Assembly Budget Subcommittee No. 3 on Education Finance

I wanted to, first of all, start off with all of you in sharing my personal perspective of where we stand as a state on the issue of education finance. And I cannot do that without reflecting on my personal journey as a product of our public education, of this great State of ours. I am the son of two immigrants to this country who came here without even a first grade education.

I'm the youngest of six, grew up in true poverty in Barrio Logan, which is one of the poorest communities at that time, was the poorest communities in San Diego. And I had the opportunity to attend San Diego State University, our public University in San Diego, Cal State system.

Sometimes I haven't shared this actually with a lot of people, but sometimes I think I wouldn't have been where I am today if it wasn't for the systems that were in place to allow me to get to that point. I was a high school senior applying to college. Actually only applied to one University, San Diego State. Even though I was a decent student, I didn't really see college as something in my life, given that no one in my family had ever been to college.

So I had the great fortune of having as part of my education someone, a counselor who encouraged me to apply to the University through the EOPS Program, early academic outreach program, I believe is the name, given that I grew up with very little means, really didn't have the money to actually apply. And I applied with a fee waiver, which was denied. My fee waiver was denied my application to the University.

And at that point I was just not going to pursue it because we didn't have, I think it was $55, if I remember the figure correctly, back in 1998. Luckily again, the systems that were in place, the counselor said, no, we can fight to make sure that you get this fee waiver because you really deserve it. And I was able to do so, accepted to the University and started that journey, the first one in my family to do so.

I just share that story with you because I hope that maybe as I shared my story, you maybe thought of a moment in your experience as a student of what higher education did for you. Because in a year when things are extremely difficult and challenging for everything that the state does, but education specifically, we are going to have some very difficult conversations, but we should never forget of why we're doing this.

We're doing this to ensure that people have access and opportunity, people who, maybe a background like mine, maybe a foster kid, maybe someone who has been unsheltered, maybe someone who, like myself, was an English language learner who really can excel, can get that opportunity that our great institutions of higher education, our three segments provide. And so I want us to approach these difficult conversations with the hope of what we wish to accomplish, which is increasing access and student success.

And the hearings will be difficult, but focused always on student success and on those outcomes. So the questions that you all hear, if you're presenting, if you're testifying, if you're a witness, please know that it's always going to be focused on that. And those are the expectations that we'll have in this Committee as we talk about higher education, increasing access and student success.

And that's why today's panel, and we start these conversations with students who should always be front and center of the work that we do. And we will be hearing from those students today to open up our hearing now to get to those difficult conversations, to give you a General overview. You've all seen the agenda, so you've seen some of the issues that we've identified, but I wanted to highlight just a few.

Certainly, we have some concerns as it relates to the funding to our UC and CSU system and proposals to defer funding and what that means. Under the proposal that the Governor has presented, the state will owe UC and CSU about $1 billion in ongoing funding next year.

The one thing I forgot to say, this is a budget discussion for this year, but we're also going to be talking it in context of the future years, because the worst thing we can do in a time like this is to try to quote our speaker of the Assembly to use short term solutions for some very long term problems. And our budget problems are long term.

So the decisions and the discussions certainly will be revolved around not just how do we solve the problems for this year, but the implications that that has for the following years. And this decision to delay this funding means $1 billion in additional funding starting next year in a $30 billion structural deficit. How is that going to be accomplished? We will talk about that.

We will talk about COLA for community colleges, but also we want to talk about what that means again for the long term in terms of implications. We're hoping to talk to all three segments today and throughout this spring about how we can protect the core programs and advance student success, access and outcomes in a difficult budget year. We will need to talk about segment reserves, so be prepared to talk about that if you represent a segment of higher education and how those reserves can be utilized.

And also, I'd like to have a conversation that's new about a Reserve for higher education for the future, for when we have these years in the future of how we can utilize a potential higher education Reserve account to help soften some of these difficult blows that we are being faced with. And also, we should mitigate, always look to mitigate the ups and downs of our state budget student enrollment. Declining enrollment will also be something that we will be getting into.

And obviously, this Subcommitee also discusses k through 12, but I'll Reserve my comments for the k through 12 system at our first hearing for that next week. So with all that said, I'm looking forward to hearing from our students today, from our segments, and certainly looking forward to hearing from my colleagues. And I'd give them the opportunity now if they wish to say a few words. Mr. Fong.

Mr. Chairman, and thank you so much, colleagues. As you heard from our chair, we're in a very challenging fiscal environment, but we also need to be remained focused on student outcomes and bringing the power and promise of higher education to Californians to expand access to students and families here across the state. And it's the power and promise of higher education, as you heard from the chairperson, it's the power and promise of higher education to transform lives.

My parents met at a community college in the summer of 66, and as immigrant communities and families, they were able to access public higher education. And so when we look at these challenging fiscal environments, we need to continue to be focused on the outcomes and bringing that power and promise here to students throughout our state and to really expand access and student success here in our state.

And so really looking forward to the conversations here today and really focused around Cal grant reform student housing, really looking at the issues around title nine reform as well. And we know these are going to be very challenging budget situations that we have going forward, but we need to do everything possible to continue to expand access for higher education here in California for our students and families with that. Look forward to today's conversations. Thank you.

Thank you, Mr. Fong, Mr. Essayli.

Thank you Mr. Chair. I just want to echo a lot of the concerns you raised. I think this will be a bipartisan approach to ensure students have quality access to higher education. I have a similar story. Both my parents are immigrants. My mom didn't finish high school. My dad never went to college, and I was able to go to the Cal State system, to Cal Poly Pomona, and it was quite affordable.

So I will say one of my concerns will be to make sure as we go through these budget discussions that we continue to keep education affordable for students and that make sure that we're not closing the gap or plugging the holes by increasing tuition and putting it on the backs of students to pay those costs. So that's sort of where my focus is going to be, to make sure it remains affordable for our students. Thank you.

Thank you, Mr. Essayli, Mr. Muratsuchi.

Thank you. I think we have a bipartisan agreement. That California's public higher education system is clearly one of the greatest assets that we have in the State of California to expand access and promote opportunity. I also like you, Mr. Essayli. I'm the son of immigrants. I'm a first generation University graduate. But for the University of California, I would not be where I'm at here today. And so I know that we just came out of a meeting where we talked about how we are facing tremendous budget challenges.

But we want to do everything possible to make sure that we are supporting student access, student opportunity, and preserving and promoting the greatest public higher education system in the country, in the world. Thank you.

Thank you, Mr. Muratsuchi. And with that sobering reality that you just received from all of us, what keeps us with great hope is certainly the students, and that's why we do this. So I'd ask the students panelists to please come forward. For our first panel, we're going to hear from Chanel Wynn, who is VP of legislative affairs, student Senator of California community colleges from Diablo Valley College and UC San Diego.

Welcome Dominic Kwan Tressler, President of Cal State Student Association at San Jose State University, and David Ramirez, government relations chair from UC Student Association from UCLA. Welcome to all three of you. It's great to have you here, and hopefully you've figured out what order you go in. So I'll turn it over to you now, and you each have five minutes.

Yeah. Hello. Good afternoon, chair and Members. Thank you for having me here. My name is Chanelle Win, and I am the Vice President of legislative affairs for the student senate for California community colleges. I am a student at Diablo Valley College, which is in the Bay Area, and I am a transfer student at UC San Diego as well. So I'm a product of community colleges as well. I deeply appreciate the opportunity and recognize my privilege to be here today in front of you all.

While we're supportive of many items in the budget, including funding for nothing bidet degree, we recognize the reality and the challenges of the California's budget situation and are focusing on our priorities of affordable student housing and the full implementation of co grant Reform act, as those are the main issues that ultimately impact the greatest number of students.

We are asking this Committee to support the full implementation of co grant reform because the co grant Reform act reforms the state's financial aid by streamlining the Cal grant programs into two forms, Cal grant two and Cal grant four for 2 and 4 year institutions and removing eligibility barriers based on the students'age, and time out of high school. This considers a student's need holistically, which in turn better support students and California community college students.

While I understand the privilege to be here and to be in these type of conversations and spaces and have the privilege to be in college, I want to recognize that many of the students and many of my friends do not have the same privilege to be here. Especially it's a system that serves the most diverse demographic. We have different types of students, from adult learners to returning students who will not qualify for these type of programs.

If this is not fully implemented for adult learners, to returning students that our state and system serves, it's often hard for them to prioritize education when they have so many dependence on them and so many factors they have to wait in. We are humans first and we need to prioritize how we're going to survive before we have to think about how to even get to classes. And that's one thing that we need to be able to prioritize.

When we think about supporting students and meeting students at where they are, the cograin equity framework would help them qualify and get them into classes, which in turn will create a more educated and qualified workforce for the state and will give a return in investment. When we think about the future economy and the future leaders of our state, we also respectfully request the Subcommitee to recognize the serious need for affordable student housing and community college students and support the preservation of higher education housing grant.

It's imperative that the state prioritize funding affordable student housing for students, nontraditional students, and Low income community college students. Students cannot get to class. I say this a lot, but we need to get to class by making sure that we have a roof over our head. I used to live in the Bay Area before I moved to San Diego and I can tell you that it does not get cheaper anywhere you go in California.

So it is definitely expensive to live in California, as everyone recognizes that. As one of our student Senate leaders said, there's always a period of anxiety when I receive a disimbursement from Pell Grant or from federal work study. I almost use all of it for rent.

And there's this period with short amount of money and just being anxious of using that money for things like basic needs like housing, or should I buy this toilet paper brand, or should I buy this brand of food, or should I save that money for rent, or should I do that until the next pay check comes in? That's all the questions that we're thinking of when we think about making decisions on the daily.

And I can tell you that walking three jobs is not easy, especially as a full time student. When we think about equity, we have to remember that we need to meet students at where they are and not students coming to us. Thank you for inviting us today and listening to the students and always remembering to keep us on the table. Thank you so much.

All right, well, good afternoon chair Alvarez and Committee Members. My name is Dominic Quan Treseler and I serve as the President of the California Student Association, which represents the nearly half a million students in the California State University. I am also a student at San Jose State.

Today, I am here to discuss and advocate for funding for two critical issues that directly impact our students and educational institutions across California, Cal grant reform and the CSU budget we fully understand the fiscal challenges that California faces, especially in these unpredictable times. Despite these constraints, it is imperative that we find ways to support and prioritize the needs of our higher education system.

These interconnected challenges require our immediate attention and collective action to ensure that higher education remains accessible, affordable, and equitable for all students in California. Through innovative solutions and strategic investments, we can address these issues in a manner that aligns with our state's fiscal realities while safeguarding the future of California's higher education. First and foremost, I would like to address, as my colleague did, Cal grant reform something that has been a top priority for all of our organizations throughout the last few years.

The Cal grant program has historically served as a crucial financial support system, enabling countless students to access higher education without facing overwhelming debt. Despite its benefits, the current framework and eligibility requirements of the program inadvertently exclude a significant number of deserving students. This is particularly true for nontraditional and older students who are disqualified due to archaic stipulations like age limits and GPA thresholds.

The Proposition to reform Cal grants by broadening eligibility and enhancing the financial aid provided aims to substantially lower the economic hurdles to higher education. Monetizing these criteria to allow greater access to this crucial support will pave the way for a wider array of students, especially those hailing from underrepresented and economically disadvantaged backgrounds. The significance of this reform extends beyond individual beneficiaries. It represents a strategic investment in the future of our state's workforce and economic landscape.

Furthermore, according to projections from the California Student Aid Commission, implementing Cal grant reform would make over 137,000 additional students throughout California eligible for aid. This expansion would notably increase the representation of diverse groups, including first generation college students, student parents, female students, and California Dream act applicants. This data underscores the reform's potential to foster a more inclusive and equitable educational environment, ultimately contributing to a more diverse and dynamic workforce.

It is essential to recognize that the CSU is not only the largest four year public University system in the nation, but it also serves as a pivotal role in providing accessible, high quality education to nearly half a million students and boasting over 4 million alumni. Ensuring sufficient funding for the CSU goes beyond just meeting basic operational needs. It involves maintaining your dedication to the multiyear compact that has ensured the system can fulfill its mission and future aspirations.

This compact is about more than just funding it's about a comprehensive approach to supporting the University system in a sustainable manner. It includes the necessity to Fund vital areas such as basic needs, title ix, compliance with the California Native American Graves Protection and Repatriation Act, or NACPRA, and critical capital renewal projects.

By advocating for a strengthened CSU budget through the compact, we are not only seeking to secure necessary funding for immediate needs, but also emphasizing the importance of strategic investments in areas critical to the well being and success of our students and our communities. Higher education serves as a catalyst for social mobility and economic growth. Supporting the CSU budget represents a commitment to a future where every student has the opportunity to thrive and contribute to the prosperity of California.

In conclusion, chair Alvarez and esteemed Committee Members, the narratives of Calgary reform and the CSU budget encapsulate not just the immediate fiscal needs, but the broader vision of the future of higher education in California. As we navigate through these fiscal challenges, the decisions we make today will shape the accessibility, affordability, and quality of higher education for generations to come. By choosing to support Cal grant reform and the CSU budget, we are not merely addressing budgetary figures.

We are choosing to invest in our students, in our communities, and in a sustainable growth and prosperity in our state. As we stand at this pivotal moment, let us choose to champion the cause of education. Let us choose to ensure that the CSU system remains a beacon of hope and opportunity. Let us choose to make higher education a right, not a privilege, accessible to all those who dare to dream.

By choosing the CSU, by choosing our students, we choose a brighter, more equitable future for all of California. Thank you for considering these critical issues and for your ongoing support for higher education in our state. Your actions today will echo through the lives of countless students and the chronicles of California's history. Let's make those echoes resound with hope, opportunity, and prosperity. Thank you for your time.

Thank you, Mr. Ramirez.

Good afternoon. Chair Alvarez and Members of Subcommitee three. My name is David Ramirez. I'm an undergraduate student at the University of California in Los Angeles, studying geography, environmental studies, and labor studies. I have the pleasure of serving as the government relations chair for the UC student Association. The UC Student Association's number one budget priority this year is full funding for the Cal grant Equity framework as promised in the 20222023 state budget.

And while we understand that this is a very tough budget year and California is facing a mounting deficit, we also are here to remind the Legislature of the promises that were made to students. Budgets at the end of the day are value statements, and California has long used budgets to vocalize how much it values access to higher education. This year should be no different.

The Legislature has voiced concerns around the growing segment of Californians not choosing to pursue higher education, and as of you all are aware, this choice often comes down to financial costs. The Legislature has also made it clear that diversity, equity, and inclusion are key values in the higher education space. In order to see more diverse students on our campuses, more equitable outcomes for students, and more inclusive policies that uplift our most vulnerable students, we need full funding for the Cal grant equity framework.

The framework was meant to provide those very outcomes. However, we cannot work towards a more equitable future without the funding that's necessary. I'd like to share some of the experiences that students have shared with me about what Cal Grant has meant to them. One student shared, I am concerned that I will run out of funding as a single parent. It took me longer to complete community college, and that might be the case here at the UC system.

I'm doing my best to stay on track with school and classes, but I'm also a parent of a young person who needs their mom. So it's a constant balancing of my roles as a mother and as a student. I need this funding to get my degree and go where my son and I can thrive and no longer have to survive through poverty. Another student shared, if it were not for Cal Grant, I would not be in higher education.

Both my parents are undocumented and thus I cannot rely on them for any form of financial support. I use my Cal grant to pay for my studies and help pay for my additional expenses. The money given to me through financial aid has allowed me the privilege of only working two to 8 hours a week through work study, thus allowing me to focus on my schooling and grades.

So, for many students, their Calgrunt represents a pathway to social mobility, and declining to support the Calgrunt equity framework means denying 130,000 students or prospective students the opportunity to complete their degree. Speaking of student experience, it would be impossible not to mention basic needs. Students across the UC system are struggling to meet their basic needs despite continuous investment from the state.

As the most recent data, 43% of UC undergraduates are food insecure, 8% of UC undergraduates are houseless, and 6% of UC undergraduates are experiencing both food insecurity and houselessness. It is almost impossible for students to succeed in environments where their basic needs are not being met, and it is especially impactful for houseless students who experience intense anxiety at all times about their lack of shelter. This is why one of UCSA's budget priorities this year is to protect the higher education student housing grant program.

We urge the Legislature to adopt and Fund this proposal next year despite the budget situation. Because students cannot wait additional years for housing, they're houseless now. Obviously, there are certain student populations within the UC that are much more likely to experience these challenges in meeting their basic needs. Examples of these populations include students with dependence, students with disabilities. Students with dependents must juggle school work, potentially with multiple jobs, studying any extracurriculars, and taking care of Independence.

This is already difficult, but without the appropriate support, it becomes nearly impossible. Similarly, students with disabilities must deal with their responsibilities of traditional students while ensuring their documentation of their disabilities are up to eight. Their accommodations are being met by professors, their medications or other necessities are being filled or kept up to date. They're also making their appointments with medical professionals, et cetera.

This is why UCSA advocates for permanent, ongoing funding for permanent, dedicated and center space for students with dependents and students with disabilities across all ucs. This dedicated staff and space would provide necessary resources for students with dependents and or disabilities. It is long past overdue that the state and the UC system recognize their most vulnerable students and put specific emphasis and funding towards recruitment and retention. I appreciate your time and consideration.

Thank you. Thank you to all three of you. You make your systems proud. You make your schools proud, but certainly you make us California proud of the investment that we make. And again, wanted to start off this conversation focused on you, on what you've shared. One of the things that you shared that I neglected to mention but I was very clear about at our very first budget hearing was on Calgrunt reform, so we did not coordinate our talking points.

But I was very glad to hear you all mention clearly you are really well versed on what that would mean. That means with Calgary reform we get more access for more students. And at the end of the day, if we're not doing that in this Subcommitee and in the Legislature, then what are we doing with higher education? So thank you for eloquently outlining why it's so important that we remain focused on full implementation of Cal grant reform.

We will have hearings on this specifically, but you've started us off really well. So thank you for your thoughts. I'll turn it over to any Members of the Committee who like to share some thoughts or comments for the students. Mr. Fong.

Thank you so much Mr. Chairman. And thank you to all our students for sharing your perspectives for your respective segments and really highlighting the importance of Calgary reform and full implementation. We know that this could be a game changer to expand access to over 130,000 students and this is something that really appreciate your sharing your personal insights and stories and the perspectives of your respective students and bodies as well.

And as we look at expanding access, thank you to chair Alvarez for really highlighting that and the work around student housing as well, and the revolving loan Fund program, the housing grant program. Anything that we can do to continue to amplify those efforts is critical to addressing the needs of students experiencing homelessness and housing insecurity. So thank you for sharing your powerful narratives. Thank you Mr.

Chair. Thank you Mr. Essayli. Thank you.

Thank you Mr. Chair. I actually had a quick question for. Mr. Is it. You recently, were you involved in advocacy related to the recent Cal State decision to increase tuition?

That's right, we were.

Okay. I'd be interested in your perspectives as a student, what that process was like and whether you felt the students were heard. Because my understanding is all but one trustee voted to raise the tuition.

There were actually five of our trustees that voted no on the race v. No. Yeah, I will say as I kind of said during the raise, it did not come as an ideal time for engagement with students. A lot of that process was done in the summer and kind of as we were beginning school. So I think broader engagement with students would have made a lot more sense. But this was something that was flagged for at least us at CSA months before.

And we had a healthy kind of season of engagement over that summer, though it could have been better with all of our students.

And does the tuition from your student, is that going to add the tuition increase, going to add more hardship to students already, or. What are you hearing from?

Yeah, I mean, no one is excited about this tuition raise. No one kind of appreciates it. It's going to be about 34% over the course of five years. But what we have been collaborating with the system on is ensuring that one thing we writ into the document was that 33% or a third of that money is going back into financial aid.

And we are looking at ways to utilize those additional funds and kind of change the way we do financial aid in order to ensure that our most vulnerable students are affected the least by this raise. And, in fact, they may be able to get additional total cost of attendance support.

Great.

Well, thank you for your advocacy. Thank you, Mr. Chair.

Thank you. Any other Members? Mr. Mccarty?

Yeah. Thank you. And I know this is my first time seeing you as chair, Mr. Alvarez, and I know you're going to do a fine. Just. I feel really bad that I left you in such a bad position. Yes, but that leads to this point. We had nine solid years of reinvesting in higher education, dramatically expanding enrollment access for UC, CSU, and community college. But that's just a piece of the puzzle. The cost of college isn't necessarily just tuition. It's housing and books and transportation and food.

And so these issues are real. So I think that we can't get lost on just focusing on access without thinking about the affordability piece. And so whether it's student housing, we'll talk about next, or continuing the quest that our prior generations focused on and expanding Cal Grant, the middle class scholarship, and our quest for debt free college in California.

And that's a real, real, you know, thank you for sharing a human light of what this means, and I know that we will continue to make this a priority. So thanks.

Thank you again. Want to thank you for coming and testifying and helping us keep focused on students as we attempt to do that throughout the hearings. Thank you. And with that, we'll bring up our next panel. We have an overview of the Governor's Budget. We have the Department of Finance here and the Legislative Analyst Office, and I'd ask them to please come forward and make sure you introduce yourself.

Some of us are, I guess none of us are really new to the Committee, but remind us who you are. And I think we're going to start with the Department of Finance. That's okay with you all. Welcome and please proceed.

Good afternoon, Mr. Chair and Assembly Members Devin Mitchell with the Department of Finance. I'm going to provide an overview of the higher education portion of the 2024 Governor's Budget, as well as the proposals from the University of California or for the University of California, California State University and California community colleges. I'll also cover financial aid and student housing issues that affect all three of the segments.

The budget reflects the third year of the multi year compact between the Administration and the UC and CSU systems, and the multi year roadmap with the California community colleges. These agreements are focused on achieving shared priorities to benefit students. Despite the state's current fiscal condition, the Administration remains committed to increasing access to the emergency of California and the California State University, improving student success, making higher education more equitable and affordable, and pushing for more collaboration among the segments.

Our goals also include supporting workforce preparedness and creating pathways for students to pursue career opportunities in high demand fields such as healthcare, education, climate change, action, and technology.

To address the projected budget shortfall, the budget defers to 2025-26, the planned compact investments of 240.2 million for the California State University and 227.8 million for the University of California, as well as the planned investment of 31 million at the UC to offset revenue reductions associated with the replacement of nonresident undergraduate students with resident undergraduate students.

With the deferrals, the budget largely maintains ongoing UC and CSU General Fund support at 2023-24 levels while enabling both segments to use interim financing structures or other internal borrowing to support spending at the planned 2024-25 compact levels.

I will now discuss the final higher education segment, the California Community Colleges. The Governor's Budget continues to support the CCC multi-year roadmap as established in the 2022 Budget Act, and the priorities set forth in this agreement include a focus on student success, student equity, and supporting the system in preparing the next generation of the California workforce. In terms of specific investments, the CCC system is supported by the Proposition 98 General Fund.

These investments include a cost of living adjustment or COLA of about 69 million for apportionments through the student-centered funding formula, a COLA of more than nine million to support select categorical programs and the Adult Education Program, and support for enrollment growth for community college apportionments of 29.6 million. The Governor's Budget also includes a one-time investment of 60 million to support expanding nursing programs and Bachelor of Science in nursing partnerships as consistent with the 2023 Budget Act.

As a reminder, the 2023 Budget Act approved 60 million per year for five years starting in the 2024-25 fiscal year for this purpose, and this coming budget year would be the first year of that investment.

Additionally, to address reductions in the Proposition 98 guarantee while continuing to provide stability to the CCC system, the Governor's Budget utilizes the Proposition 98 Rainy Day Fund, otherwise known as the Public School System Stabilization Account, to backfill these reductions for the CCC budget under the guarantee and to mitigate disruption to community college districts. These withdrawals are being used to fund both the current year and the budget year.

Finally--and this will be addressed in more depth by my colleagues covering the Prop 98 guarantee during next week's hearing--the Governor's Budget addresses eight billion of prior year declines of which approximately 910 million is attributable to the CCCs for the guarantee with proposed statutory changes to avoid impacting existing local K12 and community college budgets. Moving on to financial aid, the budget is assuming total financial aid expenditures of 3.3 billion in the budget year, most of which will be spent on the Cal Grant Program.

Cal Grant will provide awards to more than 377,000 students who meet specified eligibility criteria. It also includes 636 million General Fund support for the Middle-Class Scholarship Program, which will reach an estimated 332,000 students in the 2024-25 academic year. To address the budget shortfall, the budget proposes foregoing a planned 289 million one-time investment for Middle-Class Scholarship. Additionally, the budget includes funding to support approximately 7,500 Golden State Teacher Grant awards to students enrolled in teacher preparatory programs in the 2024-25 academic year.

500 million one-time General Fund was originally included in the 2021 Budget Act for the Golden State Teacher Grant Program and intended to be expended over a five-year period. I'll now mention a few notes on student housing, which are intersegmental investments impacted by the Governor's Budget. For the Student Housing Revolving Loan Program, which would have provided zero interest loans for the construction of student housing projects at the UC, CSU, and community colleges, the 2023 Budget Act approved 200 million in fiscal year 2023-24 followed by 300 million annually between 2024-25 and 2028-29 for a total predicted multi-year investment of 1.7 billion.

And to address the state's budget shortfall, the Governor's Budget proposes suspending funding for the RLF Program. This includes reverting 194 million of the 200 million one-time General Fund that was appropriated in 2023-24 and pulling back on funding in the budget year and the out years. For the Higher Education Student Housing Grant Program, the 2023 Budget Act continues the approach of having approved UC and CSU projects be funded by UC and CSU-issued revenue bonds rather than General Fund grants.

The 2023 Budget Act also reverted General Fund for approved community college projects with the intent to develop a statewide lease revenue bond or other statewide financing approach by the 2024 budget. The Administration remains committed to this approach and is developing a statewide lease revenue bond program for approved projects at the California Community Colleges for consideration in May Revision.

Finally, the Administration is also in the process of rearchitecting education and workforce systems to better reflect the lived reality of Californians, a process that began with the Governor's Executive Order N.1123 relating to career education. This 13-month planning process will investigate how existing policies, investments, and structures can be improved, culminating in the Governor's master plan for career education scheduled for a publication in the winter of 2024.

We will have more to say about this when that report is released, and with that, I'll let the LAO speak. Chris and I are ready to answer any questions from Members of the Committee now or in future weeks and months as the Committee has future hearings. Thank you.

Thank you.

Good afternoon. Jennifer Pacella from the Legislative Analyst Office. I think, as all of you know, our office has been releasing a series of budget reports analyzing the Governor's Budget proposals. Over the last few weeks, we've released reports looking at the Governor's overall spending package, his revenue estimates, his higher education plan overall, his budget plan for CSU and for the colleges. More reports are to come. All the messages I'll share today come from those reports and are described in more detail there.

For the purpose of today, I'll cover a few key takeaways. I think you're all familiar with the big picture under the Governor's Budget. In January, the Governor identified a big budget problem. Yesterday, our office came out with a revised estimate of that budget problem. It's bigger. It's grown. As of yesterday, our estimate is the state's facing a 73 billion dollar budget problem. The main reason the problem has worsened just since the Governor released his budget in January is what's happening with revenues.

As of February, our revenues are down 24 billion from the administration's estimates. Revenues generally are weak. So personal income, tax withholdings, estimated payments, certain corporate tax collections--generally they're all weak right now. Importantly, the state is not just facing a deficit in 24-25 or over the budget window 22-23 to 24-25, but over the next few years. In 25-26 the Governor is estimating a budget problem of 37 billion, and then the subsequent years are just slightly lower than that.

So turning to higher education, the Governor's Budget Plan does have some solutions to address this budget problem. The Governor proposes to draw down reserves. The Governor proposes to forego some scheduled spending. The largest of those Finance has mentioned about foregoing the launch of the Higher Education Housing Revolving Loan Program. So the Governor does have some solutions, doesn't have many solutions. All of the solutions that have proposed are one-time. Those one-time solutions won't help the Legislature moving forward.

They do obviously help you in 24-25 over the immediate budget window, but they don't help you with those out-year deficits. So despite this large and growing budget problem that you know you have, the Governor's Budget doesn't have any ongoing solutions that take ongoing spending and adjust it to the new ongoing available funds. Not only does the Governor's package have no ongoing solutions, the Governor's plan is to increase ongoing spending. So he provides a COLA for community college apportionments and several community college categorical programs.

He asks UC and CSU to increase their operational spending in 24-25. Under his plan, when the Legislature gets to 25-26 the state owes UC and CSU a combined one and a half billion, while again it's facing that 37 billion dollar deficit. We think increasing spending obviously right now is moving in the wrong direction. It makes your problem more rather than less difficult. So this is all to say, we have concerns with the Governor's plan.

We think he's overestimating the amount of revenue that the Legislature has, that he doesn't have sufficient one-time solutions, that he's moving in the wrong direction by increasing spending rather than containing it, and that he's missing many opportunities to achieve the kinds of budget solutions that would be less disruptive, those kinds of solutions that don't affect ongoing programs. So, turning to what the Legislature can do differently, we recommend the Legislature start by finding as much one-time solution as possible.

In our segment-specific reports, we have lists of options for your consideration. We start just by looking at recent initiatives that have some unallocated money or some unspent money as areas you could think of pulling back.

The more you pull back now, the less you're going to need to go to ongoing programs moving forward. When it comes to building the 24-25 budget--because much of all those solutions you find are going to help you deal with a 22-23 issue and a 23-24 issue, you're still going to have a 24-25 issue--we suggest that you think about as your starting place just across education, holding funding and spending expectations flat. This would mean no COLA for any higher education program.

It would mean not asking UC and CSU to increase their spending and hope that the state might be able to give them something like one and a half billion dollars next year. Rather than increasing spending, we'd encourage you to start looking for ongoing solution. So, for example, in our community college brief, we give you a list of ongoing solutions that you might want to start from.

These ongoing solutions will help you not just in 24-25 to try to realign your ongoing spending with your new funding reality, but it'll help you in 25-26. It'll give you this double benefit of making next year even more straightforward for you. So we encourage you to think about the list that we're providing in these reports as obviously just a starting point for you. You can add items, modify items, remove items. If the revenue situation improves, you can have fewer of those options.

If the budget situation worsens, you might need a potentially much longer list of solutions. The lists are intended just as planning tools to give you some options at hand for your consideration. The list that we develop focuses on preserving core programs and on preserving programs for students with financial need. You can decide whether you want to preserve that set of programs or any other set of programs. So I'm happy to answer any questions or go over anything I might have covered more slowly if helpful.

Thank you both. We will go to questions and maybe I'll get started and we'll see where the rest of the Committee wants to jump in. I'd ask both Department of Finance maybe to respond to--and perhaps the LAO's office--to respond to the Governors proposing that UC and CSU expand programs. This is in reference to the five percent increase that's being deferred. Is it your expectation that the CSU and the UC system grow their programs by five percent and that then they would be repaid back the five percent next year?

So the plan would have them continue to plan as if they had received the five percent base increase this year because it will be repaid next year.

So I think the answer then is yes, that you would expect them to grow their programs by five percent?

Chris Ferguson with Finance. So the answer is we would expect them to continue making progress toward the goals outlined in the compact. So I don't know that we would say that means growing program by five percent, but that would mean to continue making progress towards those goals, which include serving additional students, trying to reduce student costs, trying to better align with workforce and industry. So certainly we would say it's a continuation of the effort to meet the goals of the compact.

Thank you, Chris. I appreciate that. Maybe you can help me further understand, then, those goals--do they all require, in your opinion, additional expenditures or could some of those be accomplished without new expenditures?

It would just really depend on which priority you're asking about. It's a really general question.

Okay. I think what I'd ask is that you probably aren't prepared today to answer is maybe to better understand what the Governor would like to accomplish as part of some of these goals and what the expect limitations are of the systems and cost that out. I'd ask that you can have that certainly in a future discussion. This is going to only continue, obviously, but to better understand what those goals are specifically and what the obligations would be in terms of cost. Do you have anything else to add on that?

So the short answer is yes. And the Governor has never had a cost estimate for his performance expectations. What he has had is, I'll give you 5%, and you can use that to increase your operational costs. But in doing so, I do expect you to achieve some progress in your performance. Now, there are no ramifications if a segment doesn't meet all of those performance expectations. There are many performance expectations.

Some have not been met, but typically the state wouldn't put online something like hundreds of millions of dollars because one of 40 expectations weren't achieved. So we've been sort of skeptical of the approach from the get go. Now, when it comes to what does the Legislature want to do? What are your priorities? How much does it cost to achieve those? We're obviously happy to help you try to get to where you need to be.

Okay, well, this is obviously a collaborative effort, so I think I'd like to better understand from the governor's office what do we want to achieve and how can we do that in a year like this with the implications that we have? So. Okay, we'll move on to another topic, the issue of Calgunt reform. I do want to give you an opportunity to provide some more feedback on. There was an agreement and commitment now going back a couple of years on this reform being implemented.

We have heard from, certainly from students and also from others that implementation does increase student access, which seems to be maybe a goal of what we just talked about, and so maybe two goals that meet in a unique place. I'd ask Department of Finance if you can provide some feedback on the thinking behind not expanding completely going into Cal Grant reform this year.

Devin Mitchell with the Department of Finance. So the budget does not include any additional action on Cal Grant reform. It maintains the 2022 budget agreement that suggests the decision will be made in May of 2024. So we're continuing to monitor the situation, but there's nothing new in the budget about it.

Should I then assume that in the May revise you may come forward with a proposal that implements Cal Grant reform.

So it's in statute that a decision will be made. At that point. No decision has been made yet. However.

Okay. As a follow up, and I think last year as a Committee Member I asked questions and maybe didn't do a good job of following up with you to get answers. We definitely will do that this year, but I'd ask that you help us understand implementing segments of Calgary reform as to how much more access, how many more students would have access to higher education and financial aid support for higher education if different parts of the reform were implemented.

I think that's something that we'd be interested in learning more about. I assume you've done some analysis of total costs if you just do all of Cal Grant reform, partial costs if you did some of Cal Grant reform and I'd like to get your input on what you think those anticipated costs are, that would be helpful for us. Do you like to say anything on that?

Okay, I have more questions, but I want to be mindful of time and see if colleagues want to jump in at this point and ask some questions. Mr. Fong

Thank you so much. Mr. Chair. In terms of the thoughts about the General Fund for the EC system, in terms of the replacement of non resident students with students at Berkeley, LA and the San Diego campuses, we know that those are very highly sought after campuses and very much applied to how would the deferral impact those emissions of in state Californians.

So the deferral, because that amount would be repaid in the next fiscal year, the Administration wouldn't expect that it would affect the cost associated with, I believe it's 902 replacement of non resident students, the cost of that.

So in terms of the implementation, that would not impact the implementation of the enrollment of the additional Institute of California, is that what you're saying?

Right.

Okay, in terms of the student housing revolving loan Fund, the $200 million there and the $1.7 billion in aggregate, how many units of housing is that impacting if we're not funding that program?

So at this point we couldn't give you a number because the program hasn't officially rolled out its applications. So therefore we don't know what would be requested from the segments and how many beds that would support via those applications.

But that would possibly impact thousands of units of housing. We just heard from our students the impact of housing security, student homelessness, especially at our different segments. So we'll see if we can do any analysis on it.

Thank you. As part of the housing units that the state has supported to date, the per bed prices vary widely. So this is a very stylized estimate to give you, but it's like roughly 200,000. So if you wanted to. Yes, you're right. It's thousands of beds that would be funded with the 1.7 billion.

Okay. Thank you so much.

Thank you. I just want to follow up. I do have a question on the California students at UC. At three UC campuses. Just to be very clear. I think I understand this, but I think it's weren't to just put this out to the public. We are paying three UC schools the cost for a California student, what it costs an out of state student to attend. That's effectively what the program is, correct?

Essentially, yeah.

Have you had conversations with the UC system about continuing that commitment without this commitment of additional funding from the state in a year like this? Have they given you a response to.

Mean they could speak better to that? But we're always having conversations with the UC, Chris.

Yeah. Specifically to that question. No, we haven't had a conversation around this and whether they could do this without these resources. We would note that this was a legislative addition to the budget several years ago, and we maintain the spirit of honoring that agreement. Our deferral structure is intended to maintain that progress in a way that we think the state would be able to accommodate that.

Yeah. And with all due respect and honor to our former chair, we were in a different time. I think that's sort of the theme. We had resources to do a lot of things that we may not anymore. Do you have anything you want to add to that?

We haven't released our UC report, so this is just a preview, but it's very much on the topic that you mentioned. So given demand is so high at these three particular campuses, and given the Legislature has tried to swap out nonresidents to create more space for residents on those campuses, this might be an area where you want to engage with them to see if they, without asking them effectively to use their reserves for this purpose.

Again, it's unsustainable over the long run. Those students have ongoing costs associated with them, but it might help you weather the next few years.

Thank you. Mr. Muratsuchi had some questions.

Yes, I have a question for the Department of Finance. So as you heard from the legislative analysts, we've went from the $38 billion budget deficit estimate in the governor's January budget proposal to now the legislative analysts projecting a $73 billion budget proposal. It seems to me like, it's unlikely that we're going to be able to fulfill any commitment for a deferral next year. But I wanted to hear your thoughts on that.

I think we're still in the process of seeing what the Legislative Analyst updates look like, both in the short term and over the long term by year. And we wouldn't be able to comment on anything beyond what we proposed in the Governor's Budget in that structure at this point in time.

All right. Thank you. Thank you, Mr. Essayli.

Thank you. I just want to say, Ms. Pacella, I appreciate your honest and sobering analysis on the budget. I think before you could tackle an issue, you have to first acknowledge it. So, Mr. Mitchell, you mentioned the shortfall a few times in your speech. What is your budget shortfall? Estimation.

So this is based on the Governor's Budget estimate of 37.9 billion.

You guys are sticking to that?

So the Governor's Budget was predicated on. There are two main differences between the Legislative Analyst analysis as of the Governor's Budget and where we're at as of the Governor's Budget. One is a term in Proposition 98 where we effectively believe that the changes in the Proposition 98 guarantee are overall considered workload. So we don't include those changes within our overall total.

But that does bridge the gap of roughly, I believe it's $14 billion between what the legislative analysts had put forward and the 38 billion that we had put forward. So we're actually a bit closer there. And then the remaining difference between their projection and ours is we had roughly $15 billion in additional revenue in our projected forecast that they did not have and that explains largely the difference between what the legislative analysts had put forward as of the Governor's Budget and the 38 billion that we had put forward.

As you still maintain that revenue projection with the February update we just got, because they're saying it's even worse than what the prior numbers were. So your office is maintaining that your revenue projections are significantly higher than the.

LAO as of the Governor's Budget? Yes. Our next opportunity to update will not be until the May revision. So we wouldn't speculate on what that would do to our plan or what those revenues look like at this point in time. Do they change between Governor's Budget and may revision every year? They certainly do.

So my understanding is your position is you don't intend to update your projections until the May revision. Is that accurate?

Yeah, that's tradition.

Okay. Well, I guess we'll have to just wait till then. I want to try to understand you said that the cause of the revenue are, I'm sorry, the cause of the additional shortfall to 78 billion is a weak revenues. So that means people are paying less taxes, people and corporations. What does that generally mean? Does that mean people made less money last year in California, or is there any light on you can shed on why the projections are so much lower?

So I'm not our economist, but I'll give it a go. So withholdings is just all of us and what we're making. The job market has been strong and employment has been strong. But still, when you look at withholdings, also, we're talking about downward revisions to growth. So the Governor is expecting growth and we're expecting less of it. So it's like folks have jobs and they're doing pretty well, but we're not seeing the kinds of growth and withholdings that would be needed to Fund the governor's plan.

When it comes to estimated payments, these are lots of folks, but they tend to include your richer folks. And so that's much more volatile depending on their capital gains. And the stock market has been doing well over the last few months. If it continues to do well through May or June, those estimated payments might start ticking up and appear stronger. We just haven't seen that to date in the data.

And then I don't pretend to know what's going on with the corporate revenues, but those are showing notable weakness as well. So this is suggesting that the economy right now in California isn't doing as good as folks have hoped. Again, the way the Governor describes it is he's just more optimistic than we are. No one's saying we're in a recession.

So again, it's a bit of an odd space to be in where we have such a large budget problem and it's due to just revenues haven't spiked and sort of recalibrating. They are down from where they were when they were spiking in 22, but not to the level of a recession. Unemployment is ticking up a little bit, but not substantially. It's ticked up 0.2 percentage points. We are higher than the nation. So California is struggling a little bit more than the nation. This is what tends to happen. We struggle a little bit more during difficult times and do a little bit better in good times.

Yeah, but from what I understand, you're saying is that it's not that we're not growing. We are growing. We're just not growing at a speed or rate high enough to keep up with spending. And so I guess my concern is even in a growth year, we're $73 billion short. Heaven forbid we ever enter a recession. It would be like a disaster. So I just think these are sobering conversations we need to have and make sure that we are being wise stewards of the public's resources and managing the money in a way that's not going know push us over a know if ever that happens. So I appreciate that. Thank you, Mr. Chair.

Thank you. Mr. McCarty?

Yes, thank you. And yeah, this is somewhat sobering. And I think our job here, and you're leading it, Mr. Chair, is to protect as much as we can from the remarkable progress we've made in higher education and all of education the past decade, but realizing we don't have unlimited revenues to address that, I will say that it is an intriguing question on the expanded UC enrollment, and we should ask that question to Mr. Drake in about 10 minutes here.

But I will say that I know that this was a top priority for the prior, started with the prior Governor in this Governor Legislature.

And I will say that in the last nine years, when I've gone around in my district and talked about all the things we've done from early education and doubling K-12 funding to Cal grant reform, the fact that we have more slots for more Californians who have perfect grades and have got squeezed out for a decade by out of state residents and international students, this was the number one thing that we heard back from my constituents and all of our colleagues in our caucuses for 10 years.

So this is a top, top priority. And if we can keep doing it, and Mr. Drake says we'll keep doing it, we don't need the money, that'll be amazing. I'm not sure if that's going to be your answer, but we should entertain that scenario. But this is, I think, of a knowledge based economy, and we need more highly skilled workers to fill the jobs of today and tomorrow.

And so many of our high school students are graduating with a through g credentials and gpas that are UC eligible like never before, and 100 plus thousand qualified students at UCLA and UC Berkeley every year. And it was just the lottery to get in. And the fact that we are expanding access for the first time a generation of Californians is one of our best legacy points. And so we need to do everything we can at all costs to continue that. But we should ask all the questions. Everything should be on the table. But I just want to give some perspective there.

Thank you for sharing that. Certainly the goal is for more Californians to have access so we'll work on that. One last question to ask to the Department. The Governor is proposing eliminating the future $300 million of additional funding that was proposed for the UCLA project. Does that mean that the $200 million that have already been allocated in previous budgets has been utilized? And if the cost of the facility was 500, what is going to happen?

So from our perspective, it is being utilized and deployed. You may have recently seen news article around UCLA acquiring a property near the campus, and that property is being converted to fulfill the vision behind the investment. From our perspective, we think that 200 million is sufficient, when combined with other operational resources available on the campus, as well as private philanthropy, to see that project to fruition. But it is in process.

They have signed an agreement, that's my understanding is they have signed an agreement to acquire that property. Those resources would be used to acquire that property and or to outfit that property for its intended purpose.

So I remember last year, actually, I specifically asked about, and again, didn't do a really good job of following up on my questions. I specifically asked about what the project was and didn't really have a response. So I think now I'm clear. What you're telling me is that this funding is going to be used for what is titled UCLA Institute of Immunology, and it's the campus or the site that you referenced in the recent news articles that were out there.

And even though the cost of that project is likely hundreds of millions more, a combination of the UC system or the campus and philanthropy will come up with the difference in order to make this transaction possible.

Yeah, I think that's our understanding of how it would proceed.

What is the total cost of this project? If you don't know, I follow up on this.

I don't have it in front of me, but we do have that. And when we next present on the UC budget, we can certainly provide that.

I appreciate that. Thank you, Chris. I don't see any other further questions. Thank you all for being here. We look forward to seeing you here a few more times. We do have 15 scheduled hearings in this Committee, so with that, we are moving on to our next panel. We have leaders from each of the segments. We have for her first budget hearing, Chancellor Garcia and Chancellor Christian from first CSU and then our community college system. Welcome to you both once again.

Congratulations and we welcome you here. And returning one more year is President Drake from the UC system. The three of them will join us up here and welcome you all. Hope. Again, I think I've had a conversation with all of you about the difficulties of this year. You've already heard that in our introduction, and I know because I've spoken to all three of you, that you are also focused on student access and student success.

I appreciate you joining us and sharing your perspective from each of your systems. So we will start with Sonia Christian, our Chancellor from the Community College System. Welcome.

Well, good afternoon, Chair Alvarez and Subcommittee Members Sonya Christian eight months into my role as chancellor of the California Community Colleges and previously chancellor of the Kern Community College district in the Central Valley, and prior to that, President of Bakersville College. After completing my bachelor's degree at the University of Kerala in India, I came to California as a foreign student and fell in love with community colleges, which I saw and called at that time a uniquely American invention.

As an immigrant, I believe that we have a remarkable system of higher education in California, the UCS, the CSUS, and the community colleges that put equity and excellence at the center of all that we do. Let me also say, Mr. Chair, how much it means for you to not only feature a panel of students providing their perspective on the Governor's Budget, but to also have those students go first. What better way could we start the meeting by highlighting student voices and their priorities.

I'd like to start with some very good news. Enrollments in the California Community Colleges continue to grow at a rapid rate. I recently received an email from Dr. John Hetz, our lead of data and research, that systemwide enrollments this fall grew by over 8% compared to fall of 2022. We have bounced back to serving over 2 million students for the first time since 2019 after we had a steep enrollment decline during the pandemic.

So in this last year, fall to fall over 100,000 students, that was the growth number. And we are just looking at preliminary numbers, so it's going to be higher than the numbers we see today. Even more encouraging is some of our strongest enrollment growth has been in students from groups historically underrepresented in higher education, our black students, our Latino students, students with disabilities, and students aged 35 and older.

So thank you, Members of the Legislature and the Newsom Administration, for the funds you have provided for enrollment and retention in recent years. Every bit counts. To put this growth in perspective. In the national picture, from fall 2022 to fall 2023, California community colleges accounted for 50% of the student headcount growth for community colleges nationwide in California. So looking at the state picture, from fall 2022 to fall 2023, California CCS accounted for 89% of the growth in undergraduate student headcount in public sector higher education.

In fact, for 2023-24 increased enrollments across the state have led to a funding deficit factor of 3.55%. So we are overperforming compared to the funding for the student-centered funding formula. As estimates and recalculations happen throughout the year, we hope to see an elimination of that shortfall. I really stressed enrollment recovery for a 116 colleges when I started and the colleges have delivered, I hope we can fully fund colleges at the level of the growth they have experienced now to the Governor's Budget.

Specifically, we are very pleased to see that there are no reductions proposed for the California community colleges. We truly appreciate the governor's support for continuing to fund affordable student housing, which is critical to addressing the housing insecurities experienced by our students. We are excited for the governor's proposed investment in expanding community college nursing programs. The healthcare staffing crisis is a major area of need for California's workforce, a workforce that represents the communities they serve.

In fact, we are putting finishing touches on a Vision 2030 demonstration project that solves for both increasing representation of workforce that is growing our own as well as addressing the shortage. The demonstration project is shovel-ready so we can start implementation right away. Thank you Governor Newsom and team for this commitment, even during a time of revenue challenges, the Board of Governors for the California Community Colleges approved Vision 2030, a roadmap for California community colleges, in September of last year.

It maintains the framework of vision for success, notably retaining the metrics of getting students to complete a degree or certificate, always with equity. Vision 2030 has made a few additions. It has reintroduced the importance of access, specifically access with equity. The pandemic brought to light the equity fault lines that already existed. The vast majority of students who disappeared during the pandemic were from minoritized communities.

Vision 2030 doubles down on equity in access and calls on colleges to take education and training to those Californians, 6.8 million with a high school diploma but no college credential who are in low-income jobs, getting them on pathways towards a credential that leads to a highway job with the necessary support services and social safety nets to make this vision of economic mobility a reality.

In Vision 2030 demonstration projects, we are partnering with labor like the United Domestic Workers and the United Healthcare Workers, as well as industry partners, to expand opportunities via non credit instructional on ramps and apprenticeship programs. Finally, given the future of work is rapidly changing with the greening of industries and the impact of generative AI, the community colleges are mobilizing and mobilizing fast in anticipation of the skills and abilities that are needed for the future workforce.

So, given this ambitious, outcomes driven agenda of Vision 2030, there are a few budget priorities approved by our Board of Governors that I must highlight. Even with the current revenue outlook, the California community colleges must have a statewide common data and technology infrastructure. Currently, we have 72 technology platforms with capabilities varying vastly from district to district. Some are resourced at higher level and others are not.

The chancellor's office gets the data about six to eight months after the fact in order to advance the transfer agenda and let the data flow from our system to the CSUs and the UCs to deploy interventions for our students at scale and in a timely way to make a difference on the outcomes.

I believe we do not have a choice but to develop the system wide infrastructure and with the rapid advancement of machine learning and AI, which is becoming more ubiquitous as well as for security reasons, as bots are getting more savvy in attempting to breach our systems, it is clear that implementing those technologies 72 times at our 72 districts is ineffective, inefficient and not equitably experienced.

Across our colleges, we have also prioritized implementing credit for prior learning as a mainstream opportunity available for our veterans, working adults, apprentices, et cetera. Currently, CPL is applied at the margins of our operations. We have two focused demonstration projects, one for veterans and a second for apprenticeship programs. The idea here is not to treat on-the-job training and college as two mutually exclusive enterprises.

Learning is learning and the learning ecosystem must be expanded to be able to recognize applicable learning, whether it occurs in the classroom or on the job. We are pleased that the Governor is working on a statewide career education plan with a cradle-to-career data system. We continue, of course, to be strong advocates of fully funding Cal Grant reform so that the total cost of attendant does not impede education of our students.

A quick word on potential bond measures given that there might be a climate bond in our future, I would call your attention to the issue of climate action and the role of our system and our campuses in preparing to play helping California mitigate some of the worst effects such as wildfire and power outages that impact our disinvested communities.

In the event of a climate bond, we have shovel ready proposals for local community college microgrids to enable them to serve as critical community hubs during emergencies and natural disasters. We are also finalizing a proposal for the climate ready workforce by investing in the necessary laboratories and built equipment infrastructure. Mental health has been a priority for California community colleges and we have a proposal which colocates mental health services with a housing infrastructure development for unhoused.

In the mental health bond, our campuses can always benefit from modernization and safety projects related to an education bond. On a related note, we have 116 campuses and 80 centers across California, about 200 facilities that can serve as easy to access hubs for any kind of large scale equitable infrastructure development with just a few highlights from Vision 2030, you can see that the plan is outcomes focused, with California community colleges moving quickly with a level of urgency and precision like never before.

I'm happy to provide more specifics in the next segment of our session. This concludes my remarks. Thank you.

Thank you very much. Welcome.

Thank you. Chair Alvarez and Members of the Subcommittee, thank you for the opportunity to speak with you today. I am Dr. Mildred Garcia, chancellor of the California State University, and since this is my first time appearing before this board, I like to begin with a few introductory remarks. Appointed last July, I began my tenure as chancellor on October 1, serving as the 11th chancellor. The first Latina in this role is my life's greatest professional honor and one that is deeply and personally meaningful as well.

In so many respects, the CSU and mission mirror my own. I see myself in the students we serve. I am a first generation college graduate, the daughter of humble and proud parents who migrated to Brooklyn from Puerto Rico. I grew up in a poor but beautifully diverse neighborhood near the factories where my parents and family worked. But while my neighbors were diverse, their dreams were the same to create a better life for the next and future generations.

Thanks to my parent's vision and sacrifice and their deep appreciation with the transformative power of higher education, I have lived that dream, and that's the reason I chose to return to the CSU. I returned for the work that we do and the students we serve, America's new majority, our first-generation students, students of color, low-income, and adults looking for and deserving of a brighter life and brighter opportunities.

As Chancellor, I now have the profound privilege to lead the nation's and most diverse four year University system, its greatest driver of social mobility and an engine of prosperity and progress for the State of California. While my tenure is only nearing the end of its fourth month, that short time has demonstrated to me that the CSU is on a steeply upward trajectory and building positive momentum. The CSU stands alone among University systems in its size and scope.

Our 23 universities are anchors for the regions they serve. They are important engines of economic vitality in their communities. Many of our students are placebound, or, as I prefer to say, place committed and reside near the campus they attend. After graduation, 80% of our students continue to live and work within a 50-mile radius of their alma mater.

This means the investment we make in these students in academic programming and holistic student support is a direct investment back into California and the communities our students go on to serve. During the rest of my remarks, I want to underscore why the state's ongoing investment to the CSU is so important. First, the fiscal reality is that we are highly dependent on state funding.

Unlike other universities and University systems in California and across the nation, the CSU has and is utterly reliant on its two largest revenue sources, state funding, which comprises approximately 60% of our core revenue, and student tuition. And if the state funding set forth in the compact is taken away, our progress in essential, mission critical areas will be slowed to the detriment of the CSU's diverse and talented students.

Thanks to the promise of the compact as well as the tuition plan we adopted in September, our multi-year budget planning allowed us to negotiate multi-year contracts with most of our unions. We negotiated agreements or tentative agreements with all the CSU labor union partners, agreements that will provide fair and competitive compensation to our world-class faculty and staff who are so fundamental to the success of our diverse and talented students.

Equally important, with multi-year budgets, we can plan and be prepared to meet the educational commitments for students who come to the CSU, expecting that they will be able to complete their degrees in a timely manner. Each student is a multiyear investment from admissions to graduation and beyond. The CSU's flagship student success effort, Graduation Initiative 2015, has led to all-time highs in graduation rates and for students from all backgrounds.

And even as we redouble our efforts to reach GI 2025's bold student success and equity goals through an equity action plan and a data-driven, finished, strong community of practice, we are engaging in a creative and collaborative system-wide effort to reimagine what it means to advance student success in educational equity at the CSU through 2025 and beyond.

In the post pandemic higher education landscape, a key ingredient for doing this well is having a sense of what revenues we can count on and how they can be deployed to meet these future challenges. Our 23 University presidents are brilliant, creative, and compassionate leaders, and more dynamically diverse than at any time in the CSU's history.

Together and in partnership with system leadership, we are working to expand access and opportunity to more Californians through strategic enrollment management, academic programming, and the prudent allocation of the resources entrusted to us. It's work that shows great promise. We are committed to making great strides in turning weaknesses into strengths, including bolstering our University's culture of care and compliance, and working to ensure the timely and respectful repatriation of Native American ancestors and cultural items stored on our campuses for far too long.

We continue to collaborate with community service providers and across higher education segments to identify and scale high impact practices to remain a national model for supporting our Students'basic needs. In addition, over the past decade and with the state's help, the CSU has made progress on our academic facilities and student housing.

We prudently and strategically restructured and issued new long term debt for capital projects, utilized one time state and CSU funds for critical capital renewal projects, and we are actively planning and constructing several academic facilities and affordable student housing projects approved by the state in recent years. But quite frankly, we have far more to do in this area. We must address a backlog of over $7 billion of capital renewal, and we have a need for tens of $1.0 billion more for modern academic facilities.

These examples and many more underscore an undeniable positive momentum for the CSU, a momentum that has me profoundly optimistic about the CSU's future. However, I must emphasize that sustaining this momentum requires the ongoing funding set forth in the multi year compact for which we are deeply appreciative. We recognize the state's significant budget deficit due to a severe and ongoing decline in revenue, and we are deploying difficult cost cutting strategies at both campus and system levels.

We have stretched and will continue to do our part to meet the challenges of the fiscal reality that confronts all of us. But again, I cannot overestimate the importance of continue to honor the compact funding, either as originally structured or as modified in the governor's January budget proposal. I ask for your support in this regard so that we can continue to transform the lives of more than our 460,000 students.

As my life was once transformed, I will never forget the words of my parents, which said, the only inheritance a poor family can leave its children is a good education. My parents believe that to their core. And now those words inspire and guide me as chancellor to ensure that the inheritance remains available to all Californians. I leave you with a commitment.

I commit to you, that the CSU will continue to demonstrate that resources entrusted to us are not an expenditure but an investment, an investment with dividends measured in social mobility in more vital communities and empowering California's future, diverse and educated workforce, our business community's greatest competitive advantage at a scale only the CSU can provide. An affordable, high quality Cal State degree is a private good, and it is also a public good, one worthy of your investment. Chair Alvarez, thank you for the opportunity to address you today.

Thank you, Dr. Garcia. President Drake.

Thank you, Chair Alvarez. I appreciate the opportunity to be here today with my colleagues from the California State University system and the California Community Colleges system. I am noticing that I've been back three and a half years and there have been seven people sitting in those two seats. So I appreciate during that time. So I appreciate both of you being here and want you to know that we all work together on a continual basis, and it's good to see you both.

Dr. Garcia and I worked together, though actually 15 and more years ago when I was chancellor at Irvine and you were CSU President. So it's nice to be rejoined. We're talking here today about the opportunities and challenges for public higher education in our state and for the I will be speaking about those challenges and opportunities for the University of California in particular. But let me again, as my colleagues, by expressing my deep appreciation for the long standing partnership the University has had with the Legislature and with Governor Newsom.

Over the past several years, the University of California has been laser focused on ensuring that we are serving the people of California well in all that we do, from educating growing numbers of California undergraduates to enhancing the pipeline of teachers and healthcare workers, to expanding our health enterprise so that it could continue to provide world class health care and to reach our underserved communities.

The support that we have received from the Legislature and the Governor has been key to our success in these areas, and Mccarty mentioned conversations we've had over these past years and appreciate that support in the prior leadership of this Committee. We recognize, of course, that this is not a typical budget year. The state is facing a growing deficit and continued fiscal uncertainty. That means that all of you and the Governor are in the unenviable position of having to make tough choices about next year's budget.

And we are tremendously grateful that in his January budget introduction, the Governor deferred, rather than eliminated altogether the 5% funding increase that he has pledged in the multiyear funding package or compact with the University. We stand ready to work with all of our partners in the Legislature to preserve that funding so that we can continue to expand access, improve our offerings, and serve the State of California well.

As an example, the increases in funding that you have provided over the last few years have translated into very positive enrollment numbers for the fall of 2023. Fall 2023 represented the University's largest undergraduate student population and included a record number of California residents. We enrolled the smallest number of nonresident students since the fall of 2017, with the three year decline now standing at 16.6%.

Thanks to state support for the second year in a row, we also reduced nonresident enrollment and increased California resident enrollment at UC Berkeley, UCLA, and UC San Diego. Undergraduate enrollment of underrepresented groups also increased compared to last year, and we continue to enroll more community college students than any other university of our caliber in the nation. This is reflective of our strong partnership with the community college system and one that we're very proud of.

I want to thank the Legislature and the Governor for making these accomplishments possible. We will continue to increase our enrollment for the upcoming academic year in conjunction with our promises under the contract. Under compact and beyond enrollment growth, we're also making progress in other compact commitments. I'll share a few important highlights. First, the compact calls on us to improve the affordability of the University by continuing to expand debt free pathways for undergraduate students and by reducing non tuition expenses such as textbooks, housing, food and transportation.

I'm proud that we've been funding our own debt free program for two years now with expanded UC financial aid and the state's middle class scholarship program. And it's working. Our graduating class in 2022 had the lowest proportion of students with debt in the past 10 years, and most of our California students graduate debt free in the area of student housing. Specifically, our campuses continue to build more of the infrastructure we need for our students.

As you know, our campuses reside in some of our state's most competitive housing markets, so adding student housing is critical as a priority in these areas. Since the launch of our student housing initiative in 201516 the University has added more than 28,000 beds across the system. In 2024 alone, we are building or ready to construct more than 15,000 new beds and will have another 6700 beds by fall of 2025.

Second, the compact calls on the University to fully participate in the implementation of the crater to career data system. I'm pleased to share that the University took the lead in drafting initial data specifications to support cradle to career and other segments and served on the cradle to career information security task force to help build out effective information security policies and practices that, along with testing and validation, help to make this plan secure.

As of last fall, we are also sharing student data with the cradle to career system, and I'll close by reiterating how much we appreciate the strong partnership we've had with the state Legislature. We know that managing so many budget requests is challenging, and we are grateful for your recognition of the importance of public higher education to the future of our state. Thank you again for inviting me to speak here today, and I look forward to taking questions in the following few minutes. Thank you.

Thank you, Dr. Drake. We'll start with some questions from committees and I'll start off with a few and then pass it on to my colleagues. I'll try to keep the questions that apply to all three of you, but I do have some specifics. First, I like to ask about reserves in the UC system, the CSU system, and then probably more by college district.

Maybe you can give me a flavor of where things stand, district by district, for the community colleges, but can you share with us your policy, either established by board policy, by trustees, by governors, on reserves, and where you currently stand and how you will be utilizing reserves in the coming year, given the governor's proposal? Let's go this way. Now from left to right.

Left, you're left. Okay? Yeah. So we have three areas in which we have reserves that are governed by fiscal and financial policy. We have reserves in our hospitals because about a little more than half of our business is in the healthcare enterprise. So that's one place where we have pooled reserves. There's a range from the different academic medical centers, and those reserves, as you know, are used. All of the academic medical centers are over subscribed at this point.

I don't know if any of you have had both good luck and misfortune. Good luck that we were able to serve at misfortune of needing to use one of our hospitals over the last year or so, or have any friends or relatives who have. If you go to UC Davis now and walk into the emergency room, you'd see patients waiting for beds because they don't have room to get beds there. And that would be the case around our state.

I know at one time in the month of January, UCLA was listed as 120% of bed capacity, which is kind of an impossible number. So we're doing our best to grow the hospitals and the hospitals, and growing more hospital beds require reserves. They go to the debt market to borrow the billions of dollars it takes to build these, and you know that well. So they are under reserves compared to what the markets wish, ranging from the lower levels of around 60 days of cash.

In San Diego, the market goal is 180 days of cash for these very intense, high revenue businesses. I believe that our numbers, on average, average out to about 120. So about two thirds of the goal. But we use the fact that we can pool reserves to help us. That helps us a bit in the debt markets, but our hospitals are relatively under reserved at trying to get to the market level. We also have reserves in our housing markets.

We again go to the debt market to be able to build housing. I mentioned the tens of thousands of beds that we're adding, and in that area, we keep reserves to again, go to the real estate market to be able to get the money that it takes to be able to build those beds. And then I'll know that my office, the President's office, keeps reserves. The reserve policy there for our office is $15 million, which I'll say is some number of hours of reserves.

So it's essentially no reserves there for our office. The money really goes all to the campuses. We have other money, like endowment money. But the endowment I'm going to get, I know I'm speaking publicly, 97 ish percent of it is restricted, pledged for certain things. What we do is our very best to have enough reserves to be prudent moving forward. But we don't have cushion other than what I've mentioned.

The other question I asked is, how do you anticipate to use some of those reserves.

Given the Governor's Budget proposal.

Yeah. One of the things that we will be doing is kind of managing places where we will restrict growth and plans that we had for the future next year to kind of moderate those things. And then we would, in some cases, use internal borrowing to help us keep our commitments, for instance, to our workers to make sure that we can be able to support them moving forward.

So as having a little bit of flexibility to be able to borrow short-term would help us in--get over the hump for the next year. We'll trim in certain places, restrict growth in others, and then, where necessary, try to bridge the gap. Our goal is to keep up with our commitments to the state for the compact over this year. That's coming as we approach next year.

Actually, thank you for reminding me about the compact. You heard the exchange I had earlier with the Department of Finance. Is it clear to you what your obligations are under the compact?

I think so, yes. I mean, as far as our obligations to students and our growth, we have those projections very clearly for the compact, actually, through the next few years, and actually, we project out through the end of the decade.

Okay. So it'll be the same questions, Dr. Garcia, on reserves, policies, where you stand--

CSU has a reserve. As of June 30th, we have 8.6 billion one-time cash on hand. And most of those reserves, 7.8 billion, are heavily restricted by state law and other obligations. So if you like examples, 1.1 billion will be returned to the state. The state changed the financing for many CSU capital outlay projects from one-time funding to bound funding. So that goes back to the state.

2.4 billion are funds that are allocated from special fees, such as housing and parking, and can only be used for those items. And this category also includes line items in the annual state budget that must go to certain purposes. And then 1.4 billion is set aside for short-term obligations, such as financial aid and contractual commitments. When you add that all up, we have 766 million dollars in reserves, which is approximately 33 days of operations, and that's for economic uncertainty.

And it's far below the three to six months that we should have, as we know, and great accounting principles. As far as how are we going to use it, well, we're hoping that the compact will be there, but if we have to use the money to cover the compact, we're putting ourselves into much lower, millions of dollars for economic uncertainty for our campuses.

Okay. But the Governor's proposal does not give you the compact money, that roughly 240 million dollars?

We are looking at our options now at how we're going to do that. If we don't get the compact, part of it probably would be using some of those funds. Some of it will be looking at how do we readjust on our campuses and how do we move forward.

Okay. And you reference good accounting principles, but you have no policy from the CSU Board of Trustees in terms of reserves?

We do have a reserve policy and how we use the reserve, but we would love to have six months. It just has not been able to happen yet.

Got it. I didn't clarify that. From the UC's perspective, is there a policy from the region? It is...

The President's Office is for 15 million dollars.

So it's only on the President's Office?

That's the policy that I'm aware of, yes.

Got it. Thank you. I think those are all the questions. Now moving on to the next system.

So, you know, Chair Alvarez, you had alluded to community colleges having their locally governing boards from the Chancellor's Office, and our regulatory language, it's very minimal. It's about two months of operating expenses. So in the event of any revenue declines, then layoffs don't kick in. So that's a very low threshold. Now, having worked at a local community college and district, it varies from district to district, and there are local boards that have a higher reserve percentage than others, but nothing from our Board of Governors. It's just two months.

Okay. Let me ask a question. Have you heard from districts on how they're going to utilize some of those reserves, potentially or are they maintaining reserves? Are they growing reserves? I know many systems or many districts, but are you getting a sense from your--

Well, the Governor's January Budget for community colleges sort of balanced it using the Rainy Day Fund. So we are working in growth mode, anticipating to be kept whole going into 24-25. In fact, we have a big agenda when you look at dual enrollment. We are moving something called a ninth-grade strategy, where every graduating high school student will have at least a 12-credit college credits accumulated by the time they graduate.

So it would be hard pressed in this growth and success agenda that we're moving to be signaling community colleges that there might be decline in growth funding. I had also indicated that for 23-24 we're already seeing that our enrollments are ahead of what the funding level is.

Yeah. And I'll ask you more about that in a second. This is all tied, obviously, to facilities, which I know there's needs. I think CSU was very specific about calling out needs. I've heard of some needs at the community college system, obviously UC system as well. Can the three--and we will now go in the other direction--can the three of you share with us what your expectations are in terms of the state making, supporting, making contribution towards facility needs at your systems?

I know on the student housing front, we had some very difficult and creative conversations with both the Governor's Office and the Department of Finance, and our Board of Governors were just super excited when the revenue lease bond funding idea came about to maintain the commitment to student housing. So we're hoping we can continue to count on the financing strategy that was discussed to continue through this legislative process.

So you're hoping to see, like we are in the May Revise, something around lease revenue bonds?

Yes.

On the housing front? What about on academic facilities? Is there anything in your--

The needs--we keep a running list of the needs to upgrade our campuses. We have a set of criteria that is connected to safety, that's connected to sustainability, like retrofitting, and then just modernization as well. So our needs are significant. So if there happens to be the education bond, we would absolutely like community colleges to be considered in that as well.

What's the total of your need? I know it probably changes regularly, but what roughly figure?

I'll need to get back to you. I can text Rena, who's sitting behind me, who might text me the answer, Chair Alvarez.

CSU?

So I think number one, we are hoping that the Educational Funding Bond will include the CSU and higher education for our institutions. Our facilities are extremely old. You heard me say it's about seven billion dollars in deferred maintenance. So we're hoping for that and hoping that we can get some help. These institutions have been around for a very long time, and so we need some help in that area.

Otherwise, what do you use on a regular basis to help fund? I know we used to do these bonds on a more regular basis, which supported this type of infrastructure. We haven't done that for several years. What tools are being utilized currently to facilitate construction of these types of facilities?

We do use our funding, but I would have to get more information on that one. Get back to you on that.

Thank you, President Drake.

Yes. So we would hope, in fact, to be included in the Higher Education Bond as well. I think that would be extraordinarily important to the building that we're doing. We also use philanthropy and other things to raise money, and I know that that's very active in our campuses, and it's a big part of both, what happens on our campuses and in our hospital growth, and then the hospitals also then borrow money to grow the enterprise itself since it can be a revenue-producing enterprise.

I did look at something else in my notes. I mentioned in reserves, 15 million dollars at my office, which is--the cap is 15 million or 3.5 percent ten days or so. So that's what we use as the 15 million. Across the campuses, there's about 238 million dollars in unallocated reserves across the ten campuses. That represents something like about nine days of cash. So it's again, very low. We use sometimes--the fact that we're pooled can help, but that's the reserves that are kept in unallocated cash on campus.

Thank you for providing that update. I'll ask one other question then turn it over, and it has to do with NAGPRA, and we had a hearing last year about that and I heard CSU specifically mention that, but I know it's been an issue at UC as well. And if you could just give a brief 30 second response to that. That doesn't pertain necessarily for community college systems, but for both of you on what you're doing, in that regard?

You want me to start? Sure. We are clearly focused on this. We are implementing the audit recommendations of AB 389 requirements, we completing a review of our university collections, creating a statewide NAGPRA policy. Each university is hiring a full time NAGPRA coordinator. We're creating systemwide and campus committees that will have Native American Tribal representation. We have a President, Thomás Morales, working along the other 22 presidents to make sure the plans are implemented.

He is working closely not only with the people we hired too, in the Chancellor's Office, but also with Secretary Hitchcock, who came to our board meeting and gave a presentation on how we're going to work together. And we are ensuring that we are giving a report at every board meeting on what's happening with CalNAGPRA and our progress.

Thank you. For us, we had a UC policy on Native American Cultural Affiliation and Reparation which took effect on January 1st, 2022, just a bit over two years ago, following many iterations to incorporate revisions in the California Native American Graves Protection and Repatriation at CalNAGPRA under AB 2836 and AB 275, and important feedback actually, from numerous stakeholders. The issuance of a policy, of course, doesn't mean that it's a conclusion to the efforts. It's the policy that's a way for us to continue to move forward.

We recently hired the UC systemwide repatriation coordinator and this is Glenys Echavarri. Ms. Echavarri has been working with campuses over the past several months to support and expedite their repatriation efforts and activities. There are repatriation leaders on each campus. UCOP has supplied systemwide funding for this work.

And as you know, effective fall of 2022, let me say that we initiated and launched a program called the Native American Opportunity Program that fully covers in-state systemwide tuition and student services fees for California residents or members of federally-recognized Native American Indian and Alaskan Native Tribes as part of our effort to make more opportunities available for students from these communities as we work on repatriation from the campuses out, but also wanting to open our campuses to more students.

I appreciate you focusing on the repatriation. I think that was a sort of very eye-opening figure, hundreds of thousands of items, and so I think maybe the next time we connect, if you can give an update on where the numbers stand now, given that it's been several months since the audit and seems like you're implementing the recommendations, but that should also mean that repatriation is happening. And so I'd like to hear more about that. I'll turn it over to, I think, Mr. Fong. Would you like to jump in here?

Thank you so much, Mr. Chair, and thank you to all our colleagues from the different segments for the various updates. In terms of student housing, I know President Drake mentioned a number of beds that are being developed going forward. If I can just hear from the various segments. In terms of the Student Housing Revolving Loan Fund, the pullback of the 194 million out of the 200 million--similar question asked earlier--but how does that impact your respective segments, are there several ready projects that need your segments ready to go, and what is that demand ready right now?

Well, as I mentioned, we have 15,000 currently under construction, another 6,700 that we'd like to get moving on. The Revolving Loan Fund is critical to our being able to move forward at the pace that we wish. So it was very, very helpful. It would slow down the time that those beds came to market.

Very similar to my colleague here, we have housing going on in many of our campuses, some in construction, some in design, and second, going forward in the HESHGP funding, so they're in design as well. It will certainly slow down affordable housing for our students.

We have 19 projects, close to 5,000 beds, and we've got an additional 30 applications that have come in, but 19 active projects.

Thank you. Now, this question is more on enrollment. I'll pitch this one to Chancellor Christian first. In terms of the enrollment since the pandemic, we know that a number of colleges--you mentioned eight percent increase overall--but some campuses have grown tremendously, and other campuses have declined. What are some of the strategies that are occurring right now to expand room across California at the campuses that have seen decline, and what do you see as some of those opportunities going forward?

So, in terms of the fall, unofficial data that Dr. Hatz had sent me, 89 of our colleges saw enrollment growth above five percent. And there are four colleges that are flat or had negative growth. And we were still waiting for three colleges to report. So this is where we don't have that common data system. We are focused in--there are a variety of different strategies for our high school students. We are much more methodical in our approach to dual enrollment. We're not ad hocking it.

We're looking at pathways, and it's not an invitation to participate because we're looking at an equity agenda. So we are looking at the high school instructional period having a default option with those college classes. So that's one example. We're also looking specifically--just for one more example and then I'll turn it over to Chancellor Garcia--is our adults, our low-income adult population. There is a significant growth in fall of 2023 on those who are 35 and older.

And we have what is called these on-ramps into pathways that we are expanding very intentionally, taking it out through our labor organizations to find the workers. And we are taking these very specific training, like CNA, medical assistant, very, very specific areas of focus in the priority sectors identified by the Governor. These are just examples. I will even talk about flexible scheduling. We're looking at short-term classes that have been highly effective, rather than waiting just for the 15 to 16-week semester.

Great. Thank you.

We have about eight campuses that are having some enrollment issues. We're looking at, number one, obviously, marketing and communication, working with our high schools, number two, and working with our community colleges, number three, one of the things that, because of our partnership, Chancellor Christian has given us the list of ADT completers that have not applied and actually doing the outreach to find out if they can come to our campuses. That is extremely important. We're doing a CSU transfer planner. That is very important.

And we're looking at the California College Guidance Initiative as well, to work with those campuses. And so those campuses are--really, the other thing I will say to you is that I'm working with presidents to really think about who's in your communities, who are those adults, who are those companies that may need to upscale, and how do we work to ensure that we're getting everybody in our communities to come back to the CSU or to be in the CSU?

The other thing we're doing is something called--we have a program that will actually go out to people who have left since 2016. We have 130,000 people that have left, and we are doing an outreach telling them that we will waive application, readjust their GPAs and bring them back, and help them to come back to the CSU.

Thank you.

Well, we, as you know, are quite heavily oversubscribed. Our UCLA campus is the most applied to campus in the country, looking at something like ten-ish percent acceptance rate, given the number, over 150,000 applications for undergraduate admission there. Several of our campuses are in the top ten nationally in the numbers of applications that they receive. So we're limited really by our space and capacity, not by demand. And our job is to continue to do all we can. In fact, we're watching a continued time to degree shortening.

I believe I saw 4.7 years, which is quite spectacular for a four-year university. So we're continuing to shorten time to degree and doing our best to allow more students to have access to a UC education, trying to increase the number of students who graduate in four years or fewer, and then trying to build support services to take care of those students who are living close to our campuses. So it's really, in our case, it's trying to deal with the demand.

Thank you. And for President Drake, thank you to all the segments for the update there. A similar question I asked earlier in terms of the UC emissions for UCLA, UC San Diego, and UC Berkeley, to maintain that commitment for the in-state California's population growth, how is the proposed deferral going to affect that?

I mean, we're committed for this year because this is now February, and so we are really in the process of admitting students for the fall. So we would be committed to moving forward. That gap funding really did allow us to exchange out-of-state for California students. And you saw that we were able in each of those campuses to decrease the number of nonresident students and increase the number of California students. The program amounts to about 1,000 students, 900 students per year. And so we want to continue forward with that. If the program weren't funded in the future, we'd have to reevaluate.

Thank you. And one final question, Mr. Chair. Thank you so much. Last year we had a very robust discussion on Title IX reform and the reports that came out. If we can have each segment, especially to provide updates on the Title IX reforms, where we are, what type of support there is, but also how we can continue to move forward on implementing Title IX reforms. I'll start with Chancellor Garcia.

We are singularly focused on Title IX, not only because of the audit, but also our Cozen O'Connor report that we gave us 150 recommendations and we are laser-focused in looking at those and how we are moving forward. I have lots to tell you about Title IX. You'd stop me when you want me to stop, but starting at the Chancellor's Office, we have an associate vice chancellor that was hired with oversight, and we're bringing in eight experts in those areas to help our campuses.

In addition to that, our campuses are hiring a Title IX person, and they're starting their implementation teams in order to make sure that things are happening according to the report in that report. We're looking at systemwide framework and standardization, and so I've told you about the people we're hiring, and we are also recruiting five new civil rights attorneys within the Office of General Counsel because those are people that are really needed to do Title IX.

The other thing that I should say is through this increased oversight, we're going to do onboarding and ongoing hands-on oversight. We're doing training of our board of trustees, presidents, senior leaders, and supervisors about Title IX. We're going to do systemwide strategic planning regarding training, prevention, and education responsibilities. And we're going to have robust web presence from the systemwide Title IX Office to set an effective and clear tone from the top, and that's very important.

We're also going to have guidance for the 23 universities and the Chancellor's Office to have uniform, clear, and streamlined guidance on how to implement and enforce our policies. So we've issued initial case assessment guidance to make sure we're doing that. We have instructed the campuses on the datas that needs to be preserved for every file. We're going really down to the nitty-gritty here.

We will be issuing further guidance on policy interpretation, disciplinary and corrective actions, informal resolutions, prevention and support, and we are ensuring accountability on the campus through the day to day oversight of those systemwide directors I told you we are hiring. We're doing a communications plan, an education plan, a prevention plan, and in addition to that, our board wants a report on our progress on implementing that at every board meeting.

Thank you, and please keep us posted as well on the progress here. This is something that's been a very big priority for the Legislature, for the Assembly, and I know a number of my colleagues. We have a robust package of bills.

And as a new Chancellor, priority for me.

Thank you. Thank you, Chancellor.

I'll be brief. First, all of our campuses have systemwide title--or have Title IX directors. We have a systemwide office. We actually, as of yesterday, launched a new office of systemwide civil rights, which will oversee now Title IX, disability rights, and civil rights broadly for the campuses. So we hired a very senior national leader. I'd say hired. I got a text yesterday that this person has accepted our offer. So this person will be starting in the--and I think the person--

I haven't communicated with the person yet, so I guess that they're hearing this through me. Congratulations and welcome. But to be starting on April 1st--and it's really to look at Title IX and all of the things that are involved in Title IX, but also disability services and also broadly discrimination against a variety of other protected classes. We want to make sure that we--I'll give this quick example.

If we have someone who's a postdoctoral fellow, for instance, then that person, during a given day, can be acting as though that person can be like a student working with their mentor, like an employee working in a lab independently, or like a teacher working over supervising our undergraduate students. And we find that there are times when a transgression by that person would be treated differently if it were a faculty member, a student, or an employee.

So we want to work to eliminate those differences and make sure that we're uniform across our campuses, uniform across categories of people that we have working with us. We're very excited about this new systemwide office, which we announced last spring, recruited during the fall, and just announced yesterday that it is now open. So looking forward to that.

Thank you.

I'll be really brief. We have a Title IX coordinator on our districts at a district level. And from my office, we have raised the visibility. Our Office of General Counsel recently put out an advisory to all of the legal offices across our different districts, and we're also focusing on professional development of faculty staff so that we're raising the awareness of everyone to really be sensitized to these issues.

Thank you. Thank you, Mr. Chair.

Thank you. Mr. Muratsuchi.

Thank you. A question first for Dr. Garcia. So, it appears that the CSU trustees voted for a tuition increase of 34 percent over five years. Is that correct?

It's six percent each year for the next five years.

30 percent over the next five years? Sounds like--okay. But it's my understanding that with that 30 percent increase in tuition over five years, that there is a commitment to set aside a portion of that money for financial aid so that--similar to at least some University of California campuses--that a significant percentage of students would not be paying any tuition. Is that correct?

One-third of the tuition goes into our state undergraduate grant.

One-third of which fund goes into the--

Of tuition. It's SUG.

Okay. In five years, what percentage of undergraduate students will be tuition-free?

All I can say--and let me give you what I know--what I know now is about 60 percent of our students do not pay tuition because of financial aid. Currently. About 80 percent get some form of financial aid.

Okay. When I first heard the 30 percent over five-year increase, that sounded very alarming. But currently, 60 percent do not pay any tuition, and--

Approximately 60 percent. Right.

And so this tuition increase includes a commitment that that commitment will continue?

Yes. And let me add a little bit more because we're working on--we have a financial aid task force that has board members and our team looking at financial aid as total cost of attendance. For the students, it's not so much tuition.

Sure.

It is total cost of attendance. And how do we use all our funds to look at how do we help students with total cost of attendance?

Yes. I fully understand that, but I just want to ask--

Just wanted to underscore that because I think that's important for our students.

Yes. 34 percent. Okay. Question for Dr. Christian. So are the information provided to the Committee and the Budget Agenda indicates that community college enrollment plunged between 2019 and 2021, and only 13 of 72 college districts ended the 22-23 school year with higher full time enrollment than in 2019-2020. You indicated earlier that there is over 80 community college districts that are showing on a trajectory of increasing enrollment by over five percent.

That's for fall of 2023. The years that you were talking about, we went from 2.1 million to about 1.8. So that was a huge decline from 2019, and we started seeing the uptick in 22-23 and then now in 23-24 the fall 23 numbers, those are the preliminary numbers that I was sharing.

It's a significant growth, and we believe that by the end of this spring semester, we will be at the 2.1 million level because right now, with the fall numbers, we are above two million, with three colleges still not reporting.

Okay. So in other words, you project to be--

At pre-pandemic numbers.

Pre-pandemic levels. Okay. And just for my clarification, the community college growth funding includes funding for the dual enrollment students?

Yes.

Okay. I just wanted to say that I'm a big supporter of the dual enrollment program. I know many of our high school students are taking advantage of the opportunity to pursue the most rigorous coursework that they can show to our university application officers, and so the dual enrollment.

Moment program is definitely a popular program in my district. Thank you. Turning to the questions regarding capital facilities. So our staff analysis provides a list of capital projects that are projected to be funded using the lease revenue bond that is to be proposed in the May revise for Dr. Drake and Dr. Garcia, could you talk about what capital projects would not be covered by the lease revenue bond that could potentially be covered if the University of California and the California State University were included in the proposed education bond?

Yeah, and I wouldn't be the one to answer that. That's too granular for me. So let me say that we'll get back to you on that.

Okay. All right. Fair enough. Okay. I may get the same response, but for Dr. Drake. As a former UCLA student, I noted that UCLA has in recent years made at least two high profile acquisitions of capital facilities. One at the Westside Pavilion in West Los Angeles, and the second, the acquisition of the former Marymount California University in my district and Palace Verdes. How are those acquisitions funded?

Gosh, I will say in both cases. First, the Westfield Mall was funded in part by the money that we mentioned earlier today. There was a provision in the state budget for moving that forward. I will say that this is a seven year project that has to be built out, and so the speed and the fullness of the build out will depend on funding that comes forward through philanthropy and other things over these next several years. But initially, that's where the capitalization came.

And actually, I don't know exactly how. I'm not remembering exactly how UCLA funded Maramount. The issue there was, though, that I mentioned the incredible pressure there is on the campus for space. And so there's an opportunity to build into space and generate revenue from the students and faculty, others that will be there. So there's a revenue stream as we can grow the enterprise. And this was seen as a great opportunity to do that. And as you know, it was quite effective. It was quite cost effective.

I certainly am proud not only as a UCLA brewing, but also seeing signs in my district of UCLA South Bay that I requested chancellor block, that I wanted to have a UCLA South Bay sweatshirt. But I'm still trying to understand, given that we're having conversations about the education bond and what alternate sources of financing the University of California has at its mean, is it fair to say it sounds like philanthropic dollars at least had some part in the acquisition of the Westside Pavilion.

Yeah. Broadly, all of our growth, philanthropic money is important to our growth. Broadly, we have growth pressures that exceed non philanthropic funding. And then we also have gone to debt markets when we're growing effectively. And it's a balance between those that help us. And when you asked about the different projects, we have billions of dollars of construction going on at a given time. In particular, I would say, in our health sciences now there's a new hospital going up in San Francisco and other places. So there's great pressure, but we build into the future and try to balance the financing for those things appropriately.

And I certainly appreciate, I'm a UCLA health Member, and so I appreciate that option. But am I correct in understanding then that in terms of the acquisition of the UCLA South Bay campus, that there was at least some philanthropic dollars involved in that?

I'm sure, yeah. And I'll say this, that the property, I'm going to remember the purchase price was relatively modest. We then have to make sure things are retrofit appropriately, and then we can build the facilities for students and faculty to occupy. And the quality of those, and the rate at which we build those depends on a variety of things, including philanthropic support.

Okay. But I would appreciate if your staff can follow up in getting me a breakdown of how those acquisitions are financed. Thank you. For Dr. Garcia, I met with some of your representatives two weeks ago, and they were very quick to emphasize that CSU was not in the same position as the UC in terms of having access to those kind of philanthropic dollars.

And that's absolutely true. I mean, I am thankful we have the UC in California, but their alums are in very high positions. We are serving, really, the workers and the great minds that take care of our hospitals, our teachers, the teachers. We have the social workers. These are the individuals that are going out into our communities that don't make the kind of know. We do have some CEOs, but not at the level that the UC has. We do raise money.

Our presidents all raise the money, but it's not to the levels of the UC. We do have donors who do give us dollars for buildings, but again, not at that same level. It's the difference between being a research one and a regional comprehensive University.

And I could talk about that because I served at the American Association of State College Universities with 350 or 400, depending on the year, institutions that we serve our region, we don't have that high philanthropic and endowments that our research universities we so privilege to have in this country.

Yeah, I just want to say in closing that I would love to support all of our public higher education segments with our education bond. As with the budget. We're having very difficult discussions about bonds, what bonds are going to be moved forward, how large are the bonds going to be, and who's going to be included in the bonds. And so thank you very much for.

Informing that tiny thing. Just I appreciate, and we've been talking about philanthropy, and we could not be more grateful, let me say, a significant fraction of the philanthropy funds research at very high levels, very expensive, very high levels. Another significant fraction funds our hospitals and healthcare facilities, again, at very high levels, very expensive things. The funding, which we appreciate broadly, that comes from hundreds of thousands of donors that helps support the educational mission, is more modest. And I just want to make sure we don't conflate those funding sources.

So, for example, the Westside Pavilion, I understand, is to be going for immunology research. Is that part of the MediCal?

So part of that's part of the medical. Then also there'll be Quantum computing that goes there. So that would fit in the science and health, science and technology arena that I'm speaking of. Big numbers, but those are very expensive things.

All right. Thank you. Thank you. You heard me ask questions earlier on the UCLA acquisition. I'm obviously awaiting what that means, especially if it's a seven year project, what that means in terms of potentially additional investments that are expected of the State of California. So we'll be awaiting what that cost breakdown is and exactly where that project stands.

But 1.0 I appreciate, our chair of education and leader of our bond conversation acknowledging sort of that disparity, because it's not just the access to the Philanthropic Dollars that then build you the buildings, but then when you have the buildings, you can bring more students, and then that means that we Fund those students as a state. And so it's good. We always want to serve more students. That's absolutely the case.

But then there's some that can do that and some that can't based on who can raise the money. So there's a disparity there that certainly, I think is worthwhile, a conversation. I want to ask the three of you, because you heard your students. I think you were all here when the students representing the three of you spoke so eloquently, and all three of them, and again without any prior coordination, spoke about Cal grant reform and the significance that it means for students.

Can you share from your systems perspective what that means to you? Have you had a chance to review what Cal grant reform implementation would do in terms of access, number of students you could serve on your system wide level? We'll start with President Drake.

Well, we have a program that's so, first, Cal Grant is very important, and really nation leading in its support of students. And I will say that we have a plan to have a debt free pathway available to all students admitted to the University of California by 2030. And Cal grant reform is an important part of us getting to that goal. So fingers crossed. I think that would be a wonderful thing about now, about, as I mentioned, most of our California students leave with no debt.

So that's terrific. And the debt that our students leave with is lower than the national average by about a third, about $17,000 on average, versus closer to 30,000 for the national average. And the last figures I looked at said that 39% of our students had debt and 61% didn't. So that's great. We want to continue to drive those numbers down and calculate grant reform would be an important part of us being able to get there.

That's very helpful. Just to be clear, your 2030 debt free plan relies on Cal Grant reform. Thank you.

I haven't had a chance to really look into. I know about Cal Grant, but if you want the details, I'd have to get back to you on all of those details to see how it's going to work for the CSU. \

The two quick data points that are in my head, it's 110,000 new students who would qualify, and what we're looking for is sort of parity with our colleagues across the CSUs and the UCs. It's not the tuition, it's the total cost of attendance, is the primary focus.

For community colleges, but 110,000 would benefit at the community college level.

One other thing I'll say, I know that the data I saw just yesterday on this meant that there's some adjustments, there's some pluses and some minuses in the reform package. So I'd also have to be very thoughtful about how those will affect our long term.

Yeah, sure. And I'm not going to hold you to specific numbers. 110,000 might be, but just to get a sense of what it means to a student at each one of your systems, that's important for us to know.

What I'm hoping is that it doesn't happen with the movement for short term Pell. The devil's in the details, right? That when a student goes to a community college, how many Cal grant can they have as they move forward to the bachelor's degree? Because many of our students, as you well know, leave the community college and come over to us so the devil's in the details, and that's why I want to look at the analysis.

Got it. Now, I have maybe one question for each of you, which, again, are sort of, as we stated at the beginning, some of the difficult conversations that we need to have. Enrollment, community college here. You talk about the 2 million number. What is the FTE equivalent? Because the data that we have still shows, at least as of fall of 2023 on a full time equivalent basis, still under pre pandemic numbers.

Is that still the case, or are you saying that the data you have now indicates that the full time equivalent is essentially back on par to pre pandemic 2019 levels?

So the fall of 2023, it's a little over a million ftes. The student headcount is over 2 million, but the ftes is over a million. I think those are the right numbers, and I can quickly check in my notes here. The pre pandemic number, I think, is 1.4. And we'll have to see how the spring of 2024 shakes out. I would speculate that our student headcount will be at that 2.1 million or more by the time we wrap up 202324. With ftes.

We'll just about potentially make that number.

So I think we need to check in with each other. We have numbers that are very different, and so let's follow up on that to understand. Similar to CSU, we have an FTE issue. We see that some of it is coming from primarily from summer enrollment. I think we want to talk about who those students are and making sure that we are accurately counting the ft.

But what I want to ask you about, actually, it was in our report, is the graduation initiative 2025, which the gaps continue to persist, and we're now one year away. And so I certainly would like to hear from you, as you dive into this four months in, what your thoughts are on the progress that has been made and the progress that still needs to be made, which is pretty significant.

In the graduation initiative 2025, we have brought in about 150 additional degree holders because of the initiative. But you are correct, the equity gaps is stubborn, especially after pandemic. And we have many things that we're doing with our campuses to have an equity action plan to close opportunity gaps. Number one is we're looking at reengaging our underserved students.

You heard about our second start pilot program that I mentioned earlier, where we're going to those that left us in 2016130,000 of them, trying to bring them back. Most of them are underserved students. We're also working with our campuses on something called finish Strong, where we're actually having our campuses look at how much more do they need to do and get some real intentionality with these students, because sometimes it's only a couple of credits and they need help in advising to get them through.

And we're doing a year of engagement with our campuses. We had a wonderful, wonderful seminar with all 23 campuses talking about how they're going to get into the year of engagement and how we're using promising practices, showing each other how to get to the numbers that we have to have. So we're on it. The equity gap is stubborn. We know it.

We also have the board and us have started a black student success initiative where we've put in $10,000,000.01 time money to actually start having efforts at each of our campuses. That is not only a CSU issue. African American students are not going to college all over the country.

But we want to make sure that we are going into our communities and making sure we're using the 13.0 plan out of that work group that was really listening to students, faculty and staff, not only for the students, but hiring more African American and faculty and staff.

Okay, I will just say now, maybe it's sort of a warning. This is something that is around the corner. And so the work was done a few years ago to set on a trajectory, and it might need more than just continuing on the trajectory. It seems like you're doing some initiatives to try and really try to close this.

But I think this is something that needs to be continued focus given, regardless of resources, because this is a commitment made prior to any expectations of where we would be. So something we'll keep an eye on, for sure. President Drake and with you. On the issue of Californians being admitted. UCLA, 9% of California applicants, of freshman applicants are from California. Berkeley is at 15. You've got campuses like Merced, Riverside, Santa Cruz, well over 60% and more. Again, a difficult conversation.

We understand the history of some of the campuses that are much more competitive. But I think you and I and all of believers and supporters of the UC believe that an education at every UC campus is valuable and important and meaningful. How do we get more Californians into the schools that are keeping. Californians are not as accessible to Californians today. I'll just be very blunt now, without additional financial support to the University, there's something systemic about this gap that we need to talk about and address.

You're saying in the selectivity of the campuses, correct? Yeah. And so there's a tension that we have. So let's take UCLA. As we mentioned today, it's the most desired public University in the country. So 150,000 people apply for the slots. The entering class is going to be 6000 students. The math just works the way the math is going to work.

We are doing what we can to increase throughput so that we don't have as many fifth and 6th year students and students are able to graduate on time. When I mentioned that our time to degree is going down, that's great. We appreciate that. We've actually, since the pandemic, increased the number of online courses and other things that are available. That works, in effect, to increase the capacity of the campuses and the throughput when mixed in with the other course offerings that we have.

So we're doing all we can. We mentioned the growth of the campus in a couple of areas. The South Bay campus is actually to provide more opportunity for students. And so we are attempting to grow the number of opportunities we have. But that is also faced with an extraordinarily large denominator of desirability. And it's a strange thing.

The better we do, the better the value appears to be to the broader public of the institution, the more people apply, but then the smaller fraction of them can be accommodated at any one of the campuses. So our goal is to continue to grow slots. As you know, we have a plan, maybe mention this, but we have a plan to grow 20,000 additional slots across the University over this decade. That's the rough equivalent of another campus without starting another campus.

And you mentioned, gosh, how to do it without huge amounts more money. As we make the campuses more efficient and grow additional slots without building as much new bricks and mortar, that is a more efficient and effective way of doing it. So we're doing those things, but it's an ongoing effort to try to create opportunity for students broadly to take advantage of our educational facilities.

But I'll just say it does feel a little bit, though, that we're turning sort of a blind eye to the fact that if we give the system more money, more Californians will come, but if we don't, they won't. And so I think in the spirit of, again, having very difficult conversations, this is one that I know previous chair was really focused on, is how do we make sure Californians have access to these institutions.

I think we need to really focus in on what are the other pathways. It's great if you grow, but if you're growing and you're only still providing 9% of Californians access to all these new slots you're creating. It's growing for the purpose of not for California serving students.

But I hope that doesn't seem, that doesn't mean 91% are not for Californians. It means that of all the people who apply, we can only take a certain fraction of that number when we have six figure applications at San Diego and Los Angeles and Irvine, et cetera. And I will say that the program that you mentioned, the one program that's exchange program that allows for an additional thousand California slots, we've had, I would think, I look at my numbers, 6000 additional California students, broadly.

So we've made room for. We've admitted, we're enrolled. There are thousands more California students as we're moving forward over these last couple of years. And our goal is to produce thousands more slots for California students as we grow. True.

This conversation will continue because that only came at a cost of $31 million. Additionally. And so what I'm hoping to have a conversation around is how do we do this without in a world where we don't have those resources available anymore?

And I just want to be very honest with you, as I've told you before, all of you, that this is a year and there will be a few more of these years coming where we just don't have the resources to Fund initiatives that go above and beyond what we need to do, which is to ensure student access and success. And so I know that you have incredible talents, you are all great minds, and that you can help us figure this out.

So I look forward to that continued conversation. Yes.

Could I just read out some numbers real quickly? I'm so sorry. On the FTES question, and I'm sure Mark Martin will double check on them. So the numbers here, real quickly, we were at 1.148, then we went down to 1.135 million. We went down to 1.21. We dropped down to 928971971,000. And this year, 2320-2324 the preliminary numbers, p one. We're at 1.61. This is the total resident and nonresident ftes.

We will continue that conversation as well. Thank you very much. Before you go, though, Mr. Sally jumped on and would like to ask some questions, please. Thank you, Mr. Chair. And nice to meet each of you. I don't think we've ever met. And Chancellor Garcia, I'll just say they may have the donors, but you have legislators.

Yes, I do.

Cal Poly Pomona. So there you go. There you go. See? So I'm glad you brought up the repatriation for Native Americans. This is an issue that's really important to me. I am on the Native American caucus, and you mentioned a new statewide coordinator and leaders on campuses. Can you tell me how much of the budget is allocated to repatriation?

How much of our total budget?

Well, our total budget is very large, and the amount is billions. And the amount associated to repatriations is millions.

It's in the millions. Okay. Zero, it's in the millions. Yes.

Have you seen this 2022 report by the State Auditor?

I have to see that one to make sure I've seen it.

Yeah. This is in November 172022 Native American Graves Protection and Repatriation act. They did. The State Auditor prepared a report. Among the key findings, he found that the UC office of the President wasn't providing sufficient funding to support repatriation efforts and that there were inconsistent procedures in place. You're not sure if you remember the audit.

I'll say that I would have seen it electronically, not in that form. But let me say that that was 2022 and that we have a new policy that started in 2022 and a new statewide or Director that's been hired since then. And those efforts are continuing.

My concern is it's not an issue of policy, it's an issue of compliance. Because you acknowledge that the Repatriation act applies to the UCS. You acknowledge this is the law?

Of course.

And it required the campuses to have inventory, all remains and cultural items by 1995. So this isn't something new. It's been violated since 1995. And then 2022, the State Auditor did a report saying there's still no compliance. There's huge inventories of cultural remains and artifacts, and they're not anywhere near being cataloged. So I appreciate the policy, but my concern is it seems like there's campuses that just don't want to comply from the Cal State. Have you reviewed this report?

I know about the report. Definitely. No, I wasn't here in November 22, but I certainly know about the audit and the report. As I said earlier, all of our campuses are working with the tribes, with the Committee to start beginning the repatriation. I wish I could have the information on Humboldt, who they just repatriated land, that they're going to work with that particular tribe.

Every campus is not only documenting it, but then bringing in someone who's going to work with them, to work with the tribes and making sure that the tribe voices on our committees, which is why Secretary Hitchcock is working with us and why he came to the board meeting.

There's something I'm missing, because I am asking at ignorance, because I don't know. I mean, if you have remains, why does it take so long to give them back to the tribes if my ancestor or my relative was being held by some Professor at UC Berkeley doesn't belong to them?

So let me say I agree 100%. So, 100%, I would love to give back all the remains we have last. I was going to say yesterday, but I mean last year. So I want them to be given back. I think it's ridiculous that these remains are held and they should be given back immediately, period. That's my position. Well, why not? I will say that there has been over these many years. There's incredible. There's a difficult time sometimes identifying the remains. Where do they go?

I will say that the places that they would go, the people who would be there, don't agree necessarily on who this is and where these remains should go. And so the process of identifying all of these pieces, and some of them are extraordinarily small, has been painstaking and difficult, scientifically, anthropologically, and then also politically and socially, to decide how do we appropriately transfer these remains back to the right place. Let's say I had a magic wand. I would do it now.

And I'll say there are people who are working on it full time, all the time. It's a painstaking process of going through things that were collected inappropriately and tragically and horrendously over decades and decades. And now the effort is to try to do this in a respectful, appropriate manner. But I'd love to do it as quickly as possible.

Well, I appreciate. I mean, the chair mentioned maybe holding a hearing specific on this issue, which I would fully support. So we can maybe dig into it, because I know that's not the focus of this now, but I would love to just know sort of numbers, like how many artifacts you have, how many remains you have, and what the timeline is to repatriate all those in a reasonable timeframe and not just a decade or two.

Let me say I agree with my colleague here, President Drake. The other thing is, what we're finding is the tribes have to be ready to accept it and house it appropriately. We're finding that as well. So that is another thing that we're working with, like President Drake, if I said this publicly in my board meeting, that if it were my ancestors, I would be really upset.

So we want to do this yesterday, but we have to do it with the voices of the tribes and care and making sure that we're doing this respectfully for them. And we at the CSU, and I know we all do apologize for it because this is wrong. And I want, like, period, the end. But we have to do it properly with the tribe's involvement.

I appreciate this frank conversation. I will tell you, I speak with a lot of tribes, and I'll be honest with you. They say that the University is slow walking. They say the universities are slow walking and they're not making it a priority. They do want it back. I'm going to end on this topic with one thing for President Drake, and not to pick on you, but the ucs tend to be more the focus of these conversations.

But there are reports, know, I've gotten reports like Berkeley has this Phoebe Hearst museum, and we hear things that they have directors or professors there who intentionally withhold, hold back tribal reparation, repatriation items, and they hold it in their own personal educational or teaching collections. You have people in your system who feel like they have a right to hold on to these. And so that's something I'm going to continue to look into.

And I would welcome a hearing specific on this, but if that's going on, that's not acceptable. And like I said, compliance with the law is not optional. I mean, this was supposed to have been done in 1995. So let's get it done and let's get you the support and resources you need. One question for the community colleges not on this topic, and I appreciate your responses.

This issue with ghost students, this was a big topic last year where you had fraudsters enrolling students online to get their financial aid and then also taking up slots in college classes. Can you tell me if that's sort of been addressed or is that still going on? I mean, this is a big deal.

Yeah, it's being addressed, and the numbers have gone down. And first of all, I want to thank the Legislature for the investment that you gave us, the ability to start a reporting structure. So you have the actual admissions, then you have the enrollments, and then you have the financial aid. So when you look at the financial aid drawdown, it's very minuscule.

So when we go from the enrollments, we have now systems in place to be able to identify that these bots are not regular students, and then we're able to get them out of the system before they draw down on financial aid. So we have that data and we can submit it to you. Why not just recommend people, like, when you apply to come to the office and show, like, a government ID or something.

Well, a lot of our services are online, right?

At least once. Come and show your ID.

Yeah, we are implementing an idME, a virtual idME. So when that rolls out, I think we're going to be able to lock down on most of the bot activity. But the long term solution is going to be when we have a common data system, because we have 72 different districts and they have different levels of technology infrastructures. The districts that are more affluent have really invested in the technology infrastructures and others don't.

So we are really moving to have sort of a common technology platform so we can then start deploying smart technologies to take care of hacking and these fraudulent bots.

I appreciate that. I mean, our resources are so valuable, we can't have any of it go to fraud.

No. Thank you for that question.

Absolutely. And I appreciate you all being here today. This is such an important topic. And last thing I'd say, Mr. Chair, maybe something to look at about encouraging more Californians to go to college. I know that I was in the avid program, and that was a huge deal when I was in high school.

I don't know how big the program is now, but that really focused on taking first generation Californians and then making us feel like we had this pathway and opportunity, because I had no idea. I didn't know what the SAT was. I didn't know what to expect in college. And so programs like that, that sort of have a bridge, and we toured campuses, so I don't know where the state is on avid, but that's another thing to look at to that pipeline. So thank you. Thank you.

One question, which, Dr. Christensen, I don't think you'll have an answer for today. There was $60 million in the budget, governor's proposed budget for nursing programs at community college systems. There is no additional information that I've seen. Are you in the conversations about how that program will be implemented at this point?

Yes. We've got in our Vision 2030 demonstration projects to increase a number of nursing graduates. We are down to looking at actual college campuses, looking at what it would take to double our output. So we are in the middle and can implement right away.

I think we're going to have a hearing specifically on these topics. We'll ask you more about that and see how that program is going to roll out. Thank you very much to all of you. Thank you for the work that you do day in and day out on behalf of our students. Appreciate it and we'll see you here, I'm sure again with that, we're going to go to public comments just to everybody get comfortable with these longer hearings.

They will be the norm at this Committee as we dive in really deep on every single issue on a going forward basis. But part of that process certainly is the public comment. And so we will take folks. Now, I'm just trying to see how many folks want to speak so I can allocate enough time to get you chance to express your point, but also give everybody a chance to say something. So I think we're okay with 1 minute if you have to go over.

We'll see if that's enough. But please, as you come forward, introduce yourself, who you're representing, if anybody, and share your thoughts. Thank you so much. And I'm sorry I cut first in line, but I need to run down to Turlock to teach an evening class. Hold on a second. Excuse me, can we ask Members of the public to please keep it down so we can hear our speakers? So thank you very much.

My name is Dave Kolnick. I'm a Professor at Stan State and I am the California Faculty Association, the associate Vice President for chapter presidents in the north. Thank you so much for letting me be here. I'm advocating for full funding of the CSU. In my 20 years at Stannis law, I've served on numerous budget and strategic planning meetings. I know how the investment works. It pays dividends, like our chancellor mentioned very briefly. Talk about the human side of that as well.

The money that the state spends comes back multifold and change lives, change communities. For example, I have an 11th grader. Three of my former students are his teachers. What they do for their families and for the communities are amazing. And it's based on what they do. One leads a model UN, another raises money for school projects and facilities. The third brings students to the junior states person events. These are things that they learned at Stannis law and they're carrying them forward.

I could have talked about healthcare, many other things. Thank you so much. Fully Fund the cs. Thank you very much. Have a great day. Hello everyone, my name is Sergio. I'm part of the UC Student Association. I am their campaign chair and I'm here to advocate for full funding of Cal grant equity framework. This is a framework that has been in place and has been a priority for our associations. And I want to reiterate that the Legislature must complete its promise by funding this framework.

This will help more students be eligible to attend affordable public education. Many of which you heard of the leaders be very prideful on. Over almost 110,000 community college students would be able to benefit from this. That is about a 60% increase on current eligible students who are for Cal Grant, and about 3000 more undocumented students would be able to benefit from this.

Someone like my mother would have been able to benefit from this if she didn't have to pick between feeding me, her son, and her other two children or attending college. So this is very personal to me, and it means a lot. So I'm really advocating for you guys to Fund Cal grant equity framework to its 100%. Thank you so much. Thank you. Good afternoon.

Barrett Snyder, on behalf of the Institute for College Access and Success, also knows in tcos respectfully recommending that you guys prioritize implementation of Cal grant reform. It's a really important and unique opportunity for the state to update an outdated system and really improve access and affordability for a lot of students. Over 100,000 students. Thank you. Thank you. Good afternoon, chair Alvarez and Assembly Members. My name is Michael Lee Chang. I'm a second year undergraduate student at Sacramento State.

To graduate in four years, I need to balance four classes, five jobs, extracurriculars, relationships, sleeping, and just eating meals. I have early morning classes this semester, but I can't wake up early to eat breakfast because I go to bed around 04:00 a.m. After doing homework. I can't do homework during the day because across my five jobs, I work over 40 hours a week. That also means I don't have time to eat during the day.

By the time I get back to my dorm, I'm so exhausted that I pass out into a nap. By the time I wake up, the dining commons are closed, so I can't eat dinner either. In my first semester of college ever, I lost 15 pounds, leaving me severely underweight. And I'm standing here thanks to the robust investment that the state has made to our CSU system. My faculty is there for me. The staff are there for me. I have people to talk to.

Thanks to all the state work that has done for the CSU, we need to continue that investment and maintain that the CSU is fully funded, or else students like me. Students. When a student graduates from the CSU, that's a future nurse, a future teacher, a future Assembly Member. Students like those who we need to ensure they don't fall through the cracks. That's who we're trying to help succeed. I urge this Committee to invest accordingly. Thank you.

Good afternoon, chair Alvarez and Members. I am Dr. Margarita Berta Avila I'm a Professor in the education Department at Sacramento State and Vice President of the California Faculty Association. Thank you for being such a strong, thoughtful champion for public higher education. I'm here on behalf of the professors, mental health counselors, coaches and librarians who work with students each day to ask that you match the governor's commitment in the January proposal that includes ongoing support for the compact increase.

Today, three out of four students in the 23 campuses California State University system are students of color. While in 1985 the majority of students were white. We have seen that as the student body of the CSU becomes darker, state funding for each student has become lighter. We cannot sit back and bear witness to a disinvestment in California's future. However, funding to the CSU needs to come with transparency and accountability. Especially in this tough budget year.

I believe it is our duty to ensure that public dollars go to core student learning conditions so they can be supported and thrive. To this effect, as you all carry the heavy task of making tough budget decisions, I urge you against any additional increases to student tuition. The CSU cannot contradict their purpose and pay for their basic operating costs on the back of students and faculty. The CSU has the resources to adequately pay for students and faculty.

We are all smarter than to turn a blind eye to false austerity claims. I have had the privilege of teaching future California teachers at Sacramento State for 23 years. It is an honor and a privilege to work with many students that come through the CSU doors. Many are first generations work several jobs. Once they graduate, they come to truly uplift their communities, our economy and California.

Thank you. Thank you. Good afternoon, Mr. Chair, Members of the Committee. Thank you so much for your commitment to public education and to the students and to commentary from the public. My name is Kevin Weir. I'm a 20 plus year Professor of sociology on the Sacramento campus and for the last 10 years I've been chair of bargaining for the California Faculty Association. I didn't have any prepared comments today. I wanted to respond to some of the things that I heard in the room.

The first thing is Mr. Essayli question about NAGPRA. I wanted to let you know that 15 years ago, one of my friends and colleagues in anthropology Department, who was the NAGPRA officer on campus, resigned and left the University because of the level of liability that she carried because of the non compliance with NAGPRA. She didn't leave because the tribes were not ready to accept their ancestors back.

It was a lack of resources and support from the campus so I've heard today that enrollment is improving already at the community colleges and hopefully at the CSU. And yet several campuses I'm hearing about austerity measures. Some campuses have even begun job loss. I urge this Committee to examine the record and the reserves carefully and not fault for exaggerated austerity language. Several years ago, CSU management lobbied effectively to no longer audit each campus every year.

This Committee should examine the outcome of this and take note of the wildly increasing cash reserves on hand. There is no legislative oversight on reserves, but there should be. Each campus should have yearly audits reported to this Committee and to the public. In tough budget times, we must protect the core mission of the CSU with legislative oversight and engagement. It is crucial to prioritize students and the faculty, especially the mental health counselors who serve them in tough budget times. Thank you so much. Thank you.

Good afternoon, chair Alvarez and Members of the Committee. My name is Molly Maguire with the Campaign for College Opportunity. The Governor's Budget largely continues the state's investment in college access and student success, and we're deeply grateful that amidst fiscal uncertainty, the January budget proposal protects and preserves higher education funding. That said, there are a few areas of the budget that merit additional attention from policymakers.

We agree that reliable base funding increases to the UC and CSU are critical to the segment's ability to plan for and Fund vital student success and retention work. But those increases are part of an agreement pairing funding increases with meaningful improvements across several areas, including access, completion and affordability. We would argue that those improvements have been uneven at best, in particular around transfer student success and the removal of equity gaps.

We would also argue that some of these improvements, in particular around transfer student success, are relatively Low cost, suggesting not a resource problem, rather a resistance to treating transfer student needs on par with first time freshman needs.

We look forward to working with you over the next few months to prioritize the segment's commitment to making good on all of the compact goals, even the difficult ones, and to find a path forward to funding Cal grant equity, a financial aid framework that holds enormous promise for our most vulnerable students. Thank you.

Good afternoon, Chair Alvarez and Committee Members. My name is Jun Jang, and I serve as the Undergraduate Student Body President at UC Irvine as well as this year's Undergraduate Co-chair of the Council of Presidents. Today, I'm here to ask that the Legislature fully fund the Cal Grant Equity Famework in the 2024-2025 state budget.

Like many, including Members of this Committee, I came to my university as a low income, first generation student and the son of two immigrants who never had the promise of higher education. I am myself and only able to attend university due to the robust aid currently offered by the Cal Grant. Thousands of my peers, however, are currently deterred from higher education by an unaffordable price tag, unable to thrive at their fullest potential.

The opportunity is now before the Legislature to extend the promise of higher education to over 130,000 students, a renewed commitment to serving our most marginalized students, our students of color, our undocumented students, our parenting students, and more. Through this investment, we'll be able to see long term returns on student recruitment and retention, basic need security, student well being, the broader state economy, and so much more.

California has always been a trailblazer in these matters, so I ask that the Legislature remain committed to their students and fully fund the Cal Grant Equity Framework to champion the well being and success of our students for years to come. Thank you.

Thank you very much.

Good afternoon. My name is Sonya Brooks. I am the Vice President for External Affairs for the Graduate Student Association at UCLA, and I'm also a board member for the UCGPC. I stand on behalf of the thousands of graduate students within the UC systems who are in dire needs. Today we heard data presented for the wonderful strides that are being made.

However, none of those data presented or represented what graduate students need. And even though that the data presented were for undergraduates, part of their trajectories include the sacrifices of graduate students. We play so many roles in the lives of undergraduates, and they are because we are. Graduate students, however, are actually dying, literally and figuratively. We are suffering from housing insecurity, food insecurity, as well as a lack of adequate mental health services. We need your help and implore your assistance in supporting the increase of the budgets for the UCs because we really haven't seen a lot of the philanthropic efforts that were mentioned earlier. Thank you.

Thank you.

Good evening. My name is Ernesto Arciniega, a first generation student and Mexican immigrant currently pursuing my graduate studies at UCLA. I also serve as the Director of Legislative Affairs at UCGPC, the organization representing all graduate and professional students across the UC system. Thanks, Assembly Member Alvarez and Fong, for meeting with us and our President Ryan yesterday for Advocacy Day. I want to address the lack of attention given to graduate and professional students today and in the past.

It's crucial to prioritize their needs and concerns, especially in funding and budget discussions, and to always consider the diverse range of nontraditional and underrepresented graduate communities, among them undocumented students and graduate students with dependents. Furthermore, I urge you to prioritize funding for the UC budget, the housing grants, and Revolving Loan Programs. We must prioritize supporting UC graduate students, ensuring no one is left behind. Gracias. Thank you.

Thank you. Just want to note you're all doing a great job sticking to around a minute. We appreciate that.

Okay. Hi, good afternoon everyone. My name is Zaira Vidal. I'm a former graduate student at UC Riverside, but I'm currently VPA from the Graduate Student Association. I'm a DACA holder for a generation. And today I want to share the urgency to address the problem that we have in a lot of campuses and regarding the dismissal of graduate students from their programs without any valid reason.

I believe there's a need to pressure the campuses admed and to audit the departments to ensure and provide data for retention rates and accountivity for students that are dismissed from graduate programs due to issues, maltreatment, discrimination by faculty and administrators towards students like me, from underrepresented groups, mainly first generation students and undocumented students, that a lot of times do not share these experiences due to a lack of knowledge or they just fear the system.

These issues continue increasing more and more and no one does anything about it. The policies and funding that is received supports the enrollment of diverse groups and in reality, this is not being taken in action. It's not consistency on retention as students are forced to leave their programs, which has several mental, financial and professional consequences on students.

Thank you.

Hi. Good afternoon, Chair and Members. Carol Gonzalez here on behalf of Hispanas Organized for Political Equality. We want to highlight the immense need for the Cal Grant Reform Act, and we want to align our comments with the Chair and the Members today. There is an immense need to really support our students.

While we recognize the state's budget deficit, this proposal presents a really great opportunity for us to transform college access and affordability for over 130,000 students, many of which have been historically underrepresented in higher education, of which 65% are Latinx, more than 50% are women, and nearly 65% are first gen, and nearly one third of those students are student parents. And also here on behalf of Long Beach City College. We also want to align our comments with the Cal Grant Reform Coalition and express our need to continue to support student parents and student housing. Thank you.

Thank you.

Jackie Gonzalez with Luma Action, here representing a variety of immigration legal service providers and thousands of undocumented students across the CSU campuses, of which there are approximately 10,000. For the last approximately five years, the state of California has allocated $7 million to provide immigrant legal services across all 23 CSU campuses. It has included services to not just students, but their immediate family members, faculty, and staff, and education and outreach to the greater community.

I cannot emphasize the impact that this has had, not just at the student level, but for families who have resided for decades, particularly in underresourced areas of our state, children of farm workers who have really been able to access and legalize their status after decades of being here. It's not just services, it's economic mobility. It's ensuring that students that graduate from CSUs actually have work permits and can pursue careers. The Governor's Budget proposes cutting this program from 7 million to 1.8.

I will emphasize that the CSU system across the state also provides an infrastructure that is critical as we see immigration enforcement rise, something that we can expect and predict to happen later this year. We would ask this Committee to restore this funding and maintain it at 7 million when the time is appropriate. Thank you.

Thank you.

Thank you, Committee. My name is Keith Ellis. I'm a UC Regent. I'm here in support of President Drake's presentation to you this afternoon and in support of the students' request to fully implement Cal Grant Reform. Also, I am in support of the Opportunity for All legislation that is proposed. Thank you so much.

Thank you.

Good afternoon. Andrew Martinez, the Community College League of California. We want to thank the Legislature for their investments in the community colleges in the previous budget years. We are deeply appreciative of the Governor's Budget this year. Recognize that it's going to be a challenging year for us, but we are appreciative of the investment the Governor has made for us. We are also hopeful that Cal Grant Reform can be successful this year. We remain hopeful on that point, and we want to thank the Administration for their language on the affordable housing lease proposal as well.

And as we go through the year, we want to encourage you to think about predictability, stability, and flexibility for colleges so that we can ensure that we are strong and able to serve the students that are coming to our colleges. Thank you.

Thank you.

Hi, I'm Anna. I go to UCSB. I moved here from Missouri. I just wanted to say that I'm a supporter of the funding for the Cal Grant Equity Framework, and I feel like it's important because we're in a deficit, to invest in our youth right now and get the return of investment back. Basically, this would see students making 30,000 more dollars as opposed to if they didn't have this funding. And for every dollar invested within higher education, the state will receive $4.50 in return.

The more opportunity offered to its populace, the more both California and these residing within it will benefit from an increase in revenue. To ignore the needs for higher education in the state of California is to ignore the symptoms stemming from a lack of access to education, such as poverty, crime, and homelessness. All these difficulties are on the rise due to California's widening wealth gap, exemplified in increasing costs for both university attendance and living in general.

Not only will these problems persist, but they will expand, becoming more extortionate to solve if not acted upon now. Therefore, supporting the Cal Grant Equity Framework is not a cost, but an investment in our youth to ensure a greater future for the whole of California. Sorry if that was too long. Thank you so much.

Thank you.

Good afternoon, Mr. Chair and Members. I think I'm the last, hopefully, so I'll keep it short so y'all can get to it. Many of the comments I was going to echo has been shared by my colleagues as well. My name is Parshan. I'm the Policy Director with uAspire, and like many of our colleagues, here to speak in support of the Cal Grant. Thank you, Mr. Chair. Thank you, Assembly Member Fong, for your support, your continued support of this effort.

And we know that we have a body that we can rely on and getting the Cal Grant to the finish line this year. So we look forward to working with you all and the Members in the Senate as well, to get it done. And nice to see you, Mark, as well.

Thank you very much. Thank you all for your comments and for being succinct. And we hope that it's not the last time that you come before the Committee, as the work will continue throughout the spring. So that brings us to the end of our meeting. We will be reconvening for this Committee next Wednesday at... Tuesday at 9:00 AM. We're adjourned.