Senate Budget and Fiscal Review Subcommittee No. 1 on Education

We're waiting for a quorum to arrive, and then we will call the quorum, and I should say on process, just for people to know, I am going to judge the time to allow for public comment based on where we are at the time that we complete all the items. And it is 20 to 11 now, and we really are going to see if we can be done between one and 130.

But we will cross that bridge, and the process is that in the hearing room, we first take public comment, and we're holding public comment until we hear all the items. We'll start in the hearing room, and then we will go to the teleconference line, and based on the number of people on the teleconference line, I will decide if we are going to have a limit of any kind.

At one particular Bill we had in a hearing earlier this week, we had 600 people on the phone line, and we made a tactical decision not to hear from all 600 since we had heard from 300 in the room. So we will cross that bridge when we get to it and make a judgment of what time we have. Today is the fourth higher education Subcommitee hearing.

We have already had our three Subcommitee hearings on financial aid, on the community college system and on the Cal State University system. And today is our hearing on the University of California. Joining us today is the President of the University of California, Dr. Michael Drake, as well as representatives from the Office of the President, Department of Finance and Legislative Analyst. Office and issue four covers the California State Library.

We will be joined by the California State Librarian, Greg Lucas, and also representatives of the Department of Finance and the Legislative Analyst. Before we begin the first item, a quorum is here. And I'll ask to please call the roll.

[Roll call].

Thank you very much. We don't anticipate taking formal action today. We will do that after the revised budget in May comes out, but we want to hear every item and discuss it. That will be the subject. So we have actually vetted it. And so let's move to issue number one. And for the sergeants, I believe these microphones are working today. Right. Okay. Then we'll ask Dr. Drake. Gabriella Chavez from the Department of Finance, Ian Klein from the Legislative Analyst Office.

And I know that Saya Vertenen is here to answer more detailed questions for the University of California. And I think there's a second person from one of the other agencies as well. Good, because I'm counting to five, not we. Well, actually, I'm counting to six. Thank heavens. Because we're doing budgets, we should do this accurately. Item number one is divided into four sub items.

And we find that it's always difficult for the Subcommitee because we get the overview in the first one and everybody wants to ask about the next three as part of the overview. We will do our best today. But just for the record, issue one a is the State of the University of California, General updates and talking about core operations. Issue one b is resident enrollment at the University of California.

Issue one c is student housing, which for everyone we have discussed at length in our community college hearing for that segment and in our Cal State University hearing for that segment. And then the fourth issue is pathways to UCLA proposals. So with no further ado, let's begin. Item one, the State of the University of California, General updates and core operations. And we're going to go with the President. First the Department of Finance and then the Legislative Analyst Office. So, Mr. President, welcome to the Subcommitee.

Good morning, chair Laird and Members of the Committee. Good to see you all. Before I begin, let me thank you, Senator Laird, for your remarks at the UCANR statewide conference earlier this week in Fresno. We appreciated your insights and show of support for UC's A R network. So thank you very much for that. And thank you also for giving me the opportunity today to discuss our common vision for the University of California and my priorities.

To accomplish that vision, I also want to discuss the University's efforts to support the needs and priorities of our state. The University of California supports and enhances our state in a myriad ways. We operate 10 campuses, six academic health centers, three national laboratories, and about 150 institutes, centers, bureaus, and research laboratories throughout the state. The University's $47 billion operating budget reflects a vast enterprise that reaches into every county in California.

As I've shared with you before, my priorities for the University are to expand student opportunity and academic excellence, to strengthen an inclusive, respectful, and safe University community, to lead on the big challenges facing California, such as climate change and to serve the people of California by promoting health access across the state, including in our most vulnerable communities. Each of these priorities is closely aligned with the needs of the state.

In all that we do with the University, we seek ways to ensure that our research, our teaching and our public service efforts address the needs of Californians. The University is making important progress in achieving each of these goals. To strengthen our inclusive, respectful and safe University community, we have developed a new data driven community safety plan which went into effect at our campuses last November. The plan was developed with input from broad array of stakeholders.

For more than a year and a half, we held discussions at the campus and systemwide levels with our community Members and subject matter experts. Central to this plan was the need to create an environment where all of our community Members feel and are included, respected and safe. Working toward equity and justice is a critical part of our vision for a University that serves all of California.

This ideal is woven into the University's everyday work and we believe that each Member of the University community has a part to play in moving that goal forward. To tackle the climate crisis, we are awarding $185,000,000 received from the state and the current budget for climate resiliency grants to researchers and climate initiatives across California. These grants will support innovative research that will produce real progress in California's prevention and mitigation of climate change.

This research is just one example of how the University's vast research enterprise will grow our impact. The state also provided funding to each UC campus to develop plans that will transform us away from natural gas systems to power and heat our buildings. Housing availability and affordability are top concerns for the University community, particularly student housing. Since 2015, UC campuses have constructed over 25,000 new student housing beds.

We currently have over 6000 additional beds under construction and I want to thank the Governor and the Legislature for providing the University with state funding to expand affordable student housing. Very important. The University has also made strides in the healthcare arena. Most significantly, our health system responded swiftly to the COVID pandemic crisis over these past three years, treating patients from the very first days, seeking treatments and disseminating vaccinations. I'm proud of our efforts here and nationally.

We helped save literally thousands of lives and contributed to the well being of communities across California and beyond. I'm going to repeat that. I'll say that again. People say things and then they say thousands of lives. This was a circumstance where we really did things that saved thousands of lives compared to other similar communities. And we're very proud of the effort that everyone put into leaning into making that true.

Particularly want to make sure to thank our frontline workers for their compassion and professionalism in the face of this generational public health crisis. Our work to respond to the pandemic has not stopped. Last year, we opened the first post Covid clinic in California at the UC Davis Health center, where patients can seek care and support for often perplexing symptoms that persist even after negative tests for the virus.

With a wider angle and longer view, and with the support of the Legislature and the Governor, the University has launched two new prime medical programs to train future doctors to work in underserved communities. The prime program prime started 28 years ago. The prime is for program in medical education, and there are a series of programs in medical education that started with the region's approval in 2002 and have grown now to all of our campuses. And happy to talk more about those.

No, and I appreciate your staff briefing you because we're on a war against acronyms here and you just defined it, so thank you very much.

Great. Yeah, it was actually, I was in the office and it was my acronym, so I know what it means actually. So thank you. But the programs were developed to train medical doctors to work in underserved communities, and we're now teeing up a new prime program, a DDS prime program to work to expand dental leadership and dental care in underserved communities. Very important. It will ultimately enroll 42 new dental students at the UC San Francisco School of Dentistry at a cost of about $1.8 million annually.

And I hope that we can count on your support for this program, which will help to address a critical gap in dental care for Low income Californians. We continue to make progress on expanding student opportunity and growing academic excellence. This is also reflected in the goals of the University's compact with the Governor. The compact is centered on the key pillars of access, student success, debt free education, and intersegmental collaboration, goals I share with the Legislature as well.

The 5% base budget increase proposed by the Governor provides much needed budget stability and allows our campuses to admit more students. It also enables us to make critical long term investments in our students, in our faculty, and our research and infrastructure. I'm grateful to Governor Newsom for the proposed funding increase, and I ask for your support in providing these funds to the University.

As we work to build a more just and equitable University, we want to increase the number of students, particularly California students, who have the opportunity to attend one of our campuses. And I'm committed to providing equitable opportunities to Californians by continually increasing access to a University of California education. Over the next decade, we plan to steadily grow the University's enrollment by more than 23,000 state supported students.

23,000 students is roughly the equivalent of the population of students we have at UC Santa Cruz, and we'd like to add that number without building formally a new campus. Just by improving the efficiency of our campuses and growing the size of those campuses that can grow. This new growth will build on previous efforts funded by the Legislature, which have added more than 13,000 California undergraduate students at the University since 2017. Our targeted enrollment growth is possible with the support of the compact and the Legislature.

The 5% base budget increase supports the addition of about 2000 California undergraduates each year to our campuses. It is worth noticing that UC campuses were able to hold enrollment steady through the Covid-19 pandemic, a period of intense uncertainty and upheaval, and this was not the case for many universities across the country. In fact, the University of California admitted a record number of California first year students in the fall of 2022, including an increase in the number of students from underrepresented backgrounds.

And our current enrollment growth plans are only part of a larger story. For the 202324 academic year, our campuses had initially planned to grow by about 4200 California undergraduates. This figure included 900 nonresident students who'll be replaced by California students at our Berkeley, Los Angeles and San Diego campuses. We are now these very days exploring ways to increase that proposed growth for this coming fall beyond 4200 students to meet the aspirational goals laid out by the Legislature in the Budget act of 202223.

So we'll have more news about that in May. We'll get to the statements of intent to register or sir date is May 1 and so we'll know where our students are then. And I've heard from several campuses that we think we're going to be able to increase the enrollment of students for this fall over what we had projected even six weeks ago. This robust undergraduate enrollment growth will happen in tandem with graduate enrollment growth, as stated in our compact agreement with the Governor.

The agreement calls for the University to increase graduate student enrollment by about 2500 students by the 202627 academic year, and we are working diligently to achieve these benchmarks. But it is not enough to simply increase the number of students we serve. Growing enrollment must be accompanied by efforts to nurture student success. We must take steps to ensure that new students have access to the academic opportunities and student support services they need to succeed, particularly as we are more inclusive.

The University has taken important steps to promote student success and a positive student experience, including the establishment of basic needs centers on all of our undergraduate campuses and ramping up other student support services, including increasing the number of mental health counselors. We're also standing up service centers for former foster youth and Carcil system impacted students on all of our undergraduate campuses. This growing infrastructure can help students stay enrolled and complete their degrees in a timely fashion.

In partnership with the Legislature and the Governor, I am also seeking ways to expand affordability at University of California campuses. My goal is to offer a path to a debt free UC education to all California undergraduates by 2030. Increasing the number of students who graduate without debt is not just good for the students and their families, it's good for the state as well.

Graduates with less debt will be able to purchase homes, save for retirement or start a business sooner than those who are burdened with debt. Provided stability and, excuse me, providing stability to communities. We are making progress toward this goal thanks to the significant new investments in state program enhancements created by the Legislature. Thank you. The simplified Cal grant program will provide additional assistance to older students and the expanded middle class scholarship program will provide critical cost of attendance funding to lower and middle income students.

Along with the recent increase in federal Pell grants, these state programs will provide critical assistance to California students pursuing a UC education. Providing robust financial assistance to students while they are pursuing their degrees supports their focus on learning and personal growth during their time at the University. Decreasing debt increases students'flexibility as they consider what path to take after graduation, opening opportunities in areas from entrepreneurship to public service and lastly, our efforts to prioritize collaboration with our public higher education partners.

The California State University system and the California community colleges are very important to us. A prime example of our inter segmental collaboration is the cradle to career system. A partnership between the Governor, state agencies and the public higher education segments. This system will deliver critical information on education, financial aid and career outcomes to prepare students to reach their college and career goals. We appreciate the opportunity to partner with the state in this way and we look forward to collaborating on the work ahead.

At the University of California, we are driven by our public service mission and everything we do. We are committed to providing life changing educational opportunities, to producing cutting edge research solutions, and to offering top rated health care for Californians. I just read actually today in Forbes magazine article that said that in 2022 we were the leading University in the world for new patents, more by 200 than the next highest in the world. So really pleased about that. That's continuing to move forward.

That was an aside from bringing agricultural programs to all 58 counties to fostering economic growth throughout California. We're working every day to ensure that the positive impact of the University of California is felt in every corner of our state. Stable funding for the University is, of course, critical to our ability to keep up this momentum and improve the lives of everyone serving and living in this great state. I want to thank chair Laird and Members of the Budget Committee for your continued partnership.

As we strengthen and expand the reach of the University, we would not be able to make the impact that we make without your support. I look forward to working with you this year and in the future to ensure that we continue to grow and serve California together. I think I'll pause there. I know that that was item one a.

That's perfect. We really appreciate your comments and I think we're going to have questions after we hear from all three panelists. So thank you very much and we're going to move on to the Department of Finance.

Good morning. Chair Laird and Members Gabriel Chavez with Department of Finance. The Governor's Budget maintains the second year of the multi year compact with the University of California in Exchange for clear commitments to expand student access, equity, affordability and to create pathways to high demand careers. In line with that, the Governor's Budget includes an increase of approximately 215.5 million ongoing General Fund for operating costs. This represents a 5% base increase.

The governance budget also includes 30 million ongoing General Fund to offset revenue reduction associated with the replacement of 902 nonresident undergraduate students enroll at UC Berkeley, Los Angeles and San Diego. This will be replaced with the equal number of California residents undergraduates at these three campuses. This investment also builds on the previous 31 million ongoing General Fund that was provided in the 2022 Budget act.

Other investments include an increase of 4 million ongoing General Fund to offset declining Proposition 56 revenue for a statewide grant program and maintains a 40 million ongoing General Fund. 40 million ongoing funding for graduate medical residency slots. The current General Fund support for this program is currently at 10 million ongoing and consistent with the 2019 Budget Act. Budget includes an increase of 6.5 million ongoing General Fund to support debt service associated with the UC Medical School project at UC Riverside.

The following year, UC Merced will receive General Fund to support the debt service associated with the UC Medical school project at UC Merced. Thank you and happy to answer any questions.

Thank you very much. And then we'll move to the Legislative Analyst chair.

Mr. Chair, I'm going to have to leave at this time. I have a flight that I have to catch, and I completely apologize. But we have the report here. So thank you very much for the opportunity to be here. I hate to leave you, Mr. Chair, but I am your wind beneath your wings in spirit.

Just wanted to let you know that I'm grateful for the University's work in providing education to our students here in the State of California and for all the goals and goals that you are aiming to achieve.

Thank you.

And I think we have also just want you to let you know that as the chair mentioned earlier, I'm very much and so support of making sure that we have the housing needed, because I think that has a ripple effect on not just the students and the affordability aspect of attending school, but also the impact that it has on our local community. So thank you very much for being here and for the work that you all do in your particular.

Spaces.

Thank you very much. We appreciate it. We understand we'll move to the Legislative Analyst.

Thank you Mr. Chair and Senators you inclined with the analyst office. Our comments on core operations begin on page seven of your agenda.

You might have to pull the mic just a little closer to make sure and up just so you make sure you can be fully heard.

Our comments on core operations begin on page seven of your agenda. Our main concerns with the governor's proposed base increase are first, that unrestricted base increases do not lend for transparency or accountability as there is no language that ensures UC will use the funds as described in their budget plan. Secondly, the proposed amount of the increase is arbitrary and not linked to UC's actual cost increases as shown in the agenda on pages 3 and 4.

The proposed base increase, along with the anticipated revenue from tuition and fees and other sources, will cover some, but not all of the anticipated operating costs for UC in the upcoming fiscal year. Additionally, the state's budget condition has worsened since UC adopted their budget late last year. The Legislature may wish to take this information into account when deciding on an appropriate level at which to Fund UC. We recommend that the Legislature decide on which UC operating costs it wishes to prioritize.

Rather than providing for an unrestricted base increase, it could then provide funding for those priorities. Additionally, given the state's fiscal condition, we recommend that the Legislature considered the 5% augmentation in upper bound. If the Legislature were to link specific dollar amounts to high level budget priorities, UC would still have flexibility.

For example, UC would be able to make key decisions about how to distribute compensation increases among its employee groups, how to prioritize oe e costs, as well as what, if any, life safety capital projects it wishes to undertake. Thank you very much.

Thank you very much. And now we're going to go to questions and let me just make a brief statement, and that is appreciate the President's comments about a debt free college. And we had a complete hearing on financial aid already. And if you're not getting questions on that or otherwise statements, it's because we spent a few hours on it already and really spoke to our desire to do exactly that across the higher education system. So we really appreciate your commitment.

And then let me sort of immediately go to one of the main events, and that is everybody was mentioning the 5% increase. And for those of you following at home, the Governor had a compacts. The community college one is called pathways, but compacts with UC and CSU. And last year the Legislature wanted to go past the compacts and they were scaled back to 5% in the final budget.

And now when everybody across the budget is taking cuts, the 5% represents an increase to campuses, even though it probably doesn't keep up with inflation. And so in our Cal State University hearing, that system provided us with how they would spend the 5% and what they thought the priorities were for the next tranche of money in case, because they have, in particular employee units, that contracts are coming up, that 5% does not allow them to truly have probably what they need to meet salary studies.

I was going to ask the University to start if you had any similar list of what the 5% would go for, or if you could describe to the Committee what you think that would be.

Yeah, I would say first that you mentioned that costs are, in fact increasing, and we are, like all universities, overwhelmingly personnel driven in our cost. I mentioned our budget is $47 billion. It's a very large enterprise. So we have a huge enterprise that's growing, the core that is funded by the state, but supports our faculty and the core mission of our education. And this is part of the money that we need to be able to Fund that core mission as it continues to expand.

So the part that comes from the state is part of it. The part that comes from tuition is a part of it. We have contracts and grants and other things that come in and Fund that. So they're all a part of the floor that we're trying to increase to be able to meet our costs.

So I think of us as being underwater and trying to move up to a place where we can breathe, and this is a stepping stone for us to be able to get to that.

And then a follow up question that is directly related. The University agreed with UAW on a contract for graduate students.

How are you against fully funding that contract, and how does that fit on the 5% and your broader budget? How does that work?

Yes.

That's a large contract. We have about, in this contract, about 35,000 graduate students, and then additional postdocs and researchers were included in that contract. So just under 50,000 people. And the average increase was larger than that over the time of the contract. So this would be part of funding that movement going forward.

And I know that our agenda has a more specific question, and maybe you want to redirect it, but it is whether any of the campuses have done in relation to this contract any of the following activities. Increasing class sizes, cutting course offerings, reducing appointment lengths or eliminating appointments, reducing graduate slots, shrinking research groups. We're just looking to see if there are specific impacts that in some ways might have been unanticipated, but that are part of agreeing to this agreement.

Yeah. Do you want to say anything about that? I can answer, but say if you're going to say something's more specific. Yes. What I would say is there have been no specific system wide approaches of that type. There are adjustments always in programs as we move forward. But as we're looking, this is the implementation phase of the contract.

The contract was just signed a couple of months ago, and so I think all the departments, all the faculty, this is affecting thousands of faculty and their individual labs and teaching, and so everyone is looking at the way to move forward into the future, and it really is the active implementation phase now. And so there are no wholesale or specific changes of the type that you mentioned, I think.

I appreciate that. I would just say that we have that concern, and we will be looking to see if there are specific things that fall in those categories that come out of this. And one thing that's not in our agenda packet that's been a very hot issue in the last couple of years is the whole issue of contracting out services. And you have required reports and different things. What's the status of that at this point?

Yeah, so we have very strict policies that the regions have adopted limiting contracting out to circumstances that only do that when there's no other reasonable alternative. And I know that I was a chancellor many years ago, and we, 15 years ago had a policy of insourcing all of the services that we could. That's become regents policy now. We have just completed an audit a few weeks ago on the first phase of the newest level of contracting out guidelines, and the audit shows that we've done first.

It's been very hard work. The audit itself was about 20,000 hours of work, so it's very difficult to measure each of these contracts. And as I said, we're a large enterprise, so we have a variety of different things that take place on our campuses, but also quite far afield. And so gathering all that data took a great effort, and I'm pleased and proud of the effort people put into gathering that.

And we find that, I think there's been great progress made on implementing all of the region's policies, and we continue to work forward on that. So it's an ongoing.

Is there an updated report that we've been provided? And I just haven't seen.

We released an audit a week and a half ago, roughly, so that would show where we were. This was the first audit of the new language, and it was great. I think did a good job of finding where there were opportunities to do better, where we made real effort, and that's ongoing work on a daily basis.

Okay, we'll make sure all the Committee Members have.

Great.

So thank you. And then before I go to my colleagues to give them a heads up, we're coming there in a second. Let me ask the Department of Finance. The President mentioned UC agriculture and natural resources, and there's cooperative ag extension. And we did a major restoration the year before last to bring it back where it was 20 years ago. And then last year we had a difference over a cost of living increase. Is there a cost of living increase?

I think I know the answer, but I just want to get it in the record. Is there a cost of living increase built into this budget?

What the Administration did at the request of the UC is that a percentage of the 5% was provided to the UC ANR on a similar amount as the budget grew.

Jack Swalt Department of Finance to clarify that action has yet to be taken. The amount of money that would represent the share of UC A R is currently in their base reference to get really technical. And so in conversation with UC, we're determining what proportional percentage of that amount should be going to the reference that contains the budget for ANR.

And I'm sorry, I'm even a trained budget analyst, but I'm going to have to translate that to English. And so I think what you're really saying is if there's an increase, you're going to negotiate it with UC out of the 5% compact money. Is that what you're doing?

Essentially, yes.

Okay. I would just express that the reason we did that two years ago is there had been a 58% reduction over 20 years because they never got a cost of living increase. Last year we had a difference over this and then we're back to this this year. And the 5% doesn't keep up with inflation and doesn't keep up what they have to do, and we're putting it back on that.

And so we're starting to march down the path of what we tried to fix on an ongoing basis is not strangle this program by the amount of inflation in every year. And so we have had the exchange. So I'm just going to call out that for me, that's an issue we would like to see in the budget. And when we get into negotiations, we'll just want to make sure it has a cost of living increase. Let me go to my colleagues. Are there questions or comments?

And this is global. We're still going to get to student housing, resident enrollment, and pathways to UCLA. Senator Smallwood-Cuevas.

Thank you, Mr. Chair. And thank you so much for your presentations. It was good to get that overview and information, and I just want to follow up on some of the points that you made and also Mr. Drake's comments. So the system is operating at a $40 million deficit. Is that the keeping head above water foundation? I wanted to clarify what you meant by that microphone.

No, I just meant that our costs continue to rise with inflation, et cetera, and so we always are chasing those costs each year. We mentioned the 5% increase, which is a substantial amount of money. It's 5% of a part of our budget. It fits in with a much larger budget.

Okay. When I heard head of below, meaning, is there a deficit?

Yeah, no, I think that we're doing okay. What happens is that I remember former Governor Brown mentioned this once at a regents meeting that we do education and health care, and those are things that are, in his words, if I may remember, sort of an infinite good. Better health is better. More education is better. So we're always doing as much as we can of those things, and we're limited by resources. We need more hospital beds. We need a whole variety of things.

And so we work hard to be able to find the resources to build those things, to be able to support the state and to the fullest of our extent, but we never can catch up. And when our costs go up just to maintain, then we have to develop more revenue just to keep what we had going last year going. And that's just our normal.

I'm going to ask a follow up clarifying question, because our agenda packet more or less says, and I think this is what Senator Smallwood quavis was operating off of, that if you continued at the current level of service, there's roughly a $40 million operating deficit to keep the same level of service going. Is that a correct statement?

That would be a correct statement for.

Yes, if we kept going. Got it.

Okay. But then you, with all your sources and the entire budget, figure out a way to bridge that so that while there might be an operating deficit, you actually have a budget that's in balance.

We have to keep the doors open and lights on.

Okay, got it. Thank you for letting me follow up.

Thank you.

No, I appreciate that. I appreciate that. And it is 47 billion is a huge budget. So just thank you for clarifying that. The other question I wanted to follow up on, you mentioned the graduate student goal in the compact. How are you measuring being on track to the 2500? Where are we in that sort of thinking in terms of how those students will be brought into the system?

Yeah, it's a goal in the compact. Actually, when the compact first was being discussed, it really focused on undergraduate students, and we wanted to make the strong point that our enterprise relies on graduate students in a variety of ways to allow us to move forward and to keep us going. I mentioned the patents that we had in leading the world in patents is something we're proud to do. We're a research University.

Half of our faculty's effort is spent on research, and we do two things that graduate students are particularly actively involved in. One is they work in that research enterprise. They work in the educational enterprise as they're learning themselves to be independent professors. That's a part of our daily work, but also we're training the leaders for the future. And part of our mission is to train the people who will be the leaders, the entrepreneurs, the professors, the inventors of the future.

And graduate students are central to that role. So when we were negotiating the compact that was focused mainly on undergraduate students, we said, that's really growth in undergraduate students is great, but for us to continue to be the University of California, we have to grow undergraduate and graduate students. And we settled on a number of about 2500 between now and 202627 as the target numbers are always fluctuating a bit.

We have about 67,000 graduate students, so that's growth of a few percentage points a year, but that's our target for the next three years. So we'll continue to monitor that.

Great, I appreciate the clarification on that, and I think I had just a couple more questions to follow up on. I saw the pie chart in our packet in terms of the resources or what kind of makes up the budget, but could you give a little bit more detail in terms of where the funding sources come from to make up those different pieces of the budget other than the General Fund support that obviously the state provides?

And how does those other funding and revenue streams cover the agreement?

Yeah, you saw that there were a variety of revenue sources. Half ish of our revenue is involved in the health services arena. So patient care is a big part of what we do. But halfish of our budget, we have the Federal Government that funds our national labs. That's a significant segment of our budget. We have research broadly that is funded across our campuses. That's a significant fraction of our budget. You mentioned tuition. That is now because we have 300,000 students, although our tuition is great.

It's Low by comparison. It's across many, many students. That tends to be a significant part of our budget as well. And then we have a variety of service contracts and other things that we do. That's a smaller fraction. That's important, I should say. And I remiss to not mention ballpark, plus or minus about $3 billion a year in our budget comes from philanthropy. The people of the State of California are incredibly generous in their support of the University. It really does help us dramatically.

And all of those things together then form the sources of our revenue and then all of that, we try to leverage all of that revenue to balance and support itself in keeping the enterprise moving forward.

Thank you very much, Senator Min.

Just out of curiosity on that point, first of all, thank you for being here. Thank you for your testimony. Good to see you, President Drake. And thank you for your continued push for expanding access to the University of California. UC is obviously the jewel of our education system, the jewel of public education across the world, and certainly appreciate your efforts to try to expand that. And certainly we need more slots. I appreciate the 23,000 slots that you're working to add.

We'll also add that I personally really appreciate the prime program that you put into place. I know that's a passion of yours, but it's important that we continue, particularly in this era, to expand healthcare access. And I think that's a great program to do that. Following up on your point earlier, what is your endowment right now, and how much does that generate each year for your school, for the UCS combined?

That's a Nathan question. I think that we're at about. Is it about $23 billion? I think that's about right. If I look at our liquidity and our endowment, I think that's about the endowment across the system. Yeah, we'll verify, but that's the amount that's in my mind.

And so that generates what, like.

Yes. And for those of you at home, say, how was nodding? Yes, nonverbally. Okay, great.

That generates what?

4.2% is our endowment payout. So that would be about $1.0 billion a year.

Okay, that's pretty nice. I guess my question then would be related to the UAW deal that you struck and just want to follow up on some of the questions that you're asked. I have heard concerns raised from some of the graduate students that I represent and elsewhere that they believe that the University of California is prepared to make major cuts in graduate student slots. And I know you kind of answered this, but I just wanted to drill down a little bit.

Is that not the case at any of the UC campuses or campus UC wide?

We're not planning to make major cuts. We're planning to grow the number of graduate students we have over these next three years.

So that's a commitment right here that there are not major cuts planned to graduate students.

No. Let me make sure I'm saying things that are true no matter what individual programs might adjust, but on the aggregate. But in the aggregate, that's not our plan. But I've had graduate students that worked with me over the years. If you have a grant and the grant runs out or if you stop teaching a course or whatever, those adjustments. But in the aggregate, we are growing as a system.

Fantastic. Thank you. Appreciate it.

Thank you very much. And we really appreciate this discussion. I know on a few of these things we're going to want to continue the discussion as we move ahead, and I appreciate my colleagues understanding we have to bifurcate this agenda. So we're going to move to issue one b, which is resident enrollment at the University of California. And we have the same panelists. We're going to go in the same order. So we'll begin. Any comments from President Drake?

Thank you very much, Mr. Chairman. I've spoken at length over these years about enrollment growth. And to reiterate briefly, expanding student success is one of my primary goals for the University. Increasing opportunities through enrollment growth is an objective I share with the Legislature and the Governor. This year, UC campus has managed to increase headcount enrollment, while many universities around the nation experience sharp declines. We grew our California undergraduate headcount by over 1800 students because of reductions in summer course taking among our resident undergraduates.

Our full time equivalent, or FTE student numbers remained flat. And let me make sure I say that so headcount means number of people that you admit. And so we admitted and enrolled more students by about 1800 this year. During the early parts of the pandemic, there was an increase in unit taking activity by students.

We saw it and seen around the country when we went to remote courses, students took more units per quarter than they'd been taking before, marginally by a fraction of a unit per student, but times hundreds of thousands of students, that turns into a higher FTE count. Those numbers then retreated in this last fall. So students now were taking fewer courses per semester than they were just a couple of years ago.

So the FTE numbers or full time equivalent numbers went down or kind of held flat, even though the number of students that we had on campuses went up. We're following this carefully now to see if this is a longer term trend. We tend to measure things over four or five year cycles and what we've seen is they've begun to tick back up again. But there was a flattening of the FTE even though the headcount increased.

We're beginning to see increases in the number of courses students are taking, however, now, and we're concerned about the softness. Also, with first year retention, there was again nationally, the first year retention is the number of students. The first year students will go on to register again in the second year. And we've been done very well as a University system in this arena, averaging in the mid 90s. That's great.

Some particular parts of our student population saw a drop off in retention rates, particularly first generation and students from lower income backgrounds. There was a bit of drop off and we've seen this nationally and believe again that it is a pandemic related effect and we're hoping to see reversals of that as we go forward. But just wanted to mention that's something that we are concerned about. We've also found that there have been persistent equity gaps for Pell Grant, first generation and underrepresented students broadly.

And again, these seem to be exacerbated by the pandemic and are a national concern, but we're following these very, very carefully. We are nevertheless remain committed to continuing to increase access to California students and providing them support while they're at the University and hoping to have new data as the spring rolls on about being able to make even more offers for the fall.

Thank you very much. We'll move to the Department of Finance.

Gabrielle Chavez with Department of Finance the University of California is expected to enroll 292,891 students in 20232024 of which 237,811 will be California residents. System wide tuition fees for undergraduate residents will be 13,752 in 202324. Although the University is still experiencing the aftermath of the Covid-19 pandemic, which includes lower rates of transfer, student enrollment, some enrollment decline and students enroll in fewer units, which then lowers their count towards enrollment on an FTE basis.

The Administration is closely monitoring student enrollment and it expects the University of California to grow resident enrollment undergraduate by 1%, as indicated by the multiyear compact. As previously mentioned, the Governor's Budget includes an increase of approximately 215.5 million ongoing General Fund for operating costs and 30 million ongoing General Fund to offset revenue reduction associated with the replacement of 902 nonresident undergraduate students enroll at UC Berkeley, Los Angeles and San Diego, which will be replaced with an equivalent number of California resident undergraduate.

Happy to answer any questions.

Thank you very much to the legislative analyst.

Ian Klein with the LAO. Our comments on enrollment begin on page 13 of your agenda. We recommend that a budget solution be adopted related to lower than anticipated resident undergraduate growth. The 2223 Budget act provided 51.5 million that would be provided for UC to grow resident undergraduate enrollment by roughly 4700 students. Budget Bill language also stipulated that if UC did not hit that target, that that funding amount could be reduced in accordance with what the actual level turned out to be.

We have now received UC's projected enrollment level for 2324 and that level is going to be a bit Shorter than what was stipulated by the 2223 Budget act, and we've calculated that difference to be roughly 15.6 million below the 51.5 million that they would receive if we were to align that funding level with the actual or the projected 2324 enrollment level.

The Legislature could also go further and reduce the full 51.5 million as UC does not anticipate that they will be bringing in any additional students for the 2223 academic year. There are future concerns with respect to enrollment for UC. California. High school graduation rates are down, and as you've just heard moments ago, the success regarding transfer students and the retention of current students has been mixed. Given this uncertainty, we recommend that the Legislature specify a growth target for the 202425 academic year.

This process can't be done for the 2324 admissions cycle as admissions packages are already being produced. So 2425 would be the first upcoming cycle whereby the Legislature could influence enrollment. In setting enrollment expectations, the Legislature could use UC's planned enrollment growth as shown on page 13 of your agenda, or could adopt a higher or lower level than that amount. With respect to nonresident enrollment replacement at UCLA San Diego and the Berkeley campus, we recommend that the Legislature approve the $30 million augmentation.

UC is likely to meet the 2223 reduction mark, and this action is consistent with state law and recent budget actions. With respect to graduate enrollment, which we have just spoke about, the compact identifies that UC is to grow graduate enrollment by 2500 students by 202627. Typically, graduate enrollment is determined by workforce needs in the state. The Legislature could set a target for 2425 just as recommended for the undergraduate applicants.

However, the current approach could still work if there are no immediate workforce needs in the state. However, we do recommend that the Legislature seek better information on how UC will cover the cost of the anticipated increase of graduate students as grad students typically do not cover their associated cost, and enrolling more students could worsen UC's projected operating shortfall. Thank you.

Thank you very much. And I think to start questions, why don't I just ask if the Department of Finance and the UC has a response to the Legislative Analyst budget solutions with regard to enrollment, why don't we start with the Department of Finance.

Department of Finance the Administration believes these enrollment challenges are temporary, and as part of the compact, we continue to provide support to students and ensure the compact delivers access to higher education and equity. We should aid the segments in meeting the enrollment target. The Administration also sees the compact goals in the context of the entire window during which the compact is active. UC development plan to address enrollment decline and we expect the segment to get back in track.

Okay, the University of California.

Yeah, I like what she and these targets. And when I hear the number of students we're going to have that are listed to the decimal point, and there are things that cause them to vary. It's individual human decisions. I mentioned it's the number of units that students take on average, and these things fluctuate over time.

One of the great things about the compact is that we have five years of planning, so we can hire the faculty to create the courses to get their lab started, to do the work that they need, knowing that there's a runway ahead, if there's a string that gets jerked every year depending on fluctuations in our moving forward, to say, wait a minute, things look like they might be slowing down, let's put the brakes on even more.

That makes it difficult for us to plan effectively and if we're going to grow to meet the workforce needs of the future in these multi year arrangements that we have with students coming moving forward, we have to have a stable funding platform with which to grow. So I think it's very important that we continue with a stable funding platform. That's why we made a five year pact with the Governor to go forward, and that's what we intend to continue to live up to.

Well, it is also why you adopted a new tuition scheme, or whatever you call it, in 2021. And is that going in a way that you don't think it's affecting enrollment or how is that working?

Yeah, we do scheme in the European sense of the word, if I may. This was, the tuition stability plan was something that we'd had an issue over decades of spikes in tuition. In fact, generally, when things were bad in the state and we'd be squeezed by our state funding, then we'd have to turn to tuition increases to meet our shortfall. And it was exactly out of whack with what was good for the people of California. When they were having a difficult time, tuition would go up.

When times were good, then tuition would be flat. And we found it was quite hard on California families. On the margin, the tuition stability plan has a gentle flow. If we looked at over time though there was generally an amount of inflation over 10 or 20 or 30 years that would kind of smooth out to whatever normal price of collegiate inflation was.

So there was a low single digit or a single digit number of inflation over years, but it would go up dramatically and then be flat then go up dramatically and be flat and be quite disruptive for our function and quite disruptive for families. So we adopted the tuition stability plan, which means that in a given year, the tuition may fluctuate based on inflation, but for a family coming in, that tuition stays the same for six years.

So a student who comes in knows that their tuition, if your tuition is $13,142 when you come in as a freshman, you graduate in four years or in five years, your tuition stays the same the whole way for six years, and it just goes up by that one cohort each year over time. That then also, though, builds in a stable level of increase for the University that, again, mirrors sort of cost of living increases.

We just started this a few years ago, so it'll take a few years before we catch up, but it's been actually very popular with families who can now plan better. And I will say that we did something unusual when we made this adjustment. We actually returned 45% of that tuition money to aid, and so nearly half of it goes back into our need based aid pool to help lower income students and lower income families.

And so it's really a part of our debt free pathway to the future while maintaining stability in tuition for families from upper income brackets.

Thank you very much. I had two other questions, and one of them got answered, which is the graduate student enrollment issue. And then my last question has to do with facilities, and you are projecting certain enrollments. How do you match it with whatever your facilities plans are and whether or not you have the facilities available to match the enrollment?

Well, great question. And Senator Smallwood-Cuevas mentioned earlier, how do our budgets work? And we are always pushing on having facilities that are appropriate for us to be able to meet the needs of our community. And that works in two ways. One, the facilities that we need to grow to be able to handle our expanding size, and then also our deferred maintenance and seismic needs to make sure that the facilities that we're using are up to snuff.

And so it's something that we continually focus on as we move forward. I will say that's 1, second thing, is that as we look at enrollment growth, and particularly FTE enrollment growth, as I mentioned, we're also looking at nontraditional ways of accommodating that growth. So one is by having more courses that are technology enhanced or online so they don't require extra classrooms as much as they might have in the past. And I will say that's one thing we're doing.

We also have partnerships with other institutions and study abroad programs and other places that allow our students to have a broad experience while making use of facilities that others maintain.

You know that at UCLA we just purchased, in fact, a campus that had a small college that was going out of the business and was able to be purchased at an effective rate to allow UCLA to expand its reach by using facilities that were previously built and are in good shape but were not owned by the University before. UCLA also is buying a new hospital in the Wilshire district, which is much less expensive than building a hospital from scratch.

And so there are a variety of things that we do to try to take the opportunity that we have to continue moving forward with our mission and to maintain our facilities so that they are safe and effective to upgrade where appropriate, to build new facilities and then to acquire others or use technology enhanced ways of allowing people to move forward in their education and research, so all those things,

And we've had this discussion at length the last couple of years, so I almost feel obligated to stipulate all prior comments, but I think that just globally, the real issue has been, and I really appreciate what you just said, that all the existing footprints things are being jammed into, and I appreciate that there might be some online things and the fact that there might be some facilities that are required, that work would be another thing.

And I appreciate that it was said in the previous hearings that sometimes that doesn't work as well because you have to have a certain kind of infrastructure, whether it's counselors, food service, housing, that comes with those additional facilities. And it's not as easy as it seems.

Although Mills College was a very exciting mirage for a period of time, and I just would encourage you to do that because some of the campuses are just at what the Berkeley campus just seemed to continuously grow, and it was really somewhere at the footprint that was long since past what was expected to be there. And it forces these issues that everybody fights about because we're not doing some other thing. So I just encourage you to continue to do that, because frequently that lands on us.

And I know our agenda points out what I already knew, that two campuses, one of them being my home campus, has really linked additional enrollment to be able to provide the housing, and we're going to get to the housing so we'll do that. Senator Smallwood-Cuevas, do you have questions.

If I just adjunct to what you said? Excuse me, Senator, but one of the things that happens we mentioned online, and we see this as a way to kind of use almost a seasoning, not to replace what we're doing with our in person courses, but to add online opportunities within the in person experience that we have so that maybe it's 5%, maybe 10% or so of the courses.

What it will do is, we think, help the throughput of time so that students are able to graduate, have a shorter time to degree, and we're able to serve more students with our built environment than we.

In a follow up question, I'm sorry, because I was genuinely going to go to Senator Smallwood-Cuevas. We had an animated discussion in the CSU hearing because they have an explicit program to lower the time to as many students as possible in four years are going through. I know that's a goal that UC has, but do you have explicit program efforts to try to do that?

We're at about 4.9 years to degree now, which is really quite good for universities nationally. We'd love to get that to 4.0 or 3.99 even. I mean, that would be great. And what we found this, I learned more at my prior. We had an explicit program where we were about 4.35, trying to get to 4.25 at my prior institution.

And what we found is that by expanding the curriculum with, we say, technology enhanced, but this was mainly online courses that students could get through the curriculum to their desired major outcome more quickly and more easily, broadly. And we didn't have as many students in a fifth or a 6th year for an undergraduate degree. And as we had fewer fifth and 6th year students, we could have more first year students or second or third or fourth.

And so we actually could make the University opportunity available to more students in our same footprint by just helping those students who were there get the classes and the appropriate curriculum for their degrees that they needed. So that it's something that we're continuing to move forward with. This was done in the pre-pandemic period. We're now looking at ways to do this in the post pandemic period as well, to just make that opportunity more available.

Thank you. And thanks to Senator Smallwood-Cuevas for abiding that additional exchange.

Over to you, Chair. It's just the two of us, so feel free to ask.

Well, no, this was like the House of Representatives. You always think that everybody's there we won't call out.

That's right.

I think a third one's coming.

We're. We're.

We're fine. I guess my question on the enrollments, and I think the Department of Finance used the term equity in how you talked about it, and I'm understanding and hearing the equity in terms of resident versus nonresident equity in terms of lower income and reducing debt. What I didn't hear is sort of the demographic kind of racial equity piece. When I look at enrollment numbers, it's staggering.

The representation of black students across the system sort of staying pretty consistent, 4% for many years and ticking up to just 5% compared to. We're seeing some pretty important margins for other groups of students that are seeming to hold steady. I'm curious, where does equity factor in? And what are the steps around building sort of a strong multiracial campus that really looks at the most invisible student populations and ways to increase that visibility in the enrollment number? What are the steps there?

How much of the resources that are being put toward addressing the enrollment issue are being really targeted toward increasing that invisibility? And then my other question, because we talked about facilities and what's being acquired and where it's being acquired, I'm really curious about that, because if we're talking about equity, proximity matters.

This whole notion of sort of in other parts of the world, transit oriented education, transit oriented development, trying to put folks in proximity, the folks that you want to engage in proximity to the institutional tools and assets and opportunities. So I'm trying to get a sense of how do those most invisible students factor into the enrollment strategy, and then where are the facilities located? I know there are no UCLA footprints in south central LA, for example, in terms of offices, departments, campuses, satellite offices.

I think along the southwest edge, as you look at the Culver City border, there's some healthcare presence, but certainly not in terms of the student enrollment, sort of the accessibility in terms of the facility proximity. So just want to hear your thoughts on that. And how does that factor into the resources and the investment? Because it won't happen unless you're investing in it in an intentional way.

I appreciate the question, Senator, and let me say I'd love to have a longer conversation as we can find time to do that. It's an ongoing effort for the University over many decades, and several things are happening that I think would address what you are asking. First, our diversity and inclusion are central to our mission in everything that we do. And every year as we look, we are making progress that we have an increasingly diverse state, so we're making progress to try to move toward that.

You mentioned the five ish percent African American enrollment, always a challenge for us, and low. I will say that in my days as chancellor, we were in the 22 and a half percent range. And so we actually have moved up quite a bit in the last 15 years. You know, that we took a whopping dip in the Prop 209 and other things that happened to really put the brakes on, and we've been working to recover since that time. And those programs continue.

We have our safe programs, our investment programs that we have in outreach and making the University more accessible to communities broadly. Those were well funded in the dropped off, but then has been increased these last couple of years. And so we're really pleased about that because it helps us get out into more communities. One of the things that we note in our efforts to make sure that we are, there are three things that I have said for many years of my career, which is access.

Affordability and excellence are the hallmarks of what we want to do going forward, and access being all three at the same time always. But access is one that we start with, and one of the things that we believe is a very important pathway of access for the University of California is transfers through the community college system.

What we note is that there are some of the community colleges that have a very high transfer rate to the University of California and some which have a very low or nearly no transfer rate. And so we have a program this year to do what we can to move out to those areas of the state where the community colleges have a very, very low transfer rate to try to increase that representation, believe that will assist in our diversity.

We are changing our internal funding formula for high school students that come in and actually providing more resources to students who come from high schools that have lower levels of support, LCFF high schools. And we want to do that to make sure that the campuses can enroll those students and those students will be successful. All of the campuses have equity gap closure plans over these next several years.

When they come and report to us each year on their progress, they look at their graduation rates and those communities that are falling behind and what they're doing to close equity gaps. And that's an important part of what we're doing. UCLA, you mentioned one of the things that UCLA is doing is looking at, in fact, acquiring other property within the Los Angeles area.

I won't say specifically where they're looking, but they're looking some places that are not Westwood, not west side, not north side, more south side and east side, places where we can acquire properties. Because the University needs to grow. It's on a tiny footprint, and the concept is it needs to grow. Not in Bel Air. That's not what they want to grow. They need to grow in places where there are people and people that we'd like to include more.

Those are ongoing efforts on a daily basis for the University. And I'll say again that we have numbers that are not where we'd like them to be. We, at least when we look in the past, we see that we're making progress from where we were in the past, and that progress continues, and we're committed to that.

And so the $30 million of ongoing General Fund to continue to reduce nonresident enrollment, what percentage of that is funded on this issue of addressing that gap? Because even when I look at Latinx communities since 2014, it's still been a flatline, and certainly there's been tremendous population growth. So just trying to think if there's not an intentional funding stream to wrap around those programs, it's hard to really measure and see the impact.

So is there a percentage that you all spend of the 30 million that's focused on that issue?

Yeah, I would say that the issues of inclusivity and diversity are broader than that. So they wouldn't be specific to that particular. That number just allows us to increase the number of California students that we have. But our entire efforts are looking to bring in more people. And as I mentioned, the SEPEP numbers that we have are specific outreach numbers to try to increase the numbers of students from communities that are and have been traditionally underrepresented.

We also have another program we started, I'll just mention this, we started a year ago a Native American opportunity program, and we did that specifically because that one community has been dismally poorly represented in the University throughout its history. So this program is one that actually means that tuition for Members of federally recognized California Native American tribes is now neutralized for all of those students. And we did that just last year for the purpose of making sure we could strengthen those connections.

And then I know that I have to see this next year's numbers as they come forward. The last two years, we've increased the percentage of Latinx students, and I believe I have to look at two years ago for African American students to see where that was. But we were actually moving up in those numbers, and we want to continue to move forward. Six of our campuses are Hispanic serving institutions, and six of our nine undergraduate campuses, and the other three are close.

So we see ourselves as this is part and parcel of our daily effort at the University to have access, affordability, and excellence for the students of California broadly. And the students of California are diverse students, and so these are woven into everything that we do.

No, I agree. I mean, this is the new majority of California, and so that's where my expectation would be majority. We would see that reflected in terms of the participation rates of both Latinx black, and then you mentioned Native American community, and I think that's at about 1% of enrollees.

I would like to see more information specifically on the access piece of the puzzle and the outreach piece to see if the investment that we're making on non resident enrollment is equitably invested in to make sure that we have a campus that does, in fact, reflect not just the proportional numbers of our community, but also, you know, the. The need in terms of equity. Some communities, particularly those historically left out of the system, need more to ensure that they have a level and fair opportunity.

So that. That's something that I would love to follow up. And thank you for sharing, too. Some of the campuses looking at places outside of sort of more affluent areas. Right. To actually be in proximity of these students that we're trying to bring into the system. My other question has to do with affordability. There was an LA Times article about some students having to decline their acceptance because of the cost still of the University. And so how are you working to make college more affordable?

We are every day dealing with investing in homelessness and housing programs and trying to think about ways to make sure folks have access to food. The Legislature, as you know, we're always trying to address those basic needs. We know you have a growing number of students who have this basic need. And then it looks like it's also just a challenge to be able to say, I got in, but I can't afford to attend.

So if you could give me a little bit of more than the debt free but just getting to college, how are you making it more affordable for those students who are declining just because they can't afford our public University?

Yeah. Again, long conversation. I appreciate the question very much. So, a couple of things. One is our blue and gold opportunity plan. Already it says that students who come from families that make $80,000 a year or less pay no tuition. So the University part of that is already taken care from most California families. That's 100,000 students who attend our University today with paying no tuition. Sometimes Senator Laird and I are of similar vintage.

And we meet friends of our age who say, gosh, when I went to Cal, it was $250 a semester and you can't afford it now. And I say, gosh, for half our students, it's less than that. It's less than it was 50 years ago, because now it's zero. And so that's something that we are very proud of. But that's not the full cost of college. That's the 30%. That is the part that comes to us for doing the college part.

The bulk of the cost are the costs of living, the cost of housing, the cost of food, the things that you have to meet those costs no matter what you're doing. But if you want to go to college, you have to figure a way to meet those costs. And so we have quite robust programs with need based aid to do what we can to help students from lower and from middle income families.

The middle income scholarship that you all have approved does a great job of helping families from middle income be able to afford the University. And what we do is work with our students and with their families to try to close that gap for everyone. We mentioned the debt free pathway that we have as a goal, and that is great. That's established with the state. This year, that debt free pathway will be available for any students who come from the lowest socioeconomic group.

Those are with expected family contribution by the federal guidelines of zero, meaning the family is not expected to contribute money to the student's education. Students who are in the EFC zero category this coming year will all have a pathway toward a debt free graduation from UC. They have to work a bit, but they'll have that pathway there for debt free. And so we're really proud of that. And the goal is every year to grow that until after, by 2030.

And everyone can step on a campus and say, I can attend the University of California and graduate in four years without debt. I will say that the average debt in the country is about $30,000 for people graduating from college now, for the University of California, it's more like $20,000. So we're already much less. We'd like to move that down to making that debt as close to zero as possible.

If someone has a small amount of debt when they leave, I don't think that that's a terrible thing. I think that's manageable. What we don't want is enough debt that's on you. So we want to make it as zero as possible. But let's say you want to do a semester abroad or something else and you can't do your regular work and you have to borrow a little money to make sure your college experience is fully robust.

We say a debt free pathway, but we know that there might be in some circumstances where a small amount of debt is something that a student chooses to take, but the idea is to make it that it's affordable. For know. I read the article in the LA Times. I will say that overwhelmingly when I hear a story like that, that if we look more closely, we can find some way to be of assistance to that person.

Then we have offices and people whose jobs it is to facilitate attendance. And sometimes what we're really reading about is a place where the people just haven't gotten in touch with each other in the right way, let them know how they can afford it. So I heard today, in fact, that that student was contacted and is coming to UCs in the.

Then I guess part of the debt free framework is having on the front end of admissions for lack of a better term. We call it case managers who could actually sort of share with the student when they get their acceptance letter. These are.

Programs that are made available. I've spent some time in the UC system, and I know how incredibly difficult communication is within, you know, how do we make sure that those are part of the tools in terms of communication? So it's like a wraparound process for those who are accepted, you're saying. So it's not a case by case like the student, for example, but actual systemic change that helps connect the students at the point of acceptance to have those tools.

So overwhelmingly, it works great, but it's 280,000 students and all the different campuses and departments and everything else, the individual circumstances can be different for individuals depending on everything that affects them and their families. We have full time people who work for that.

Our hope is to do as much of that with things like the websites and others that make it that people can get basic information but then have human beings there to work through the problems that come up when their individual circumstances need to be focused on and overwhelming. I've been at this for all these years. Overwhelmingly, we can find an just, we just have to be persistent and work together. And we have people whose lives and careers are dedicated to facilitating those things, and they're working as we speak.

Thank you.

Thank you very much. Senator Minn, any questions on this?

No, I just wanted to reiterate the points made by my colleagues know as we talk about the University of California. And as you and I discussed the other day, President, you're continuing to see strong applications volume. You're oversubscribed year after year. But what I hear repeatedly is just how difficult it is to get in the University of California today.

Any of the campuses, let alone the top three or four UCs. I know this is the plan, but I just want to emphasize how important it is that we continue to increase access to University of California, both for freshmen and also for transfer students from our community colleges, and also to really emphasize the affordability piece as well. And I know these are things you're working on, but those are really important for just speaking for myself and it sounds like for my colleagues.

Thank you for your comments, Senator. I first appreciate that and our chances to talk about this in the past. And I'll just want to put in perspective the 23,000 over this decade number that we mentioned, and I'll take our Merced campus.

And I had the privilege of working as an academic Senate member on the launching of the Merced campus in the late, late 90s. And so we had a field, we had a plan and started at the beginning saying if we're going to grow a 21st century university, what should it look like? Where should it be?

So one thing to Smallwood, that having this be in a place where we didn't have a campus that was not coastal, all of those things was really critically important to us. We wanted, because of proximity, to have a campus that was closer to parts of the state that we hadn't served as well as we had in the past. That was the Merced campus. The Riverside campus has grown very actively as well to be in another area where we don't have as much service.

And so that's important to us. If I look at Merced and the great success of Merced, and it's lunchtime, so I'll talk quickly. I was at this agricultural natural resources seminar on statewide convention day before yesterday, and I was on a panel, and next to me on the panel was a supervisor, county supervisor from Tuolumne County. And I was listening to his stories as he talked. And then it came time for me to speak and I thought that, great.

This was in fact the product that we had started, UC Merced to produce. He was about 29 years old, a 2016 graduate of the university. And the concept is that we were going to start a campus that would be a place for people from the region in particular to come and to grow and to have a skill set that would let them go out and then serve and serve their communities and have it grow.

And we had the result of that actually sitting as a person next to me. So I was happy to see that happen. And what I was going to say, that great success there. Merced is now 20 years old and has about 10,000 students and took now billions of dollars of investment to get to where we are.

So we're going to be adding the equivalent of double that number of students in this next decade without the expense of building a new campus, numbers that will be a part of that growth. So I don't want to make that separate, but that's the level of commitment that we have to growth more than actually we'd be able to get if we started a new campus, we think, because we'll be able to use the entire system as an avenue for that growth.

Thank you for that. I know I have a family member that's graduated from Merced and he ended up at the Delta Water Rights Division, at the Water Board. And so my brother and I think we don't know what we did. So thank you. I really appreciate that discussion. And between the two, I think we've hit on a lot of the major overall themes and we still have five different items, and we want to do public comment.

But I think with the possible exception of housing coming up, we have really hit some of the major issues we want. So we're going to move on to issue 1C, which is student housing, which once again is President Drake, Michelle Nguyen from the Department of Finance and Jennifer Pacella from the Legislative Analyst Office. And I know there are some people that are backups for that. So let's begin on the student housing issue with President Drake.

Thank you, Mr. Chairman. At the University of California, we understand that student housing is a key component of an accessible education. Like many communities in California, it is challenging for UC campuses to provide enough housing to meet student demand. This is partly due to the rapid enrollment growth that the University has implemented in recent years, as well as rapidly increasing housing costs, particularly in the communities in which UC campuses reside. Few in California have been immune from these housing pressures, and we are no different.

In 2016, the University launched the Student Housing Initiative to expand campus housing capacity. Since that time, we have added over 25,500 student beds to our housing inventory. We currently have another 6,300 student housing beds in development. Grant funds from the state are making over half of these beds possible, and I thank the Governor and the Legislature for making this support available. It makes all the difference.

Financing, of course, is only one of the challenges for new student housing and a shortage of available land and CEQA challenges to new housing projects continue to hinder campus's ability to construct new student housing. Despite these challenges, we continue to push forward to ensure that our students have access to safe and convenient housing and thank you.

Thank you. Department of Finance.

Good morning. Chair and Members Michelle Nguyen with the Department of Finance for the Higher Education Student Housing Grant program. The Governor's Budget puts forward 500,000,000 one time General Fund for fiscal year 2023-24 and it delays a planned investment of 250,000,000 one time General Fund from 2023-24 to 2024-25. For this intersegmental investment program statute indicates that the University of California shall receive 20% of the overall program funds.

In addition, the Governor's Budget delays the start of the student housing revolving loan program from the budget year, which is 2023-24 to the year after, which is 2024-25 and it also changes the allocation from a split of 900,000,000 one time General Fund in 2023-24 and another 900,000,000 one time General Fund in 2024-25 to instead be 650,000,000 in 2024-25 and 1.15 billion in 2025-26. For this intersegmental investment there is a to be determined split between the UC, CSU, and community colleges.

The Administration recognizes the importance of affordable student housing and the impacts to communities where those campuses are located, and it maintains the overall funding commitments for these two student housing programs. But the Governor's Budget proposes delays to student housing given the overall budget outlook that we faced at the Governor's Budget in January. So thank you. With that, happy to address any questions you have.

Thank you. And then we'll go to the legislative analyst.

Jennifer Pacella, LAO. Given the Committee has already heard student housing a few times, I'm going to skip over several of the points we've made in those hearings. Those points are on page 20 of your agenda. As you probably recall, we've set forth some reasons why you might want to find additional budget solution in this area. Go even further than the Governor. We understand there's an interest to do more in student housing and to do it right away.

You have six proposals before you from UC totaling 499,000,000. Under state law, UC's remaining allocation is 48 million. So you don't have enough to do even one of the projects that they have before you. We would suggest you focus on their top ranked projects. They had a reasonable, they followed state law. They ranked their six projects. Of those top three projects, they have two intersegmental projects and a UC San Diego project.

The UC San Diego project, you will get many more beds at a lower state cost per bed. It's not intersegmental. The other two projects at Riverside and Merced will obviously give you fewer beds at higher state costs. But they do have the intersegmental component. You have various options moving forward. You can just fund one of the projects that seems most promising to you. You can adjust the percentages. Under state law, UC is eligible for 20% of total program funds.

You could increase that so that they could fund one or more of these projects that are before you. You could just provide the funding needed for whichever is again the most promising project. You could ask UC to resize their most promising project so it fits within the program allotment that you have right now. As you recall from your CSU hearing, CSU took that latter approach. They knew how much they were eligible for and they just gave you projects that fit within that project allotment.

UC used a bit of a different tactic to give you some more options, but that does mean that they have more projects before you than you could fund under state law. Happy to answer questions.

Thank you very much. And I really appreciate, whatever you would call it, the realism in your conversation about our previous discussions. And just for those that weren't there, we really don't want to have to scale back the housing. We really don't want to redirect the money that is recommended to other things and cut it down for other things in the budget. That was sort of a clear statement coming from our previous hearing.

And one of the questions I had, or the one that we really drilled down on, I think, for a while in the community college hearing is we have these intersegmental ones, and we're in this position that the piece of the pot that is community colleges could be funded, but the piece of the pot that is UC or CSU could not be funded. And we were trying to understand how they were going to be coordinated in a way that we could do that.

And it seems here that with the amount that's left, it doesn't seem to reach them. And yet at least one of them, I think, was reached in the community college side. So what's the recommendation about to handle that when that happens? Because one of the great things is there seem to be an economy of scale that if each put in, it's much less than, or generally less than a total cost of a thing, and that's something we would look favorably on. So do you have any recommendations about how to deal with that?

One of the main advantages of the strategy you took by having each of the three segments submit proposals effectively directly to you is so you could take more of a statewide perspective. You could look through the UC, CSU, and community college projects and on all those statutory factors you laid out unmet housing demand, affordability, students, other options within that community. You have these good options now, presumably for how you do it. You could do more UC projects.

They, as you have heard about, have far more experience than the colleges in this area. Or you could do the intersegmental projects and get a little bit of both on the college and the UC side. CSU has very well planned projects. Presumably they seem like they're going to hold together. They have a high chance of success. So you have all these options.

You can change state law in terms of the share that goes to each segment and just do what you think are the most promising projects before you, regardless of segment.

Okay. I should say that one of the things that came up in the conversation in the community college budget is that there was sort of a statement or an inference made at some point that they don't have much experience. They're still in the planning stage, and that might give us reason to hold back some of those. I don't know if I'm misstating it, but prioritize less those proposals.

And part of my concern was one of the reasons they don't have much experience is we keep pulling them back at this. Except for those 15 community colleges that we talked about where the district is so spread out that they have, I think only Orange Coast has been funded in the new one with 800 units.

It's those places in the Sierra where the district might go two hour drive, and they need to have dorms just because of the distance that students have to come to do it. Other than that, they don't have the experience.

And I think we want to give them the experience so that they can provide those in places where it's a real need, particularly given some of the testimony we had about the people with housing insecurity at the community college level, that's surprising given the fact that it's community based. So I think you gave us a clear background on sort of how to deal with this. And I would ask if either UC or Finance had anything that they wanted to add to that discussion.

Thank you, Senator Laird. Seya Vertan for University of California. I would just add that for the two joint projects with UC and community colleges, those projects would be built on UC land and would be project managed by UC. We have an extensive staff who deal with construction management. So because of that expertise, we would be the ones who would take on the majority of that project management responsibility. So the community colleges would not need to provide that expertise to those projects.

But it still requires some funding from UC for the actual bed, separate from the project management and separate from the donation or contribution of the land. Correct?

Some of the projects do, and those bonds would be financed by UC as lease revenue bonds that would be paid for with the rental payments from the beds that are not subsidized. So that's the traditional.

Let me clarify that because it is sort of presented here with an inference, and the inference is that if we don't give the UC share from the UC pot of the higher education money, that partnership's not going ahead. Is that wrong? Is it that basically it will go ahead because there's bonded funding that won't come from the higher education funding?

Apologies, sir. You're correct. It will not go forward. We need both the UC portion, the community college portion, and for those projects that have a greater cost beyond those state subsidies, we would use a little bit of the lease revenue bonds but those are not sufficient to build the entire project.

And how do we tell from this how that falls out? What is required from the state pot and what would come from another source of a lease revenue bond? Is that the funds from other sources in millions that's in this page 19 chart in our agenda?

It was in the detail of the grant applications that were sent to the Committee. And I can work with your Committee staff to ensure that there's an accurate breakdown of it. Let me turn.

Please do. We're time challenged and we won't delve incredibly into the weeds. It's just that the discussion we had with community colleges is not to wake up in June and July and say, oh, you should have done this. This project isn't going ahead. And it sounded in the community college hearing like we had to be explicit in the budget trailer bill language about joining them as a joint project rather than just doing the pots by themselves.

And I just want to make sure, yes, we have a priority. We'd like to go past the governor's postponements. But secondly, if any of these intersectmental projects are there, we want to do the right thing in the budget trailer bill Language to make sure it moves ahead out of the budget adoption.

Absolutely. I do think you need to be very specific in the budget trailer bill.

You can help us. Once again in July, it's like, oh, you need to be specific. We didn't tell you how. It's like, I am just looking how to do this because we have the will to do that if we figure out the money. We just want to make sure the way is clear.

Absolutely, Senator Laird. I will send the Committee success with language.

Thank you. And then Department of Finance.

Michelle Nguyen, Department of Finance. Just to clarify quickly, and I believe this was brought up during the community college student housing hearing as well. But for last year's budget for the one intersegmental project that was funded, it was clearly listed in the trailer bill language as an intersegmental project with the amount going to, I believe it was a CSU and the amount going to the community colleges. In that case, it was a 50/50 split, at least what I recall from last week's community college hearing.

The community colleges, in the summary sheet from the community colleges, they had indicated the share that would be between the CCC and the other campus. So in that case, they are indicating what they think the split is, presumably under a joint submitted project that both parties have agreed to that split. And I think that can be confirmed potentially with the applicants, this is the split that you would like. And last year for the student housing program, when there's ambiguity in the projects, we simply asked the applicants to clarify for us, and that helped.

And then we had in the community college one, a very clear ranking in the top eight were going to make the community college funding. And I'm sorry, this is a hometown question. The 7th one was Cabrillo College and the University of California at Santa Cruz. So the Cabrillo College one ranked and is funded, but I don't see the UC Santa Cruz part here anywhere. Does that mean that it didn't make the ranking on the UC side?

I believe the Cruz. Well, actually. Go ahead.

Thank you, sir. UC Santa Cruz, because they received funding in the current year for another project, did not submit a second application for that portion. They would pay for the UC portion of that project from lease revenue bonds, not from the state grant.

So despite what we just said about the other projects needing state pot months and not being done, that one can use UC revenue bonds for the full UC share.

Right. I want to point out those beds on the UC side would not be matching what would be considered affordable under the Higher Education Affordable Student Housing Grant program statute. So the statute.

You would have to do it because it wouldn't qualify under the statute for the other money. I don't want to get too deep in the weeds. I'm just going to take for at face value your statement that you figured out how to fund the UC share of that project. That's why it's not on this list.

That's correct.

Thank you, and thank you for bearing with all that. Colleagues, any questions or additions?

Well, I just want to clarify what is being prioritized by UC in this. What is UC prioritizing in terms of the projects, housing projects that are going to move forward? And I don't even know.

Maybe the way to say it is with the amount that is recommended in the budget.

We'll argue over having an amount that's larger than that, but within the amount that's recommended in the budget, what is UC prioritizing?

Thank you.

We prioritized the joint projects with community colleges. Those were the highest ranked projects because we wanted to ensure that future transfer students had housing and that we would also, within those housing complexes, provide additional advising to the community college students so that they would be better prepared to transfer to that UC campus and already feel like a part of it. And then after those joint projects, we prioritized the projects based on cost per bed to the state, which meant that the San Diego project was the next one on the list.

I just want to note on the community college list, there were not, aside from Compton College, our larger community college systems were not on the priority list. And I don't know, and we talked about proximity.

And you might want to define what you mean by our larger community college system so everybody knows what you're talking about.

The Los Angeles County District.

Thank you.

LACCD was not selected in this round of funding and trying to understand, are those conversations underway, just how are you all defining which you talked about location and those campuses that have the know how because they've been really trying to ensure that they can get students on that campus because it's so hard to get to. How are we in LA County? I'm really curious because I think we're talking more urban versus rural.

I think there are a lot of sort of rural and suburban campuses that were identified for priority through this intersectional relationship. How is UCs, particularly those that are in urban areas, that are in proximity to community colleges, how are you collaborating to actually apply for these funds? Or does that not factor in to your determination on sort of what projects to really go after and what campuses to partner with? I'm just curious about that.

It was up to each individual UC campus to establish that relationship with their local community college and seek a project that might fit the grant guidelines. UCLA in recent years has constructed a large amount of student, undergraduate student housing to the point where they actually have the largest amount.

Affordable housing or just student housing?

Student housing. They have the largest amount of student housing of any UC campus at the moment. And because they just completed a project with about 3,500 beds on that campus, they were not looking to have another project quite yet. They are also, at this point, a very land constrained campus and they just acquired another smaller campus elsewhere. So I think their attention is on how do they develop that.

Got it. Yeah. I think what I appreciated about this selection process was just the amount of focus on affordable housing beds. And I know that affordable housing certainly in LA County is an issue. And so just curious how you all are making those partnerships, particularly where there's campuses where there is available space to do that kind of development. So thank you for that.

My other questions have to do with how you see, and we had this conversation in the community college discussion and coming from underrepresented communities where we have some of the poorest census tracks and where we have this phenomenal public land grant university, how do we ensure that when we are spending any construction dollars, that we are seeing those investments as multipliers? That is, how do we create actual opportunities in communities for jobs? Not in the operations and maintenance, certainly that is important, but just in the material construction.

And I say this because there are ways to ensure that as we are doing high road construction and we are doing it with regulated apprenticeship opportunities, local and targeted hiring, construction careers opportunities that take these resources and can multiply them by one, building the housing that we need, but two, creating good jobs in the community that actually bring some of our low wage communities into, again, proximity with the campus through an actual construction job.

So, curious as you're thinking about these projects, what are the mechanisms that we are using? Tools like targeted local hire, that we are using construction careers policies and certainly building partnerships with the building and construction trades, training and skill models that will actually use these dollars and multiply them to build the houses, but also to give residents who may not ever step foot on that campus as a student, but give them an opportunity to benefit from that campus.

Is this a system wide model that we're thinking about? And I say this because in this moment we're in a deficit and every dollar we spend has to be multiplied. It has to do more than just its intended function. It has to also address issues of economic equity, racial equity, and then of course, solving this housing crisis that we are all in.

President Drake.

So thank you, and agree with that. And we have a program that looks to, in fact, bring in to diversify the people who are working on our projects. Our hospital construction is an area where we're very actively moving forward, and I don't have on the top of my head the details of how those community-connected programs are part of that building.

But that was the case with our Aggie Square construction here in Sacramento and is the case, I know, with the project at UC San Francisco where we're having a new hospital that's being built, that finding local and diverse contractors and others to work on those projects is a really important part of what we do. You mentioned never set foot on campus as a category of people, and we were speaking earlier. We have just under 300,000 students, but we have about 230,000 workers, faculty, staff, employees.

So we are a major employer, and we think of that as a big part of our impact on the State of California, and providing good job opportunities for people who are not our students is a wonderful thing and something we do every day and care a lot about.

Yeah, no, I'm thinking of places like UC Riverside, for example, and I know if you go a few miles from that campus, you get communities that are actually in recession where you have unemployment that's already hit about five and a half percent. When you get--that's an indicator of recession when you have unemployment that's going above that four percent mark.

And I really appreciate--and that's why we talked about making sure that there's enough base increase to cover salaries, cost of living, because we know the power of the economic engine of the UC, but even with that, there are continuing higher numbers of folks, and in my district in particular, the majority of some of the workers in my area are low-wage workers.

When you just look across the board, there are more folks in low-wage, unregulated jobs that are--folks are piecing together to make it. And so for me, it is an opportunity, and we know this is true across so many districts that my colleagues represent.

So I'm just curious about the way to standardize a model that ensures that there is a targeted local hire opportunity that helps the state really safeguard our communities against recession by using these dollars that help to reach those most marginalized workers to give them entry into this construction opportunity and hopefully a construction career.

Great. Agree, and let me say that I'll make sure we get information to you on what we're doing there and love to talk with you about ways we can do more.

Great, and then my last question, and I'm sorry--

We've got to move it along. We got to be out of here about 1:30. We still have public comment and four issues.

Can ask one quick question, Mr. Chair, and this is about how--

Then it will have to be a quick answer.

It will be quick. It will be quick. UC recently invested 4.6 billion in Blackstone Corporation, and in my district and across the state and the country, we know that Blackstone is involved in raising rents, evicting tenants, and disproportionately impacting communities of color, and so I wanted to really understand what strategies could UC use to make housing more affordable, but also to make sure that we're not investing in corporations that are feeding into the housing crisis, and particularly communities of color.

I'll give a quick answer, given the time. I understand that this was an investment made by our treasurer in sort of protecting the endowment and retirement savings of our workers, and so it's important from that perspective, and that's how it was looked into, and we have thousands, of course, of entities that we invest in to help manage that larger retirement pool, but I will say that I think that this isn't also an opportunity to work with those people.

This was a substantial investment, and the substantial nature of it gives us an opportunity to work with the company to help modify and move their policies toward things that we would like better, and we will continue to take that opportunity.

Is that a formal agreement or how do you envision that?

Yeah, the treasurer is--the Treasurer's Office is where this came from, and in his initial discussions, he mentioned with them the opportunity to work closely with--and actually, this particular group came to our regents' meeting to testify and what their plans would be, so they had a formal presentation on the ways that they were trying to do things to be a responsible community citizen, understanding the challenges that that broad industry can present.

Well, I look forward to hearing more about that and figuring out ways that as we're trying to build housing, and particularly affordable housing on one end, we don't want UC investments helping to drive the eviction and raising rents in communities of color on the other end. So I appreciate that and looking forward to following up.

Thank you very much. I know Senator Min has a quick comment.

And I will just keep it brief, and I won't ask any questions of this panel just because we do have time constraints. I do appreciate you all being here today and for your patience and answering our questions. I just want to reemphasize the comments I made about CSU. I just think housing is something where we should not be delaying these investments right now. This is a crisis in many communities, including even in Irvine, where I represent UCI's, you know, President Drake.

We have homeless students and housing-insecure students in Irvine, we have a dearth of affordable rental housing, and this is not unique to Orange County. Obviously, we see this across the state, and I think we just need to make sure that we emphasize that you can't learn if you're worried about where you're going to sleep on a particular night.

And so would just want to emphasize that we should continue pushing forward on building out as much affordable housing as we can in this budget and beyond, even in a budget-constrained year.

Thank you very much, and thanks, everybody, for that discussion. We're going to move to Issue 1D, the last of Item One: the pathways to UCLA proposals. We'll begin with President Drake, go to the Department of Finance, and then go to the Legislative Analyst Office. So, President Drake.

Thank you, Mr. Chairman. Transfer students are central to the university's identity. Nearly 30 percent of UC undergraduates are community college transfers, and they represent an important part of our goals to expand access and improve academic excellence and achievement. The university is committed to providing opportunities for California's community college students. We provide advising, academic enrichment, and online information for students from as early as middle school all the way through the community college to help them plan and prepare for transfer.

In addition, UC campuses are required by statute to follow and remain committed to a goal of a two to one target ratio of admitting one transfer student for every two freshmen. These efforts have had a positive effect. Between 2014 and 2021, the number of community college applicants to the university increased by a third. Meanwhile, the number of community college students admitted to the university increased by even more, 36 percent during the same period. We've also made significant strides in increasing the diversity of our student body.

In the last decade, enrollment of students from underrepresented groups has grown much faster than overall enrollment. Unfortunately, community college enrollment declines are beginning to affect the size of the transfer student pool. As you know, there are significant decreases in community college enrollment across the country. Community college transfer applicants fell by over 15 percent during the last two admission cycles, a trend that reflects that reflects disquieting declines in community college enrollment nationally. The Governor's transfer-related proposal is directed specifically at UCLA.

A few words about UCLA: currently, UCLA has the highest rate of transfer applicants systemwide, and its student body is composed of the largest proportion of community college transfers of any of our campuses. UCLA's application review process also results in admitting and enrolling a transfer class with greater diversity than its freshman entrants. This may seem unremarkable, but it is not the case for the university at large, where the freshman class is more diverse, sometimes substantially, than the transfer class.

The University of CalNet seems counterintuitive, but I can talk more about that if we need to. But at UCLA, in fact, the transfer review process results in admitting and enrolling a transfer class that is more diverse than its freshman entrance class. The University of California appreciates and is in line with the Governor's intent to improve the transfer experience for community college students. We look forward to developing solutions with the Governor and the Legislature that streamline and improve that transfer process. Thank you.

Thank you very much. We'll go to the Department of Finance.

Gabriela Chavez with Department of Finance. Particular to the University of California Los Angeles, UCLA, as a condition of receiving 20 million of a state General Fund through the UC campus allocation model, the Administration requires UCLA to participate in the UC Transfer Admission Guarantee Program, TAG, and to offer associate degree for transfer program pathways to students seeking to transfer from a California community college. The Administration is committed to increasing student access to higher education, affordability, and equity.

This proposal further increases access to students and promotes better alignment in our public higher education institutions. In response to this proposal, the University of California has been actively engaging us and the Legislature on policy solutions to achieve these goals. These conversations are ongoing. We welcome UC's proposals and look forward to continue working together to increase access to higher education for all Californians.

Thank you. Legislative Analyst.

Ian Klein with the LAO. Our comments on this agenda item begin on page 24. We recommend that the Legislature reject this proposal and adopt a more holistic approach. The Governor is attempting to ease the transfer process. However, the singling out of one UC campus sets poor policy precedents. As the President just indicated, UCLA currently accepts the highest number of transfer students than any other UC campus, as well as having the lowest freshman to transfer student ratio.

Secondly, this proposal focuses solely on inputs, the adoption of this transfer policy, rather than outcomes, which would be the academic success of their students. If the Legislature would like all UC campuses to participate in certain transfer programs, as the Governor's proposal would require UCLA to do, we would encourage it to coordinate with UC on how to best navigate the associated academic transitions. Thank you.

Thank you. Let me just quickly ask the Department of Finance--and I run the risk being the only non-Southern Californian on this Committee and having a ledge director with the UCLA pennant up in our office--why did you choose UCLA, to the exclusion of the other campuses, to do this, particularly since it has the highest rate of--highest number of transfers now?

The Administration has long worked to increase the number of transfers and to facilitate the student transfer process to four-year institutions. We have full confidence and that the UCLA is equipped to implement the policy and we're looking forward.

No, I know you're in favor of transfers, but you picked the one that has high level--why did you do that to the exclusion of others?

The policy seeks to increase diversity, equity, and student access to higher education. UCLA enrolls far more students from Santa Monica College than it does from Los Angeles College. That's just one example, and we're looking to remedy this issue.

Okay. Well, I'm going to let Senator Smallwood-Cuevas in a moment follow up on that if she wants, but the other question is, if this is intended to be a pilot, how would you take the information you learned from this, extend it to other campuses, and what do you envision for that if this was actually done and is successful?

We're looking at the proposal and see how the proposal could serve as a basis to improve alignment between community colleges and the UC and further pursue it for a greater access and equity in higher education. We will make further assessments regarding our approach to this policy as we learn more.

Okay. I think there's still some work to be done on this proposal, but let me ask Senator Smallwood-Cuevas about if she has a question or comment.

No, the one comment I want to make is there is such a geographic diversity of our community college systems, some urban, some suburban, some might even describe somewhat rural in nature, and then, you know, this dynamic university. And it's always been troubling for me, the Santa Monica College has been the one that is--I mean, overwhelmingly, what is the percentage in terms of the share of transfer students? I mean, it's a pretty significant--

I think, I'm willing from the Chair to stipulate it's high.

No, it keeps going.

It's--

It's extremely high. But then when we look at some of the other campuses, particularly when we look at those campuses that have some of the most lower income and more of the racial diversity, and particularly like returning citizens from prison, for example, and single parents, those campuses are where we're not seeing as robust transfer and participation. So I appreciate that UCLA has been identified as a campus for doing this, and I don't think it--it is because of its success in transfer, but also its challenges in reaching those campuses.

And if we can fix that, I think there's a lot of generative information to come out of that for the rest of the state. I want to ask, in terms of this investment, what are some of the administrative challenges that may exist in terms of really partnering with the diverse number of community college campuses?

One of the things I struggled with when teaching a class at UCLA and trying to build partnerships with some of the community colleges is just, in many cases, there's very limited communication between both campuses. Tremendous work by the community college partnership team, but obviously their resources and capacity is limited. When you have to sort of break through some of the articulation issues, how do we make sure that these students can actually apply their credits from that campus to our enrollment?

It becomes sort of an administrative nightmare to try to actually build those kinds of partnerships. So I'm curious how this will help break down some of the administrative silos that keep our systems separate, and what is the intentional investment in that community college partnership in expanding that so that there can be more relationship building, particularly for those campuses that have some of the lowest transfer rates in the system?

Yeah. So I'll make sure, again, you ask questions that are longer conversations, so I appreciate that. I'll look forward to--

And if you wish to answer really briefly and defer to a longer conversation, that works, too.

Let me answer really briefly and defer to a longer conversation. The really briefly answer is that we are working with the Governor's Office on an outcomes-related approach to doing what we can to increase--to facilitate transfer and to increase the diversity of schools that students are transferring from, and this was not our proposal. So we are working with the Governor to get to something that will get to the outcomes that we wish, which are actually the same as the outcomes that you are stating.

Look forward to hearing more.

Thank you very much. They said, 'and no new money.' I can't tell if that's going to reopen it, but that's what was said. Senator Min, any questions or comments? None. Then let me thank you very much for this, and let me in particular thank President Drake because I know that completes your time here, and you were very generous with the extra time that was taken, and so thanks for being here.

Very good to see all of you, and I know that we'll connect and talk at the end.

Perfect. Thank you. Just what I was going to say is I know there will be some continued discussions. Okay. Thank you. We're going to move to Issue Number Two: delayed capital outlay support. We have Gabriela Chavez from the Department of Finance, Ian Klein, and Seija Virtanen from the University of California. We'll start with the Department of Finance.

In an effort to address the state's current fiscal challenges, the Governor's budget proposes to delay three projects in the 2022 Budget Act as follows: delay 200 million, 100 million in 22-23 and 100 million in 23-24 of the support for the construction of an Institute for Immunology and Immunotherapy at UCLA. This is delayed to fiscal year 24-25.

The late 83 million to support the UC Berkeley Clean Energy Campus Project currently planned for fiscal year 23-24 being delayed to 24-25, and to delay 83 million to support the campus expansion projects at UC Riverside and UC Merced, which are currently planned for fiscal year 23-24 and are delayed to 24-25. The Administration is committed to supporting this project. The delay funding makes it impossible for all projects to receive the appropriate support.

Thank you very much. We'll move on to the Legislative Analysts Office.

Ian Klein with the LAO. Our comments on--or first, I'll start with the projects identified on pages 26 and 27 of your agenda highlight the projects that have been delayed. We recommend adding the UCLA Institute for Immunology and Immunotherapy to the budget solution list. There is currently little project information available on the project scope, cost, ownership, and operations of the facility. We also recommend adding the UC Merced Campus Expansion Project to the budget solution list.

This is based on enrollment projections as this project does not serve an immediate campus need. If the Legislature does wish to move forward with one or both of these projects, we would recommend sweeping their 22-23 funding, as neither project has demonstrated a need for funding at this time. Regarding the Riverside Campus Expansion Project, facility utilization reports provide stronger justification for the construction of this project. However, we recommend funding this project utilizing university bonds instead of General Fund.

Most projects of this scale are debt financed, which spreads the cost over many years. This will increase the project's cost in the long run due to interest payments, but would provide immediate General Fund relief. Regarding the Berkeley Clean Energy Campus, we recommend UC provide more information to the Legislature for this project. It's currently unclear how much additional General Fund will be needed to complete the project, as well as the associated energy savings that would be generated from the project upon completion.

At a minimum, a full financial plan should be provided that identifies the project's costs, energy savings created, as well as climate-related benefits by year, and if there is a sound financial plan for the project, we would also recommend financing this project utilizing university bonds. Thank you.

Thank you very much. And the University of California.

Thank you, Chair Laird and Members of the Subcommittee. I'm Seija Virtanen for the University of California. I'll take just a few minutes to describe these projects to the Committee. All of these projects received funding in the current year and have had funding proposed to be delayed to the 24-25 fiscal year. The UC Merced and UC Riverside projects are campus expansion projects which will support increases in enrollment. Both the campuses need the delayed 2023-24 funds in order to continue with their intended projects.

UC Merced plans to construct a classroom and office building for three for an estimated total project cost of 68 million dollars. The building will provide new classrooms, faculty office space, and research space for the campus to begin offering 20 new undergraduate majors in the next five years. The construction of this project is necessary to increase the campus's instructional capacity by increasing the inventory of large and medium-sized classrooms, which are necessary to initiate significant large undergraduate major programs.

The building will include 35 new faculty offices, allowing the campus to hire necessary faculty to launch new majors. The expansion of available majors will allow the campus to attract more students and expand enrollment to help reach the systemwide enrollment growth goals. UC Riverside campus expansion would construct the Undergraduate Teaching and Learning Facility for an estimated total project cost of 154 million dollars.

The project consists of 900 classroom seats and critical class, lab, and studio spaces that will serve thousands of UC Riverside students on a daily basis, enabling the campus to increase course availability, reduce time to degree, and facilitate enrollment growth. The campus projects that this facility will allow for increased enrollment of up to 3,000 students.

The campus needs the funding certainty to move forward with the intended design build procurement for the project. The UC Berkeley Clean Energy Campus Project received 83 million in the current year and was proposed to receive another 83 million in the budget year. That additional funding is now being delayed and the Clean Energy Campus Project will--

Recommend it to be delayed.

Recommend it to be delayed and I hope that it will not be. The Clean Energy Campus Project will replace UC Berkeley's natural gas-fueled cogen plant that supplies 90 percent of campus energy with a Clean Energy Microgrid. That's what they're going to replace it with, the Clean Energy Microgrid. The Clean Energy Campus Project Engineering and Design Studies are near completion and pre-construction designs will be completed by the end of the year. Construction is ready to begin in 2024 on the first two project phases.

Phase One alone will achieve 200 million in avoided costs associated with the upkeep of the old plant and the aged steam system. Phase One will reduce the campus fossil fuel combustion by 85 percent and achieve a 70 percent reduction in related campus carbon emissions. These substantial reductions, combined with biomethane credits will move UC Berkeley.

We heard these proposals last year. We know a lot about this.

Okay, I will move on. I just want to mention about the California Institute for Immunology and Immunotherapy that it's going to be a multidisciplinary research institute utilizing biotechnologies to study immunology and immunotherapy. The institute was developed in close collaboration with a large number of constituents, including leading scientists, doctors, academics, and philanthropists, and the land for the institute will be provided by UCLA.

To date, over two million dollars in private philanthropic gifts have been spent on the institute, including drafting the affiliation agreement between the nonprofit and the university, and then some scoping plans. The UC regents will consider this project in an upcoming meeting, and should the funding be provided by the state as anticipated, the project will be ready to bid as a design-build construction in the summer of 2023, and we request that the Legislature support these projects. Thank you for your time.

I think in the interest of time, I'm going to make a comment, and that is, I would have probably, if we had more time, pressed why UCLA was still in the budget and the other three were delayed, and you know, in many parts of life we have to love all our children equally, and UCLA got the break in the last one. UCLA is getting the break here. Some of the others might actually have cost benefit.

The cogeneration might not just be climate benefit, but cost generation to the budget. The Legislative Analyst has made very detailed recommendations, although I don't want to give people heart attacks that are listening because we have heard from advocates for different proposals, but it seems to me that if they're going to be reductions, and we probably--our preference would not be to roll them forward--we'll have to look at all these different factors and try to make a decision.

Let me just ask if there are comments or questions from my colleagues before we move on. Pardon? Okay. They're both good, so thank you very much. We're going to move to Issue Number Three, which is--although I know that Mr. Klein might even want to stay here because he's coming back for the next one--Issue Three: University of California and its oversight on three different programs that were in last year's Budget Act.

Thank you, Chair Laird. I want to thank the Legislature for investing in the University of California, our students, and our innovative research as a means of developing solutions for California. Let me first start with the climate initiatives. The current year budget provided 185 million dollars of which 100 million was for research grants and innovation, while 85 million was distributed to UC Merced, UC Riverside, and UC Santa Cruz for climate initiatives on those campuses.

Out of the 100 million dollars so far, 15 million in climate innovation and entrepreneurship funding was disbursed with one million provided to each of our campuses, UC Health System, UC Agriculture and Natural Resources, the UC statewide Natural Reserve System, and the UC affiliated Lawrence Livermore and Lawrence Berkeley National Laboratories, the seed climate-focused research and innovation funding. The remainder of the 100 million in grants will be divided into smaller seed grants and larger matching grants.

The seed grant applications were due on April 6th and awards will be made soon. The matching grant projects are envisioned to be larger in scope and potentially includes teams comprised of affiliates from multiple universities. Those applications are due on May 4th. The UC Riverside campus received 47 million dollars for campus climate initiatives, which they are spending on the OASIS Park Clean Technology Innovation Center. So far, the campus has spent just under six million dollars on that OASIS Park project.

The UC Santa Cruz campus received 20 million dollars for campus climate initiatives, which they are using to establish a center for coastal climate resilience. The center has identified five million in coastal resiliency projects that the center will lead. They have established five graduate student fellowships to work on coastal climate issues, and the center is developing a decision support tool to access future coastal climate risk and the value of nature building and resilience, among other projects.

The UC Merced campus received 17 million for climate initiatives, of which nine million is in the process of being awarded as climate action research seed funds. Those awards will be announced on April 30th in just a couple of days. Merced is using another six million to start the UC Merced Institute for Climate Research and Equity, which will study green energy, wildfire adaptation, and social justice issues. Now, moving on to the--

And before you move on, maybe I can make a quick question that just clarifies that subject, which is you went through the long list of where they are, but they all seem to be in process. It's not like a single one of those has done an appreciable amount of work to be able to evaluate at this point that the report on the oversight is that you've taken very seriously this how you've done grant processes that are moving it out the door, but it's not like anybody that's received a grant, if they have some--you just announced the awards have done an appreciable amount of work yet.

That's correct. We took a careful amount.

You don't need to expand. That's correct. Was enough. So basically, you reported on how the money's moving, but there's not a real set of outcomes to talk about.

There are no outcomes yet. I hope next year to report more on what the outcomes may be.

Then we will move on to your second one. Go ahead.

I can wait till she's done too. So I think this is really important, and I didn't hear and maybe I just missed it, any decarbonization or energy site proposals and I know there's 100 million dollar pool you're still looking to allocate, but I just want to emphasize the importance of that. I think this is a very important research initiative.

I also wanted to ask a question. In my meeting with President Drake earlier this month, he mentioned that a lot of this money--and I just wanted to understand if this was correct--was actually going to go to electrification projects and not to direct research. And is that your understanding as well?

No.

I think that you might be confusing the previous item with this one because some of those other projects--

No, I think he said climate research funding, but it might have just been a misunderstanding. No, I'm not talking about--

Then you can clarify.

We're taking some of our deferred maintenance funding and each campus received a few 100,000 dollars to do an electrification study, but that was our deferred maintenance funding.

And that's different than what you just went--

Exactly.

This funding is all going to research or research-related grants and projects. Is that correct?

Exactly. On climate and climate innovation.

Which he said last year he really wanted in a year's time at which he was irritated at us for potentially pushing into research.

Thank you.

Okay. Then let's go ahead and let you report on the foster youth.

Okay. So it's a student services appropriation received in the current year. The Legislature provided six million in ongoing for former foster youth services, and these funds were distributed to campuses, with each campus receiving a base allocation of 250,000, and the remaining funds were distributed based on the estimated number of former foster youth at each campus. Having received these funds, so far seven campuses have hired permanent staff to serve former foster youth, and three campuses are in the middle of hiring.

Also, seven campuses have identified permanent space for a center on campus and three are still working on establishing a permanent center. The other student services investments in your agenda is the Underground Scholars Program. This investment is to provide services for previously incarcerated or carceral system-impacted students.

For this four million dollar investment, all nine undergraduate UC campuses received state funding to support the implementation or expansion of an Underground Scholars Program, with a base allocation of 250,000 per campus and additional equity-based funding allocated based on the percentage of undergraduate at each institution. Today, seven campuses have operational Underground Scholars programs. These programs were in place prior to the allocation of state funding, but now they're permanent and two campuses are in the process of establishing their programs. Four programs have hired full time employees.

The newest programs have been able to identify physical space on their campuses and begin the process of hiring their first full time staff members. Two campuses also developed and convened advisory board comprised of partners in academic advising, basic needs, housing resources, and financial aids and scholarships, research, and first-generation support. A sample of activities to date include disbursement of basic need gift cards for groceries and gas, workshops on financial wellness, mental health and career readiness, partnering with community colleges and high schools to host informational sessions.

Some used resources for conference attendance for students, student staff, and staff to learn about equity-minded ways to support carceral-impacted student success. And again, I want to thank the Legislature for these student services funds, and I'm available for your questions.

Thank you, and I think Senator Smallwood-Cuevas had a question about--

Yeah. I just wanted to check in on the--you mentioned the ongoing funding. Can you say more about that, particularly those campuses that have staff and are starting to move program?

Yes. In the current year, the Legislature provided six million dollars ongoing, specifically targeted at foster youth programs. Our campuses had had foster youth programs paid for with sometimes grant funds. There were temporary funds, some donations, but they had not had dedicated staff for this purpose. The Legislature also provided the university with four million in ongoing permanent funds to serve Underground Scholars or carceral system-impacted students. In that category, we had had some campuses that had started small programs.

UC Berkeley had previously received a one-time allocation from the Legislature to initiate a program, but these programs did not have permanent ongoing funding. And what the lack of permanent funding does is they have trouble retaining staff because they can only hire somebody on a one-year contract or a two-year contract.

By having the permanent funding, they can have a staff member who will stay for years knowing that they have employment guaranteed, and that staff member can then build up the knowledge to really serve the population of that campus.

And just to clarify, do you all have a sense of what that costs, and not just for UC Berkeley, but across in terms of the plan for the Underground Scholars that each campus has presented in terms of what is the actual dollar amount that UCs need to ensure, that those programs have capacity and can continue and not be in that situation of not knowing beyond the one year if they will continue?

At this point, the four million for Underground Scholars will continue and the six million for the foster youth will continue. In terms of what is the real need, ultimately, on Underground Scholars, we don't yet know because we don't have a student tracker for formerly-incarcerated students. So we really need to establish these centers and have the knowledge of them get out to the student population so we can start collecting numbers of students who desire to be served through that center.

For former foster youth, there is a box they can check on financial aid because the university does have a program that if someone spent time as a teenager in foster care, we waived their tuition in full. So we asked them if they were a foster youth. And that's why we have some foster youth numbers for the campuses. So we do have an understanding. We have about 1,800 former foster youth in our system.

Whether or not the six million will be sufficient to serve them and all their needs remains to be seen as we gain a greater understanding of what this population needs in order to be able to succeed, and as we intend to gather information about the services they request and how we are serving them, and then reevaluate in three years how those funds ought to be balanced between our campuses for the greatest equity and whether or not we ought to be contributing different funds in order to supplement those services as well.

And you are adding a box or tracker for the Underground Scholars?

No. We have no intent to ask our incoming students if they have been incarcerated.

But you will make some kind of measurement based on how many people participate in the center.

Right. We intend to ask them. As they come into the center, we intend to track them, but we don't want to scare students from applying by asking them on their application to the university they have been previously incarcerated.

Oh, sure. Once they're inside of the system, whether it's health care, food, whatever it is, a way to sort of see that population and to be able to identify--

It's really in the centers, right? Not in--

Yes. It's through the center.

It's really in the center.

Yes. Through the centers. Yes.

Does that complete your question? Thank you. Anything from Senator Min? And let me make a closing comment on this that I really appreciate the questions from Senator Smallwood-Cuevas, but I don't want that to take away from the fact that we strongly support both of those last two programs and want to see them be successful, and we will continue to work on all the things that are underlying there. So thank you for the update on the oversight items.

We're going to move to our last issue of the day, Issue Four: the Governor's proposal for the State Library. We have Jennifer Louie from the Department of Finance, Ian Klein from the Legislative Analyst Office, and Greg Lucas, the California State Librarian. And we are going to take people in that order.

So we're going to begin with the Department of Finance, go to the Legislative Analyst Office and then go to the State Librarian. Welcome all of you, to the Committee.

Good afternoon, Mr. Chair and Members Jennifer Louis with the Department of Finance. The State Library's augmentations for the Governor's Budget are continuation of the Administration's emphasis on access, equity, and innovation. The Governor's Budget includes the following four proposals, $462,000 in ongoing General Fund to support and expand the Whitkin State Law Library for personnel support and operations.

The second proposal is a General Fund increase of $597,000, of which 357,000 is ongoing, and $240,000 is one-time, respectively, to expand the California history room, special collections, and personnel support.

The third proposal is $168,000 ongoing General Fund to support the State Library audit program and lastly, a 100 million one-time General Fund shift from the 2022 Budget Act to the Local Library Infrastructure Program that shall be reallocated over a three-year period with 33 million one-time General Fund in 24-25 and another 33 million one-time General Fund in 25-26 and 34 million for the third year in 26-27. With that, I shall conclude my presentation, and I'm available for any other questions.

Thank you very much. Legislative Analyst.

Ian Klein with the LAO. Our comments on the Wicken State Law Library begin on page 35 of your agenda. We recommend the Legislature reject this proposal. There is no clear justification for replacing special fund support with General Fund support. Furthermore, while the workload has increased for the Law Library remains in line with job expectations.

Though staff hours spent on research have increased, the average share of time each librarian spends on research remains below 40%, which is the target level specified by the State Librarian Job Duty Statement. However, we recommend that the Legislature consider increasing the share of the civil appellate filing fee that is deposited into the state law library special fund. The amount of civil appellate filing fees deposited into this fund is up for reauthorization in 2025.

The Law Library has not had an increase in this set-aside rate in more than two decades. Moving to the California History Room, our comments there run from pages 35 and 36, and we also recommend that the Legislature reject this proposal and revisit when the state's budget condition improves. We do acknowledge that there are shortcomings in the special collections portfolio, as well as identify that the workload for the California History Room has fluctuated recently, both in terms of requests received and hours spent on research.

However, the current year's data is more in line with levels that were seen pre-pandemic. Additionally, other funding sources exist for special collections acquisitions, such as federal funding and foundation funding. When the budget condition improves, the Legislature could consider potentially funding a senior librarian to work on outreach and collections. As such, we recommend the Legislature continue to monitor librarian workload.

When fiscal conditions improve, one-time funding could be provided for collections, but until then, we recommend the history room utilize non-General Fund sources for purchases and acquisitions. With respect to the audit program, our comments can be found on pages 36 and 37 of your agenda. State law requires that agencies have internal controls, and the State Library currently utilizes its executive management team to complete this function.

Additionally, state law identifies that agencies with an ongoing budget of greater than 50 million should consider establishing an ongoing audit program, and this proposal would accomplish that. However, a strong case has not been made for this proposal. The State Library is $1 million over the $50 million threshold at which an agency is to consider establishing an ongoing audit program. Of this amount, less than 25 million is associated with ongoing General Fund support for local assistance programs.

New ongoing positions may not be necessary in the long run, as much of the recent large increase in General Fund support for local assistance programs is for one-time initiatives with funds that must be expended by the end of the upcoming fiscal year. The State Library has also recently seen an increase in staff over the past five years, with 20 FTE added in the 21-22 Budget Act and 17 and a half added in the 22-23 Budget Act.

So perhaps redesignating existing personnel would accomplish the same end. So we provide two recommendations. The Legislature could outright reject the proposal, and the State Library would continue relying on existing staff to conduct their audit functions. As to date, no instances of fraud have been identified. A second option would be to convert the requested position to a term-limited position that would focus on ensuring that the local library infrastructure grants are used in accordance with state intent. Thank you.

Thank you very much. And now we will go to the State Librarian who's just been waiting for a very long time to have-

This was a terrific- Greg Lucas State Library. That's a terrific hearing this morning. I learned a lot about UC. UC, which has a study that says there's 230 languages and dialects spoken in this state, which is just sort of mind-blowing to me. And the more State Library can be-

It's so tempting to say that at least 10 of them are spoken by either the LAO or the Department of Finance alone.

I don't really have anything to add to what the LAO or the Department of Finance has said. I can answer questions if you want.

Okay.

Mr. Chair.

I really appreciate that and thank you for the two agencies just bearing with that last comment. I think that some general things to state and one question for the librarian, and that is that the grant program for library infrastructure has just proved to be overwhelmingly popular and utilized. And I know that it is a small amount of the remaining amount that is proposed to be deferred.

Are there applications that are not being funded now that the last remaining tranches of this would go to? Or would it open up for additional applications above what's already gone out the door?

In brief, the Building Forward grant program, the Governor and the Legislature put in $489 million. We made a conscious decision last year to, when we opened it up for applications, to not spend the entirety of the money because of the structure of the program, which says we are supposed to concentrate on the least resourced, the most dire conditions in the least resourced communities. And so telling you what you know already, but in many cases, those are the very entities, right? That can't pull it together in the time for a one sort to get an application together, right? In a short period.

The delay actually works to their benefit because they can get underlying things together.

Well, precisely.

You know we don't like the delay.

Right. But so the capacity, let's say, of Modoc County, right, to pull together a project and get it together is significantly less than, say, LA County. But, at any rate-

And conversely, they probably want less money in Modoc County.

That's true. Less libraries, right? So there's 175 million available now for this year. The application process is open. It closes on May 12th or May 18th.

We sent out a communication to libraries saying, do you intend to apply? And so the response we got back, I forget how many responses we got back, but the total that we expect in requests for this 175 million that remains is somewhere between 600 million and $1 billion. All of the estimates and studies over the past three years show about a $5 billion need statewide to make the renovations, modernizations, or replacement of the state's 1,127 libraries.

There's also, again, I'm telling you what you know already, but there's a local match requirement, so the dollars that the state put in, in essence, get doubled by the investment locals.

We're virtually out of time, so I don't want to dwell on this, but one of the questions over time I've had is whether the match requirement pushes some people out that might be the ones that are the most underserved people.

Well, that was a concern that the Legislature and the Administration expressed. And so that- some of those match requirements have been changed to address that very issue you're describing.

Okay, then my other question is, without getting too specific, there have been some organizations that have run into fiscal problems that have holdings that are research holdings or collections that are very consistent with the State Library's functions. If some long-term organization in the state is sort of going under and wants to partner with the State Library, what capability do you have to do that? And do you need an appropriation to take those kinds of things if it turns out there's something like that that presents itself?

Well, yes is sort of the short answer. It varies on what the specifics are of that. Storage is becoming an issue now, not just for us, but for the state archives and other state agencies. And we've had some conversations with finance about figuring out some sort of a long-term way to address that.

But adding things to the state's collections, there's not a cost to do that, per se, but there is to share whatever those collections are, right? To digitize them, to put them online, to put them into the catalog, all the things that libraries do.

I think that the thing is, I'm just not willing to share the one that I'm aware of. I don't think it's my role to do that. But it's one of those things that requires some kind of commitment and probably requires some financial support.

And it is amazing because it's a collection of a very long period of time that's very innate to California. And I think that that's something I'd be totally interested in doing. But I don't think sometimes we're equipped in the mid-year to somebody come up with that and all of a sudden be able to turn on a dime. And yet you don't want those collections dispersed or lost or some of the things that have been historic. So I'm just raising the issue. So without naming anybody, people just know that there's issues like that floating out.

Yeah. I mean I'm always happy to talk to you more about it. And one of the things that impresses me about the team at the State Library is we're flexible and can move pretty quickly.

And on a personal level, I love all your genealogy work. It's not enough sometimes.

I know. We're trying to do better.

Yeah. Let me ask my colleagues if there are questions.

Just one brief question on the shortcomings of the special collection in California's History Room and this increase of $597,000 to address some of the needs there. What is the sense of investment or prioritization of dealing with the shortcomings, which basically says that a lot of underrepresented marginalized communities are not represented in the California History Room? And it's very difficult to find these artifacts. How will this be prioritized in the proposed increased funding?

Thank you for your question. There's a variety of different ways. I mean, the biggest priority for us is to be reflective of California's unique diversity. And there's elements within our collection that simply haven't been saying this badly, but put to the front of the digitization line, or there's boxes that haven't been opened and examined that are terrific collections. And we're now prioritizing that. I mean it's more having the capacity to do that.

And then there's sort of a hidden aspect to it, which is there's a name for it and forgive me, I've forgotten it, but it's like going through our catalog and making sure that how things have been named in the past are changed to reflect how we name things in the 21st century. So we have a lot of issues with, for example, Native Californian, Native American artifacts in the collection.

And is there sort of? When you say you're prioritizing, are you going to hire a staff person to-

Yeah, that's the ongoing aspect of it.

Got it. And it will be one person dedicated to the shortcomings.

I think it's one and a half isn't it? A bummer about being the half-person but-

Jennifer Louie with Department of Finance. So part of Governor's Budget Proposal includes three positions, three of these activities. Yes.

Thank you for that.

Thank you, Senator Min.

Even better.

Senator Min's good. So let's not take the length of this discussion as any statement in relation to what's proposed. We like the state library. We think you're doing a good job. I think we're interested in the grant program being dealt with in a good way and just want to continue to work with you on some of these other issues that have come up. And thank you for being so patient to waiting through the hearing.

Well, thank you, Senator.

I did notice isn't the full $100 million is in the Senate Democrats Budget Plan, right. Under that umbrella of infrastructure and Public Works funding?

Yes, it is. That's our statement to how we feel about it.

Got it.

Okay. Any additional questions or comments on this item? Seeing none. Let me thank you all the panelists for being here. And we're really tight on time, but I'm going to check on how to do public comment here. So could I ask for a show of hands of people that are in this room that were really anxious to make a public comment. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12.

And in a moment, I suspect we have a lot of people on the phone that we're going to have trouble getting to. So let me do a horrible thing. Let me have the 12 people line up, and if you can make a comment in 30 seconds or under with your name and your organization, we would be anxious to hear from you.

So welcome to the Committee, and I apologize that the time is short, and I appreciate the fact that you have all waited here to do this. Welcome to the Committee.

Thank you, Mr. Chairman and Members. I am Christina Dicaro, representing the California Library Association. I'll make this very short. I just want to thank this Subcommitee so much. Senate Budget Chair Skinner, Senate President pro tem Atkins, for your very strong support of the public libraries and the library infrastructure grants. We see that it's in the Senate Democrat plan. We are completely thrilled. This money has done great, great work across the state, and we look forward to working with you on this. Thank you so much.

Thank you. You managed to get almost to the 30 seconds after all. Welcome to the Committee.

Thank you. Kelly Brooks, on behalf of the California Association of Public Hospitals and Health Systems. We're here in support of UC's request for $1.8 million in ongoing funding for the DDS Aspire program, which would help diversify California's healthcare workforce by recruiting students from disadvantaged communities who are committed to providing oral health care to populations across the state who lack access. Thank you.

Thank you very much. We appreciate your patience as well. Next speaker.

Molly Maguire on behalf of the Campaign for College Opportunity. We have just one comment on the topics that came up today for the UC, and we have an area of concern on the ability of UC to meet its two to one transfer goal that was included in the compact. According to UC, there's been a 15% decline in transfer applications, and we would argue that absent reform, UC is unlikely to meet its transfer goals.

But rather than offering yet another transfer pathway to preempt more meaningful reform, UC can meet its goal by opting into the successful proven ADT pathway. Two year graduation rates are higher.

You can begin to wrap up.

With an ADT, we have several statistics we can share with you, and we urge the Administration and Legislature to consider these as the details of the UCLA transfer proposal are negotiated.

Thank you. And I'm going to give everybody the chance to revise and extend their comments and submit them to the Committee so welcome to the Committee.

Hi. Thank you. My name is Erin McCall, and I am a senior at UC Berkeley in Jury and Legal Studies. I am also a formerly incarcerated student and a student leader with the Underground Scholars Initiative. I'm here today first to express my gratitude for the $4 million ongoing allocation that our program desperately needs in order to continue our statewide expansion.

However, I would be disingenuous if I did not express that we have deep concerns about the methods that UCOP has used to allocate funds to our programs. Based on the activities that campuses reported to UCOP, it looks like many campuses are not implementing the underground Scholars Program model that is specific and it's proven to recruit students into the UC system.

Our program is based on recruitment, retention, advocacy, and wellness, and is made up of specific programming things like a transfer cohort, which has a 90% acceptance rate for admissions each year.

I've let you go way over because you've been patiently waiting. It's a discrete subject, so please let us know in writing if you have additional comments. Thank you for being here. Next speaker.

Thank you. My name is Danny Munoz. I am an Underground Scholar, graduating senior this year, and I am also a policy fellow with the Underground Scholars Initiative at Berkeley. I'd like to express my gratitude for the ongoing funding the $4 million is desperately needed for our organization.

However, we're asking that the Legislature honor the original budget language as signed in June, which required UCOP to disperse the full $4 million to UC Berkeley to allocate to the other campuses in partnership with the Underground Scholars program, directors and students statewide. This has been the way Underground Scholars programs were expanded before the funding was allocated by the state and at the Cal State and community college levels, the project Rebound and Rising Scholars programs are essentially coordinated statewide by people who have lived experience and professional expertise working with the student population. We ask that we get the same.

Thank you very much, and thank you for your patience in waiting.

Thank you.

Next speaker. Welcome.

I just wanted to start by saying thank you for your acute understanding of UC and its impact that it has had on all of us. I'm Amanda Puchot, the current Vice President of the Alumni Association of the University of California, which is a board of all 10 volunteer presidents of the alumni associations of each campus. I'm also the immediate past president of the Cal UC Berkeley Alumni Association.

So again, just wanted to acknowledge it's going to be a tough budget year and really appreciate all of your support. UC is that awesome social mobility tool, and it has been for me and I want to make sure that it continues to be for all of our generation.

Thank you very much. We appreciate you being here. Next speaker.

Thank you. My name is Keith Ellis. I am the AAUC treasurer with Amanda and a UC Regent. I just again want to express my gratitude to the Committee and the Legislature at large and to ask you to fully fund the governor's compact with UC so that way we can hire the next generation of UC faculty and staff. Also, I would just express support for UC Mercedes COB three building that is very much needed classroom space to get to 15,000 students by 2030. Thank you.

Thank you very much for being here in your comments. Next speaker.

Hi, like to thank the Senators for their time. My name is Jacob Fontana. I'm a grad student worker at UC Santa Cruz and I'm a member of UAW 2865. At UC Santa Cruz, 11 departments have implemented 25% to 50% reductions in graduate student admissions. The same story is playing out across the state, far beyond the adjustments that President Drake talked about. At the very least, Santa Cruz has promised not to lay off existing grad workers. No other UC has made that commitment.

And we should be clear, it's not that the University lacks the funds here. They invested $4.5 billion in Blackstone as 10 times the cost of our contract. Thanks for your time.

Thank you very much. Thank you for being here. I know the drive you made extremely well. Next speaker.

Yeah, my name is Luna. I made the same drive today from UC Santa Cruz. I'm an academic researcher there with UAW 5810 and I wanted to bring up that our unit, which is postdocs and academic researchers, is facing the same job cuts and misallocation of funding as the graduate student workers.

So what's happening is that the University is avoiding taking responsibility for delegating the budget, and therefore our bargaining units are getting pitted against each other, fighting for who gets the limited funding and who's to blame for these job cuts. But what we're asking for is that we shouldn't have to choose between high quality, fairly paid research, and keeping our coworkers from being laid off. So UC needs to fully fund and implement our contracts by taking responsibility of making a plan to allocate funds to the campuses and departments that need them.

Thank you very much. Thanks for being here. Our next speaker.

Hello, everyone. My name is Sergio. I'm a third year UC Davis student. I want to urge a Legislature to allow sufficient funding to provide additional resources for disabled students across the UC. Currently, right now, there are about massive caseloads up to 300 to 400 to 1,000 per disability specialists, causing month long delays in accommodations for disabled students, derailing their quarter or semester. Currently, right now at UC Merced, they don't even have an office. They have to rent a space.

Disabled students can't even have the privacy to request accommodations. There's not even a director, there's only one coordinator in charge of all accommodations across UC Merced. And how are they effectively able to deal with any other pop ups when they're too busy trying to provide accommodations for the entire school? So I just want to make sure to voice my support that you guys must fund disability student programs across the UC. Thank you.

Thank you very much. We appreciate your comment.

Hi, my name is or good afternoon. My name is Kyle Johnson and I'm a transfer student also at UC Davis. It's ironic that I'm actually speaking here today because just yesterday I was in class and one of my fellow classmates was talking to my professor. She had learned that DSP services didn't even contact her regarding her accommodations for her midterm that's next week, and I wish this was a one off issue, but it turns out it's a systemic issue.

As my peer just mentioned, some case workers for DSP services are having to deal with students caseloads of 300 to 400 and at some universities up to 1,000 students. It's impossible to imagine one person trying to manage that many accommodations. For those unfamiliar, accommodations provided by DSP services can be anything from braille services to captioning of lectures to physical accommodations such as stools and classroom accessibility.

So making sure that we increase funding for these types of programs at every UC campus is critical to making sure that disability students have access to an equal opportunity of education. Thank you.

Thank you very much for your comments.

Hello, Chair Laird and Members of the Subcommitee One. My name is Jose Cruzreau and I'm a student from UC Davis and member of the UC Student Association. I stand here today to speak on the importance of Cal Grant equity framework as I urge you all to make the decision this year to fund Cal Grant equity and to ensure 150,000 more prospective students have access to Cal Grant and thus are able to pursue their higher education without the worry of not being able to afford school.

Additionally, from these 150,000 students, over 3,000 more California Dream Act filers are made eligible for aid, and it will address eligibility gaps for over 11,000 black students and 95,000 Latino students who have been disproportionately impacted by the current limitations from Cal Grant in Cal Grant. I myself receive and depend on Cal grant and to continue my education. Without Cal Grant, I would not be able to afford school and pursue my education.

Thank you very much. We appreciate you being here. And just to repeat, just for your information, we had a hearing that was hours long on Cal Grant and student aid. That was a separate hearing, so don't interpret how brief the discussion was today for just our commitment on that and what we did. But thank you again for being here. Next speaker.

Hello, my name is Luca and I'm a student at UC Davis with a disability accommodation. I want to share my personal experience to illustrate the urgent need for additional support for students with disabilities across the California education system. In my first year at UC Davis, I've had a professor threaten to take 30% off my exam grade and settle for 15%, despite receiving a doctor's note and extend for extenuating his circumstances.

I've given up on using my accommodations after weeks of trying to work out logistics with a professor who gave his students hints to the test during class. And I've had a teacher forget to send important formula sheets needed to take the exam and eventually getting it halfway through the test. This is only the surface of what students have to put up with, and I can hope that in the next three years these are just the minor inconveniences that I have to endure, and it's nothing more.

It is important to note that disabled people make up the largest minority group in the country, with 26 Americans having some type of disability as well. Despite increases in the number of students disabled students in 2017, there's been no additional funding for disabled student programs across the UC.

If you can begin to wrap up.

Yeah, by allocating additional disability funds, we can ensure that students have equal opportunities to succeed and provide trainings to staff and faculty to ensure that they understand disability and prevent what happened to me. Thank you.

Thank you. And thank you for telling a personal story. We really appreciate it. Next speaker.

Good afternoon. Marissa Wu with UAW reading this comment on behalf of Stephanie Hurd, who had to return to their research lab. Stephanie is a graduate researcher and teaching assistant in biomedical sciences at UCSF and a member of UAW 2865. Across the state, UC has consistently failed to honor its obligations to workers. Since the ratification of our new contract, UC says that no one is losing their jobs over the increases in compensation and benefits they agreed to, but this is not true.

At UCSF, programs have continued to refuse to compensate teaching assistants for their labor, citing that our requirement to teach for a quarter in addition to our research is an academic opportunity. Our research is also an academic opportunity, but is compensated. Why should teaching be different? We ask you to hold President Drake and the UC accountable to its commitments to compensate workers and stop the cutting of opportunities for students. Students across all campuses and departments deserve to see this contract implemented fairly. Thank you.

Thank you very much. We appreciate you being here.

Hi, there. My name is Rebecca Diltz, and I'm reading this comment on behalf of Brendan Gonering, who's a teaching assistant in the Linguistics Department at UC Davis and a proud member of UAW 2865. The UC bargains our contracts centrally, but has abrogated its responsibility to provide central guidance on how to implement them.

As a result, my department has discussed cutting TA positions, including eliminating discussion sections for all of over 300 plus student introductory courses, and no longer offering positions to master's students or doctoral students who are enrolled after their fifth year in the program. This will affect me personally, as I am having to enroll for a 6th year to complete my dissertation and do not expect to receive any TA positions in my Department.

TA positions are an important source of income for grad students, so in addition to completing my research and applying for postdoctoral positions, I will have to hustle every quarter to make ends meet. Policies like this will further exacerbate the inaccessibility of graduate school for people from marginalized backgrounds and force students who face medical and other emergencies to drop out. As a public university, the UC is meant to be accessible to all and to benefit all. We're asking the Legislature to hold the UC accountable to its commitments to us as workers and to the Governor.

Thank you very much. And that completes testimony in the room. And I was remiss in not saying that support for disability student services is included in the Senate budget proposal. So hopefully, which, of course, means there's going to be a lot of debate, but at least we are advocating for it from the Senate side right now. Moderator, sorry you've been waiting so long without an ability to use your services. It's my understanding there's one person in line on the teleconference system. Is that correct?

We actually have three parties in line.

Then let's take all three for up to 30 seconds each, and we'll conclude the public testimony. Moderator, queue them up.

Okay, we'll start with line 31. Please, go ahead. Your line is open.

Hi, my name is Michelle Maxwell, and I am a student at UC Berkeley, and I'm also an Underground Scholar. I just wanted to thank you for the $4 million allocation that we got last year. And I just wanted to say that UC has been explicit that they are not willing to work with the underground scholars staff or meet regularly to discuss the implementation and growth of these programs.

Without the expertise on serving the student population or regular communication with the staff that do, it's unclear how they are qualified to administer these funds or lead program implementation. We are asking for the Legislature to honor the original budget language as signed in June, which required UCOP to disperse the four full million to UC Berkeley, and then we would then allocate to other campuses in partnership with the Underground Scholars program directors and students statewide.

This has been the way the Underground Scholars programs were expanded before the funding was allocated by the state. UCOP has undermined or our existing infrastructure and programs.

I'm sorry, I know you've been waiting patiently, but I let you go a full minute. Can you wrap up, please?

Okay, so having the funds will just help us implement the program in a better way that will serve our students better. Right now, people are not getting what they need on different campuses, and with us leading the funding allocation to the campuses, everybody would have what they need. Thank you.

Thank you very much. Moderator, next caller.

We'll go to line 36.

I don't know how you can even nervous about that.

Line 36, you're talking to somebody in the background and you're on the line for the hearing.

Apologies for that. My name is Alex Niles. I'm the President of the UC Student Association. I want to call in today to vocalize strong support for the Cal Grant equity framework. As students of the UC, we feel this is the best way to provide accessibility to California's most marginalized students.

And we are really appreciative of the Senate for vocalizing support for Cal Grant in the past, and we hope to see continued commitment to fully funding the Cal Grant equity framework as we move forward. Thank you.

Thank you very much. We appreciate your comments. Moderator, last speaker.

And we'll go to the line of 42. Please go ahead. Your line is open.

Good afternoon. My name is Michelle Andrews. I'm a fourth year student at UC Davis and the UC Student Association's Government Relations chair. I just want to uplift the asks that our fellow students have been making of funding the Cal Grant equity framework this year and providing more funding for disability services. Both of these are incredibly important to meet the UC's enrollment goals and provide more equity for students at the UC. And we just want to urge the Legislature to continue listening to students when we tell you what we need. Thank you.

Thank you very much. We appreciate your comments and appreciate everybody's public comment. That completes the public comment period and completes our agenda. And I want to let everyone know that we appreciated the participation. If you didn't get heard for any reason or you wish to add to your comments, you can do it in writing to the Budget and Fiscal Review Committee, or you can visit the Budget Committee's website. Those are always important to us, and we want to hear from you.

So I thank everybody for their patience and cooperation. We've concluded the agenda. The Senate Budget Subcommitee One on ED education stands adjourned.