $24.2 billion. As of June 30, 2004, STRS had enough assets to cover 83% of future benefits. According to Ed Derman, STRS Deputy Chief Executive Officer, “This is a problem that dramatically escalates, if we do nothing, it’s going to get progressively worse.” If trustees don’t tackle the issue, the gap could soar to $212 billion in the next three decades. STRS isn’t alone with a shortfall. Nationwide, about 80% of major public pensions are underfunded, according to a survey by Wilshire Associates, a Los Angeles investment consulting firm. To tackle funding gaps, some funds, such as the California Public Employees’ Retirement System (PERS) have raised employer contributions. Others have issued pension obligation bonds. Some states, such as Colorado and South Dakota, have limited benefits. At STRS, one option is eliminating a 2% cost-of-living adjustment, a change that would affect all current and future retired teachers. The fund estimates the cut would wipe out a $93 boost in monthly pension checks for the average teacher. Major benefit changes, however, are likely to meet resistance from teachers’ groups. Unlike PERS, the teachers’ retirement board has no authority to increase state or school district contributions or unilaterally slash most benefit programs. The Legislature must approve any changes. Currently, teachers contribute 8% of their pay to their pension, while K-14 school districts pay 8.25% of payroll and the state pays about 2%. Options that STRS May Consider: STRS trustees are considering a number of proposals to help meet a $24.2 billion unfunded liability in the future. Most benefit changes would apply to newly hired teachers and the effects are based upon an average per retired teacher. The options include: • Pension obligation bonds. Trustees must figure out whether the state can sell these bonds without voter approval. Local school districts could issue the bonds and use the proceeds to cover any future increases in pension contributions. • Increase the amortization period up to 40 years, from the current 30 years. While this reduces the annual costs, the overall bill to provide benefits would be larger. • Base pensions on the highest compensation over three straight years, rather than 12 consecutive months. This would reduce monthly benefits by $134. • Take out a career factor used to calculate benefits, which would result in a loss of $378 a month in benefits for each affected teacher. • Reduce age calculations for teachers who are 60 years old and older, which would result in a loss of $504 a month in benefits for each affected teacher. • No longer allow unused sick leave in the retirement formula, which would cut benefits by $146 a month for each teacher. • Drop a 2% teacher contribution for the supplement benefit, which would drop benefits by $81 a month for each teacher. • Reduce or drop the employer contribution to the supplemental benefit for teachers working extra duties, a cut of $54 month for each affected teacher. • Don’t extend Medicare premium payments for teachers who retire after July 1, 2006. This would increase each teacher’s health costs by $393 a month. • Impose an employer contribution for teachers who work after retirement. The total annual cost to districts would be $15 million. STRS Board Votes to Oppose Dual Pension Plans A divided State Teachers’ Retirement Board went on record at its December board meeting to oppose legislation aimed at creating a hybrid retirement plan for government workers. For the second time this year, STRS trustees targeted an overhaul measure by Assembly Member Keith Richman (R-Northridge). His latest plan calls for creating a hybrid pension system that opponents argue could lead to administrative headaches for hundreds of school districts and create a divisive two-tier retirement program for teachers. Specifically, this measure, ACA 23, would establish the California Public Employee Defined Contribution and Hybrid Plans. The measure would provide that, on and after July 1, 2007, any person hired by a public agency shall enroll only in a hybrid plan or in a defined contribution plan, and is prohibited from enrolling in a defined benefit plan. The measure would permit an active member of a defined benefit plan, during a specified period, to transfer a sum equal to the member’s interest in the defined benefit plan to a defined contribution plan or hybrid plan. Six trustees voted to oppose ACA 23, while five abstained, including four appointees of Governor Schwarzenegger, who said they were not prepared to consider the issue. During the last legislative session, legislators and the Governor proposed replacing the current guaranteed pension plan with 401(k)-style private accounts. This proposal was opposed by labor unions, and, as a result, the Governor backed off and vowed to renew his plan this coming year. The pension issue has wreaked havoc with the 12-member STRS board. After a similar vote earlier this year, the Governor removed four appointees who voted to oppose the initial pension proposal. In a political payback, the Democrat-led state Senate rejected the nomination of the Governor’s fifth STRS appointee. Lawsuit Alleges Unfair Assessment of Nonresident Tuition by Higher Education A former congressman has filed a class action lawsuit challenging the California state law that allows undocumented immigrants to pay resident tuition and fees at public colleges and universities in the state. AB 540 (Chapter 814/2001) allows undocumented immigrants who meet certain criteria to be exempt from paying nonresident tuition at California’s public colleges and universities. These students must have attended high school in California for three or more years, graduated from a California high school or attained the equivalent, and filed an affidavit stating that they are in the process of legalizing their immigration status or will be filing an application to do so whenever they are eligible under federal law. When his term ended in 2001, Former Representative Brian Bilbray (R-San Diego) moved back to California but allowed his two children to stay in Virginia to finish high school. When his children came back to California to attend college, they were required to pay nonresident rates for tuition and fees—as compared with an undocumented immigrant who meets the criteria and is exempt from nonresident tuition. Therefore, the lawsuit alleges that AB 540 violates a federal statute mandating that any state offering resident tuition to illegal immigrants must offer it to all out-of-state students as well. Ralph Black, attorney from the Chancellor’s Office, has stated that AB 540 was reviewed by the Attorney General and Legislative Counsel before it became law, and no violation of federal law was found at that time. The lawsuit was filed against the University of California, California State University, and California Community College systems on behalf of 42 nonresident students and their parents from 19 states, and could potentially affect 60,000 students. If the plaintiffs prevail, damages could be up to $70,000 to $305,000 per student, depending on which college system collected the nonresident tuition and fees. Ask Arnold... How Much Information is a College Required to Give Students and Staff Regarding Violence on Campus? Q. Unfortunately, my college has experienced a number of assaults on students while on campus. I know that we are required to take precautions and keep students and staff informed about being safe. Are there any other legal requirements regarding campus safety that I should be aware of? A. Thanks for the question. Over the past few years a number of new laws have been in place dealing with registered sex offenders attending institutions of higher education and the responsibility of colleges to keep students and staff informed. This year, AB 1088 was signed into law, effective January 1, 2006 (Chapter 647/2005). The new law requires community college districts and other public postsecondary education institutions to provide written protocols to ensure that students, faculty, and staff who are victims of sexual assault on grounds maintained by the institution receive treatment and information. Additionally, colleges are required to provide educational preventive information about sexual violence to students at all campuses. Each campus of the community colleges is required to post sexual violence prevention and education information on the campus website. In addition, colleges are requested to encourage students to report crimes of sexual violence to campus authorities and urge campuses to eliminate barriers for victims who come forward to report sexual assaults, including exempting the victim from campus sanctions for substance abuse.

posted by Susan Bray on December 20, 2005 07:35 PM

UNDER THE DOME -- DECEMBER 8, 2005 LAO Forecasts a Less Dire—But Still Dicey—Budget Outlook Due to a combination of a revenue upturn and reduced spending, Legislative Analyst Elizabeth Hill writes in a November 16, 2005, report that California’s budget outlook for 2006-07 has “improved significantly” but “still faces major operating deficits in the next several years.” “We’re not out of the woods yet,” Hill later told a group of Capitol reporters. This forecast—the annually produced “California’s Fiscal Outlook”—is the first real peek at the fiscal context for the 2006-07 California State Budget, and not only is it the earliest, it is also widely hailed as being the most objective and accurate. (The entire report is available online at: http://www.lao.ca.gov/2005/fiscal_outlook/fiscal_outlook_05.pdf.) For schools, the most significant short-term projection is that the natural increase in the Proposition 98 minimum guarantee (3.6%) will be insufficient by more than $700 million to fund $2.5 billion in “base” costs for COLA and growth. While statewide ADA is actually projected to decline by 0.1% in 2006-07, the statutory COLA for 2006-07 is now projected at 5.2%. This doesn’t include an additional $428 million in revenues and expenditures for Proposition 49, an initiative passed by the voters in 2002. By contrast, the long-term projection for Proposition 98 funding is far better. State Budget Overview The 2005-06 fiscal year will wind up, according to the Legislative Analyst’s Office (LAO), with State Budget reserves of a projected $5.2 billion, nearly $4 billion more than was projected at the time the Budget was adopted. (Of this, $1 billion is attributable to 2004-05 and prior years and $2.8 billion to 2005-06). This surplus would be enough to balance out the projected $4 billion operating shortfall for 2006-07, even without any new taxes or increased revenue projections due to a strengthened economy. On the downside, the LAO still projects “multibillion dollar” operating deficits down the road through 2009-10, and warns that those numbers could skyrocket if the economy stumbles with a downturn or even a “sharp slowdown.” Proposition 98 Details The LAO projects that current year total funding for Proposition 98 will drop about $150 million due to a decrease below budgeted levels in K-12 attendance. Additionally, an increase in local property taxes dedicated to schools, decreases the state’s General Fund obligation by another $225 million. The LAO also projects that the Proposition 98 minimum funding level will increase due to state General Fund revenue increases generating maintenance factor repayments. However, since Proposition 98 was originally “overappropriated” this year by $741 million, the increased funding minimum will not result in any actual increase in the current year for school funding under Proposition 98. (The LAO projects that the budgeted Proposition 98 appropriations for 2005-06 will still be $65 million above the minimum guarantee after taking all adjustments into account.) Budget Year and Beyond Through 2010-11, the LAO projects an average annual increase in the Proposition 98 minimum guarantee of 5.7% (compared to a 5.4% increase in overall state spending). But this increase is concentrated in the last three years, which show an average 6.4% annual increase. The 2006-07 Proposition 98 minimum guarantee reflects an increase of 4.4%, from $49.9 billion to $52 billion. Of that, 0.8% is due to increased funding—and payment obligations—under Proposition 49 . In out years, the LAO forecasts an increase of 5.0% in 2007-08, 6.6% in 2008-09, 7.0% in 2009-10, and 6.7% in 2010-11. This would be more than sufficient to fund “the base” (growth and COLA) for every year but 2006-07. In 2007-08, the LAO projects that an additional $867 million would be available above growth and COLA, with that amount jumping to $2.1 billion in 2008-09, $2.5 billion in 2009-10, and $2.7 billion in 2010-11. Why the sudden jump in 2008-09? Somewhat surprisingly, the LAO projects that Test One (which hasn’t been operative since the very first year of Proposition 98) will kick in again beginning in that year. This is partially due to the slowdown of the state’s enrollment growth. (The Test One minimum guarantee is based merely on a flat share of the State Budget, and it isn’t increased to account for student enrollment growth, as is Test Two and Test Three.) But also significant is the impact of Proposition 1A and the “triple flip,” which will increase Test One’s minimum share of the State Budget from 34.5% in 2003-04 to 41.6% in 2006-07. Since the Test One share excludes the state’s rapidly increasing property tax revenues, the LAO projects that it will provide strong revenue growth to Proposition 98. It is important to note that all of the LAO projections—particularly regarding Proposition 98—are based on current funding levels and do not predict any funding above the Proposition 98 minimum guarantee. And this may not be the case by the time the State Budget is inked. Given the inability in 2006-07 for the minimum guarantee to provide for even mere growth and COLA, and given the drubbing given to Proposition 76 by a pro-education electorate just one week ago, an appropriation above the minimum is certainly possible in 2006-07. In fact, Sacramento Bee reporter Gary Delsohn reported last week: “Schwarzenegger said he told legislative leaders at a meeting earlier: ‘We should try everything we can to give education as much money as possible, and we just have to find the revenues.’" Should an overappropriation occur, any amount above the minimum guarantee will be built into the base and will affect out-year amounts, possibly delaying the onset of Test One’s application. But what is new in this projection is that any augmentations would be overshadowed by the funding provided under Test 1. This is the main reason why the LAO actually offers overappropriation above the minimum level as a legislative option for 2006-07. However, until Test One territory is reached, Proposition 98 is also extremely sensitive to state revenues as they factor into the repayment schedule for the maintenance factor obligation during Test Two years, which the LAO projects will be in play from now until Test One kicks in. These revenues could be at risk because of rising interest rates, high energy costs, and even accounting vagaries regarding tax amnesty dollars and in which years they should be accrued. Additionally, the LAO believes that legislative action will be required to re-bench the Test One formula subsequent to Proposition 1A. And even after Test 1 applies, Proposition 98 funding would still be sensitive to state economic changes, since we would get a fixed share of the State Budget pie —a pie that still depends on the level of state tax revenues. Questions Regarding the LAO Report [Editor’s Note: In the wake of the Legislative Analyst’s Office (LAO) report “California’s Fiscal Outlook—2005-06 through 2010-11” released on Wednesday, November 16, 2005, a number of questions have arisen.] Q1. Now that the LAO projects a statutory COLA of 5.2% for 2005-06, should we use that COLA for our planning for 2006-07? A1. No, for three reasons. First, as the LAO report notes, the jump in the statutory COLA is largely the result of the spike in energy prices. With the recent moderation of gas prices, we wouldn’t be surprised to see the statutory COLA come in at less than 5.2%. Remember that the index used for the statutory COLA reflects price changes for the 12-month period ending March 31, 2006 (ref. Education Code Section 42238.1), so there are still several months to see changes to this index. Second, the LAO notes that the statutory COLA is based on a national measure of price changes for state and local government—and this year, that index may overstate government price changes in California. (We sure hope the Legislature doesn’t act on this information.) Third, even if the final COLA is 5.2%, it may not be fully funded, given the LAO’s forecast that the growth in Proposition 98 funding for 2006-07 would be insufficient to fund COLA and growth. So, our suggestion is to hold tight for now at the 4.4% COLA we’ve predicted on our Dartboard, but to keep an eye peeled for the number floated in the Governor’s Budget on January 10—less than two months from now. Q2. Assuming that the LAO forecast of both Proposition 98 funding and the statutory COLA are accurate, will this lead to the 5.2% COLA applying—but being offset in part by a bigger deficit? A2. Not necessarily. The LAO forecast indicates that the growth in Proposition 98 funding, starting in 2007-08, will be more than sufficient to fund COLA and growth. As a result, the LAO reports that it may make sense to use one-time monies to fund the COLA in 2005-06 even though that is an ongoing cost. Among the options that the LAO lists are: • Using Proposition 98 settle-up dollars from prior years—that is, funds owed under the Proposition 98 minimum funding level for 2003-04 and several prior years. This is money the state must appropriate anyway. A major advantage to using this approach from the state’s perspective is that it would not increase Proposition 98 funding for 2006-07 that is carried into the future. In total, more than $1 billion is owed to schools for prior years. • Using Reversion Account funds—that is, funds appropriated under Proposition 98 in a prior year that were not used. Typically, several hundred million dollars per year in Reversion Account funds are available. Q3. In a recent Update article, you wrote that schools probably wouldn’t get more in 2005-06, even though state tax revenues were up $1.8 billion over prior budget estimates. Now that the Legislative Analyst’s Office forecasts a jump in state taxes of almost $4 billion, won’t schools get more in 2005-06? A3. As described in our prior article “Ask SSC . . . Will the $1.8 Billion in New State Revenue Trigger Higher Funding for Schools” (see the November 10, 2005, Update, page 295), we noted that the critical factor for determining new funding for schools is the growth in state tax revenues from one year to the next. According to the LAO’s forecast, while total state tax revenues are now projected to be up about $3.8 billion over earlier budget estimates, the LAO attributes $1.0 billion to 2004-05 and $2.8 billion to 2005-06. This allocation between fiscal years is important, since more than $1.0 billion of the new money from 2005-06 is needed to “keep pace” with the increased revenue for 2004-05. Taking the projection of $3.8 billion in new revenues into account, the LAO estimates that the 2005 Budget Act appropriation for K-14 school agencies—which was calculated to be $741 million more than the Proposition 98 minimum funding level when the 2005-06 State Budget was adopted—is now only $65 million more than the minimum But the LAO also acknowledged that if as little as $200 million of the $1 billion in additional state revenue assumed to apply to 2004-05 is recorded, instead, as 2005-06 state income, then the Proposition 98 minimum funding level would be higher than the amount already appropriated, and “the state would face a large Proposition 98 settle-up obligation in the current year and added base spending for future years.” While the LAO report did not specify an amount, we estimate that, under the scenario of a $200 million shift in taxes between 2004-05 and 2005-06, the settle-up obligation would be between $100 million and $150 million. Q4. Why is the LAO now projecting no State Budget shortfall for 2006-07, but a return to shortfalls starting in 2007-08? A4. It is important to recognize that the LAO is still projecting a State Budget structural unbalance of about $4.0 billion in 2006-07—that is, 2006-07 state expenditures are projected to exceed 2006-07 state revenues by $4.0 billion. But the LAO also forecasts a carryover balance of $5.2 billion from 2005-06, which is enough to cover this shortfall. Thus, the LAO continues to forecast operating shortfalls for 2006-07 and subsequent years. The burst in revenue in the current year, however, requires some explanation. There are many factors that seem to be in play, but two of the main factors are: • Much of the recent increase in state tax revenues over prior budget estimates appears to be one-time in nature, and are the result of rapid appreciation in home prices, taxes on oil companies, and capital gains from the stock market, none of which are likely to continue into the future. One press report quoted Ted Gibson, a former chief economist for the state Department of Finance, referring to the “Google Effect,” meaning that the capital gains from the stock of that one company alone accounted for a large portion of the unexpected state tax revenue. • The recent state tax amnesty program has generated some $3.8 billion in receipts, but only about $380 million of that amount represents a net increase in state taxes. The other $3.4 billion will either be refunded or, alternatively, only represents early payments of taxes that would have been paid anyway at a later date. Thus, the tax amnesty resulted in big increases in tax revenues now—but fewer revenues later. In short, thanks to these one-time effects, we have a lot of cash on hand, but still have a structural imbalance. As Legislative Analyst Liz Hill cautioned at her press conference on Wednesday, November 17, 2005, “We’re not out of the woods yet.” Chancellor’s Office’s 2006 State Legislative Program Prior to the start of a new legislative session, the Chancellor’s Office solicits legislative proposals from local community college districts and statewide organizations to develop its state legislative program. This year, 40 proposals were received from the field. In collaboration with a task force from the Consultation Council, the proposals were reviewed and prioritized for consideration by the Board of Governors. It is anticipated that the Board of Governors will take action on all or some of the proposals at its December 2005 Board meeting. Chancellor’s Office staff will then start the process of seeking authors as soon as the Legislature returns in January 2006. The following is a summary of the consensus proposals supported by the task force of the Consultation Council: 1. Pursue changes to relax restrictions on concurrent enrollment. The task Force recommends that we should encourage our K-12 partners to take the lead on this issue. 2. Seek legislation to reauthorize the Economic and Workforce Development Program. 3. Pursue changes to improve the facilities project plan check review process while maintaining safety standards. Explore using the “Facilities Bond Act” bill, AB 58 (Nunez, D-Los Angeles), as a vehicle for incorporating changes to the plan check review process. (A Board of Governors discussion item pending to seek legislative and fiscal relief to enable colleges to acquire resources, or provide additional flexibility for bond funds to maintain facilities.) 4. Pursue minor, technical changes to allow for the purchase of offsite facilities (buildings that substantially meet the Field Act and were constructed on or after January 1, 1998). 5. Continue to support legislation that secures the fiscal integrity of the community college system, such as the property tax backfill and a contingent appropriation. 6. Support legislative changes that support the community college system budget proposal, and defer specific budget changes to the budget task force. 7. Pursue uniform guidance to address natural disasters and special needs (details must be reviewed through the community college system process so as to maintain local authority). 8. Pursue legislation to give the community college system greater authority over regulations. 9. Legislation that appears to violate the community college system’s legislative principles should not be pursued. 10. Pursue positions on pending legislation as described in Board of Governors Standing order 317. The 2006 legislative session is the second year of the two-year legislative cycle, so all legislation introduced in 2006 must be acted upon that year. The last day for the Legislature to introduce bills is February 24, 2006. Should Community Colleges Issue High School Diplomas? Questions are being raised about the legal authority of the California Community Colleges to award high school diplomas. These questions are being asked at this time because many California high school seniors are in jeopardy of not passing an exit examination in math and English this year, thus severely handicapping their ability to receive a diploma from the high school they are attending. However, under a seldom used authority, community colleges can create basic skills programs and present such diplomas. A legal opinion obtained by the Chancellor’s Office says that community colleges need not abide by the high school exit examination requirements. “Community colleges are authorized to operate their own adult education programs, including high school diploma programs, independent of those offered by K-12 school districts,” the opinion reads. Potentially, community colleges could create second chance diploma opportunities for thousands of teenagers. Realistically, however, even if the political will exists to create a widespread safety net, the prospects would be tempered by facilities, staffing, and other limitations. The Chancellor’s Office indicates that it is aware of only seven community college districts that are currently awarding high school diplomas. Nonetheless, talks are occurring behind the scenes between officials of the California Department of Education and the community college system about academic standards and the potential expansion of such programs. A consulting firm for the California Department of Education recently cited community colleges’ high school diploma programs as one of several possibilities for serving the estimated 50,000 students who will finish the 12th grade in 2006 without passing the high school exit exam. Community colleges could launch new high school diploma programs without legislative approval, thus sidestepping potential political issues (Education Code Section 78401 authorizes community colleges to award diplomas). Money could be an obstacle, though, because basic skill courses are funded by the state at a rate much lower than traditional college classes. State Superintendent of Public Instruction, Jack O’Connell, is concerned about standards, raising the possibility that academic expectations could be too low, now or later. He was quoted as saying, “Any entity that would award a student a diploma without the knowledge and skills to back it up does a great disservice to that student.” Chancellor Drummond said he is gathering information on academic requirements from each campus that awards high school diplomas. He said he is “fairly well convinced” that their standards are solid. Legislators who have weighed in on the issue believe that community college high school diploma programs are a “huge loophole” that contradicts legislators’ intent to require passage of the exit exam before any source grants a diploma. Stay tuned—this issue will not likely go away and we could see legislation in 2006 that addresses the concerns of the Legislature regarding high school exit exams and what role, if any, community colleges should play. Board of Governors Certifies District Obligation for Full Time Faculty Hires By November 20 of each year, the Board of Governors determines whether adequate growth funds and adequate cost-of-living adjustment (COLA) funds have been provided to allow full or partial implementation of a district’s full-time faculty hiring obligations. Generally, districts must employ a specified minimum number of full-time faculty each fall term. This requirement is expressed in terms of full-time faculty equivalent positions and is commonly refered to as the full-time faculty “obligation.” In years in which the BOG determines that adequate COLA and growth funds are available for full implementation, each district’s obligation increases approximately by its percentage increase in funded full-time equivalent students (FTES) in credit courses. Current law specifies a goal of having 75% of the hours of credit instruction taught by full-time instructors. Most districts over the years have been unable to reach the 75% goal. The difficulty in attaining the 75% goal reflects, in part, the chronic underfunding of community colleges and also the specific failure of the Legislature to designate adequate amounts of funding for “program improvement.” The Chancellor’s Office budget request for 2006-07 includes $40 million to boost progress toward the 75% goal. The 2005-06 Budget Act includes $136.7 million for enrollment growth for general apportionment (a statewide average of 3% growth) and also includes $198.5 million for a general apportionment COLA of 4.23%. This appropriation fully funds the COLA called for under state law. Thus, the Chancellor’s Office analysis indicates that the 2005-06 Budget Act provides adequate growth and COLA funds for full implementation of the increases in district obligations to employ full-time faculty. Under this action, each district’s obligation would be increased by its percentage increase in funded credit FTES. Ask Arnold. . . What Is Maintenance of Effort, and How Is It Measured? Q. We are in the middle of negotiations with our teachers’ union. The union has indicated to us that it thinks that our district’s “maintenance of effort” for the unit is not very good. What do they mean by “maintenance of effort,” and how is it measured? A. In its simplest form, maintenance of effort means that what you are offering in compensation and working conditions will allow you to maintain relative comparability over time. The Educational Employment Relations Act requires that factfinding panels consider a “comparison of the wages, hours, and conditions of employment of the employees involved in the factfinding proceeding with the wages, hours, and conditions of employment of other employees performing similar services and with other employees generally in public school employment in comparable communities.” There are many ways to demonstrate your effort to a specific bargaining unit. A percentage of expenditure budget allocated to a specific bargaining unit is one way. Showing that the percentage allocated to that unit has remained constant or has increased over time can be compelling. In addition, comparing your percentage to your neighbors’ or to the statewide average can demonstrate your effort toward that unit. Another way is to lay out the salary increases given over a set number of years, along with step and column and health benefit increases, compared to the same information from neighboring districts that are in comparable communities. If your total over that period of time is in the mid range of the comparable districts or higher, you could argue that you have maintained your effort. In addition, including other working conditions, like class size or extra preparation periods, is appropriate if you are providing extra effort in areas other than salary and benefits. Yet another way is to compare your total compensation ranking at the beginning of a time span to your total compensation ranking today. If you have maintained or improved your relative position or ranking over the time span, you can again argue that you have maintained your effort. Maintenance of effort is not the same as comparability. A district could be ranked near the bottom of the salary rankings, but if it is now giving higher raises or spending a greater share of its budget in the bargaining unit, it could have greater maintenance of effort and still have low salaries. Like many aspects of negotiations, demonstrating your maintenance of effort to specific bargaining units is not a science and there are many ways to do it. However, demonstrating it in a way that is reasonably explained and that the bargaining teams or a reasonable third-party can understand is the best way. By the Way . . . New Community College Board of Governors Member Appointed. The Governor has appointed Porterville resident Gary Reed to the California Community College Board of Governors. Mr. Reed has been a partner in the investment management firm of Reed, Shoemaker, and Brookshire since 1993. He previously served as chief of staff to former Assembly Member Bill Jones from 1991 to 1992, and as a Tulare County Supervisor from 1988 to 1990. He is a member of the California State University, Bakersfield Advisory Board, the Porterville Chamber of Commerce, and the Porterville Education Foundation. Senate Confirmation will begin when the Legislature returns to Sacramento in January 2006. Commission Reaffirms Vote to Terminate Compton College’s Accreditation. The Accrediting Commission for Community and Junior Colleges has reaffirmed its June 2005 decision to terminate Compton Community College’s accredited status. State Chancellor Mark Drummond expressed disappointment over the Commission’s finding, citing the improvements that the college has made in recent months. Improvements in the college’s fiscal management, shared governance, human resources, and planning and research operations have occurred since the Commission’s initial findings. Chancellor Drummond has promised Compton College students, faculty, and staff that his office will pursue every legal remedy to keep the college open. During the interim, Drummond indicated that, for the foreseeable future, nothing has changed. The college is still open and accredited. The college continues to be under the administrative authority of the Chancellor’s Office with Interim President Jamillah Moore, Special Trustee Dr. Charles Ratliff, and Associate Special Trustee Dr. Sally Chou. Californians Rank the Economy as the Number One Problem Facing the State. A recent statewide survey by the Public Policy Institute of California (PPIC) found that the state’s economy remains the top issue. Californians continue to rank the economy (19%) and education (14%) as the most important problems facing the state, followed by immigration (9%). As further evidence of economic concerns, 56% of residents say that the state will have bad economic times in the coming year. They are also twice as likely to say that the state is headed in the wrong direction rather than the right direction (60% to 30%). The economy and education were also the top two issues in May, August, and September. At the beginning of the year, the State Budget ranked as one of the top two issues, along with education, while the economy was ranked lower than it is today. Today, the economy is one of the top two concerns in all major regions of the state.

posted by Susan Bray on December 8, 2005 06:26 PM

UNDER THE DOME for the week ending October 31 Assembly Bill 1646—Community College Omnibus Legislation Each year, legislation is introduced that is noncontroversial and is intended to make a number of technical, clarifying, and conforming changes to various Education Code provisions related to the California Community Colleges. This year the omnibus legislation, AB 1646, was introduced by the Assembly Higher Education Committee. During the final days of the 2005 legislative session, AB 1646 was amended to authorize California Community Colleges to provide assistance to students from Louisiana, Mississippi, and Alabama who have been affected by Hurricane Katrina. An urgency clause was added to the bill, making it effective upon the signature of the Governor. The Governor signed AB 1646 (Chapter 654/2005) on October 7, 2005. The following is a summary of the major provisions of AB 1646.u A brief history:  Proposition 187 (1994), among other things, made illegal aliens ineligible for public social services, public health care services (unless in an emergency under federal law), and public school education at elementary, secondary, and postsecondary levels. More specifically, it denied postsecondary education to anyone “not a citizen of the United States, an alien lawfully admitted as a permanent resident in the United States, or a person who is otherwise authorized under federal law. The courts, however, preempted these provisions (League of United Latin American Citizens v. Wilson C.D. Cal. (1997) 997 F. Supp. 1244) and concluded that “California is powerless to enact its own legislative scheme to regulate alien access to public benefits,” thereby invalidating provisions of law established by Proposition 187 to regulate alien eligibility for postsecondary education.  Proposition 209 (1996) prohibits the state from discriminating against, or granting preferential treatment to, any individual or group on the basis of race, sex, c