Senate Budget and Fiscal Review Subcommittee No. 1 on Education

Senate Budget Subcommitee number one on education will come to order. Good morning. And to go through just some brief housekeeping, the senate continues to welcome the public in person and also via the teleconference service. We will be hearing from all our witnesses in person in the room. We will hear at the end of all the items, public comment here in the room, and then over the teleconference service for anybody that cannot participate in the room.

And so for individuals wishing to provide public comment, today's participant number is 877-226-8216 you can see it on the screen, 877-226-8216 and the access code is 6217161, 621-7161 and so, as I did already, I ask all members of the subcommitee to be present in room 2100 so we can establish a quorum. But we are going to begin because we have a tight schedule today.

We want to be able to hear community colleges every issue we have, and we want to allow for as much public testimony as we can at the conclusion of the hearing. As you can see from the agenda, we have the main overview of community colleges divided into four issue areas, General system updates, student housing, cost of living, adjustments for the apportionments and the categorical programs, recruitment and retention and enrollment.

And then we have separate issues on facilities and deferred maintenance, the forest and fire protection, workforce training, and a status update on a few items that will constitute our oversight as a committee of those items. So this is our hearing for community colleges, and without any further ado, let's ask the panelists for issue number one, Daisy Gonzales, the interim chancellor for the community colleges, Madison Sheffield from the Department of Finance, and Paul Steenhausen from the Legislative Analyst Office to make their way here.

And in a moment, we will begin with presentations in that order. And I know that Lizette Navarette is here also to help with questions. And you'll both be able to get a microphone right on the end in case you need it. Here we go.

Okay, then we're going to go with that panel in that order, and beginning with interim Chancellor Gonzales going to the Department of Finance and then the Legislative Analyst Office. So welcome to the Subcommitee. We're happy to have you here.

Good morning.

They're turning it on over there. If it's on there, we got a thumbs up over there. Hopefully this is working.

Good morning, Chair Laird. Good morning. members of the subcommitee and the staff of the subcommitee, thank you for your work this morning. I know you had a full morning already, but I will be brief. And then, of course, I know there are a number of colleges students here today, and so my main purpose is that you get to hear from them. You have a number of items that you are interested in, and so we provided you a PowerPoint presentation.

I am a visual learner myself, and so as I guide you through these, know that it's meant to be a conversation. But if you are a visual learner as well, you have that information in front of you. It is an honor to be here with you this morning representing California's community colleges. I am a proud California community college alum. I started off my educational career in LA as a former foster youth, and I am here because of California's community colleges.

I also used to be a former budget consultant for the State Assembly. And, Senator Laird, I saw your leadership during my time as an assembly fellow, certainly in natural resources. So it's great to see you on this side thinking about the pipeline, the workforce pipeline. I've also been in this role for the last eight months, but I proudly served this system for five years prior to taking on the interim chancellor role.

And I'm proud to say that in the last eight months, we have been able to make increases in our enrollment. It has not been easy. It has been incredibly difficult during a global pandemic. But I'm very proud of the students, the faculty and staff, and the progress that they have made together. So if you're following along, we're going to go to the second slide, which is page number two. We are a system that serves entire communities.

That means that our doors are open to everyone that comes to our campuses, all 116 of them. What that means for us is that we accept 100% of Californians that come to our campuses. We do not select. We are there to serve both on the workforce side by offering credentials, but as well as degrees, a lot of our students do seek to transfer and earn baccalaureate degrees. You see on slide number two that the majority of our students also end up at our four year partners.

In fact, 51% of CSU students start their educational career at a California community college. 51%. 29% of UC students start their education at a California community college. What is important for me to note here is that community colleges are the entry point for the majority of Californians. We serve two thirds of all undergraduates in the State of California. Slide number three. Next slide. That slide is showing you who we currently serve today.

This is a very important slide as we think about the faculty and staff that are in our campuses. Three things that I want to highlight for you here who we serve in California today are largely students of color, largely low income individuals in this state. And more importantly, they are working part time or more, which means that they are navigating their educational journey as a part of also then supporting their families and their local communities.

So 64% of our students are working learners, 64%, that is higher than in prior years. Should also then be no surprise that as we look to the future and the work that our system has been doing, we are then focused on helping our students increase the number of units that they're taking so that they can get to their end goal much faster.

Our system has been focused on increasing student outcomes as a part of our work for the last five years, and that has not changed during this pandemic. I'm now on page four. On page four, you see what it means to make an investment in our system. For every dollar that is invested in California's community colleges, our students earn $5 in return. That is the power of getting an education in the State of California.

That is what it means to create social mobility in the state and to help Californians reach the middle class. Slide five. You see the work that we are currently undergoing. Your agenda highlighted the roadmap for the future, a very important roadmap that was proposed and adopted in last year's budget. For us, there is strong alignment, and we are thankful to Governor Newsom for introducing the roadmap and presenting us with a new opportunity to dream bigger, to be bolder in our goals.

There are five key things to really highlight as we are aligning to this roadmap. The first is that we are being asked, as a system, to reduce the number of excess units that our students are earning. Meaning we want our students to take the right classes as quickly as possible. We want to close our equity gaps.

We want to improve educational outcomes overall as a system, and we want to improve our intersegmental data sharing and relationships, because as our students seek to enter other segments, they need us to bear that burden and then lastly, creating clear pathways to both career and as well as transfer. Those are our goals in front of us. And there is a lot of really good news.

If you go to slide number six, you see that since we started the work of the vision for success, we have been increasing the number of students who are earning their degrees and credentials every single year. We expect the same numbers next month when we report to our board. And that was not any small feat. It actually took a lot of hard work and a lot of support from the legislature.

When we think about the last five years of investments, changes in legislation, as well as a lot of hard work from our students and our faculty as well, enrollment is slowly recovering, and we expect the same thing to happen as we are reporting to our board and, of course, to all of you in the next two months. Happy to share on page seven that our enrollment is up by 2.4%. Overall, numerically, it is higher than the national average for community colleges.

And I'm proud to say that on a month that is community colleges month here in California, it's California community College Month. We are up 2.4%. And that is important. It shows us that there is a lot of more work ahead, but that we're heading in the right direction for us. And what I want to point out is the most important part is, are we serving the right population? Are we serving Californians? And this is the most exciting part.

We are seeing that the number of students, the populations that we were losing during this pandemic, is now reversing. So you see increases in Latino student populations that grew by 5.7%. You see that our Native American Alaskan native student enrollment grew by 5.0 percent, and our black student enrollment grew by 5.3%. It shows us that we're headed in the right direction, but we also need to stay focused on retention and completion. Right.

Our students have now returned, and it is now our job to make sure that they can complete their education. On slide eight, we are showing you the key areas, what it will take to align to the governor's roadmap. I mentioned earlier that there's already a lot of alignment, but your agenda highlighted some of the metrics, the new goals that need to be established.

It is an opportunity for us to be bolder, an opportunity for the system to transform, and it is happening at a very exciting time. Late February, our board announced the official hiring of Dr. Sonya Christian. She is a renowned scholar in our system. Known nationally, Dr. Sonya Christian will begin her first day on June 1. And if the name sounds familiar, it's because she's actually one of the stars in our system that has been leading dual enrollment for the state in Kern Community College district.

She is also a leader, as we think, about baccalaureate degree programs, particularly in workforce, so automotive repair, the future of really technology automation. So we are excited to welcome Chancellor Christian. I hope that you will get to meet her very soon. What I will share also about her is that she is someone who deeply understands what it means to serve this community.

She came to this country as an international student and then earned her advanced degrees here in California, became a Doctor of mathematics and joins our system as the state chancellor, the 11th state chancellor. She will be the first woman to serve in this role permanently. Permanently.

You mean there have been some interims?

There have been many interims, yes. And the most exciting part is she understands our students, our students' basic, needs for Dr. Christian. She understands that we cannot think about our students and their success if we are not talking and rebuilding and thinking about basic needs on slide nine. I share with you what she shared, and I'll just read it out loud. These are words from Dr. Christian. We continue to face many challenges, but I truly believe our greatest challenges enable us to do our greatest work.

We are called to design the most vibrant, resilient and effective learning environment ever. We are called to do this work at scale, not eventually, but now. And we will work with a shared vision that keeps students first. As a part of that, I look forward to answering any questions you may have and, of course, discussing the next few areas of interest that you have.

Thank you very much. We really appreciate you being here and your comments. And we'll do our questions after every panelist has presented. So we'll go to the Department of Finance.

Madison Sheffield, Department of Finance. We have no specific presentation for this item and happy to answer any questions.

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

Paul Steenhausen with the analyst office. We're here to answer any questions you might have. If you want to talk more about the audit, have questions about the audit roadmap. Happy to discuss that.

Okay. And just before we get to questions, we have a quorum present and I'm going to ask that the role be called and we establish a quorum.

[Roll Call] We have a quorum.

Thank you very much. Okay, now we'll move to questions. And I had a few. And first, let me just say to the interim chancellor, I really appreciated your comments and you triggered one thing. When I was a community, you said $5 for every $1. And when I was a trustee, and that's been over 20 years ago, there used to be this statistic that the difference in earning power over the life of a career of a community college graduate was at that point, $300,000.

Do you have any updated statistic? Do you know what that is now.

I don't recall the exact amount, but I'm sorry. Apologies. Good morning. Interim deputy chancellor of the California community colleges. Thank you for the opportunity to connect. We have a robust study that we did last year on the economic impact of our community colleges. Would love to share that. So you can see what we do know is, on the aggregate, our contribution as community colleges to the state is $128,000,000,000 annually. This is through both the gross economic impact that our colleges have as employers, but also the return on investment of higher wages from the students that attend our colleges. So we'll get more details. So you have that as well.

Okay. Thank you very much. And then I wanted to ask another question, which is, I think it's probably too soon to respond, but there was a letter that came to the President of the Board of Governors and the incoming chancellor and the interim chancellor about the approval of bachelor's degrees by the Board of Governors and the community colleges. Could you tell us the status of that now or the implementation of that legislation?

Of course. Happy to answer that question. And that letter was received yesterday, actually in the afternoon by our office. So we look forward to working with the authors of the letter and following up. Happy to discuss, since it is new, but I will focus on the implementation of the legislation. So the implementation of a program that is required by law was passed by the legislature last year. It was a part of AB 927 Medina, and it asked our colleges to do two things.

One, to permanently offer baccalaureate degree programs, period. It used to be a pilot for the State of California. It now then allowed baccalaureate degree programs. It also allowed for the expansion, but it set a cap. Only 30 programs could be approved annually, and it gave that authority to the Board of Governors. There are also a number of key deadlines, very aggressive deadlines, and I will say cycle one operated on time. Cycle two is already more than 30 days late.

And that is largely because of our relationship in creating better partnerships, being able to sit down, get clarity across segments on definitions, what is duplication, what is evidence. As you can imagine, those are long and extensive conversations that require continuous improvement. Right. Because what may be an issue in one cycle may not be an issue in another. For us, it's very important that we are bringing all of our partners along, but first and foremost, that we don't compromise our values, and our values are our students.

And so if the program benefits our students and the law allows it, then that is a number one indicator of how we are evaluating. We are in the middle of cycle two. All of the applications that were received, I can tell you there was 29 applications a lot more interest than there were a number of slots for our board to consider.

I don't have an update because out of those 29, less than half were then sent over to our four year partners, and they are currently under review. So we are nowhere near advancing to cycle two in terms of having that information for our board, since they are currently under discussion with our UC, CSU and AICCU partners.

And I totally appreciate that you just got the letter, excuse me. And that it's too soon to respond, but it's just a statement of interest on behalf of the legislators and that they're very concerned and that there might need to be, even by us, talk to different segments to make sure everybody's working together to do this. So we'll look forward to the response when you can do it. And then I think the legislators will then decide what the appropriate next steps are. Thank you.

Some of our questions of you are on the future issues like enrollment and housing, even though you just started to address some of them. Let me ask if my colleagues have any questions. Senator Smallwood Quavas.

Just a clarifying question on the PowerPoint, and I know you're going to have more detail around the enrollment. You talked about the increase for groups, populations impacted by the pandemic. I was curious. It grew by 5.7, but from where to where is sort of what I was trying to understand. And then you mentioned, we're back. So are we at the pre pandemic levels in terms of enrollment, does the 5% take us to. We lost 5%, and now we're back at our General sort of census level before the pandemic. I just wanted clarification on that.

Got it. No, thank you for the question. So this is from fall term to fall term. So in this case, the information that I'm sharing with you, the 2.4%, is in comparison to fall of 2021. Right. So the full term, that's very important because our students are coming to our campuses and it takes a full term to then get that information, that data. Exactly. Yeah. So the overall increase was 2.4.

What's important to note here as well is that in general, since the beginning of the pandemic, so that's more than three years of decline, we were looking at 18% loss. Right. And that was also a part of the national average. So what I'm sharing with you is we finally turned the corner. Instead of going down, we are now seeing increases, and we expect that to also follow in fall of 2022.

Excuse me. And we have, our fourth issue is on enrollment as well as recruitment and retention, and I'm going to want to follow up on that when we get to it. And did that complete your question? Then I had one other one, which is the State Auditor made recommendations to the chancellor's office with regard to the subject of full time faculty. And I wondered, do you believe you can implement some of the recommendations are the ones you're going to have hard times with? Where do you stand in terms of what the Auditor was recommending to you on that?

Yeah. So this is, for us, correlated to our apportionments. Happy to answer it now or we can wait until we cover those slides. The short answer is yes and some concerns, but we are always solution oriented, so we look forward to working with all of our partners.

Okay, then we'll hit it when we can hit it. And if there's no further questions, then we probably in the other issues are going to start to get to some of the issues. And issue one b is student and housing and at community colleges, and it's the same panelists, although we have listed in a different order. So we thought we'd start with the Department of Finance, go to the Legislative Analyst Office and then go to the interim chancellor.

Some technical difficulties.

We understand, last week we had to move people up to the dais to be able to make sure they had a live mic right.

Remember that morning? Chair and Members Michelle Nguyen with the Department of Finance for the Higher Education Student Housing Grant program, which was established in 2021 in which allocated 1.45 billion one time General Fund for last year's budget in 2022. The Governor's Budget puts forward 500 million one time General Fund for 2023-24 and it does delay a planned investment of 250 million one time General Fund to 2024-25 for this intersegmental investment program statute indicates that the community colleges shall receive 50% of the overall program funds.

In addition, the Governor's Budget delays the start of the student housing revolving loan program from the budget year, fiscal year 23-24 to the year after 2024-25. And it also changes the allocation from a split of 900 million one time General Fund in 2023-24 and 900 million one time General Fund in 24-25 to instead be 650 million in 24-25 and 1.15 billion in 25-26 still the same amount but delayed a year. And the split across those two years is a bit different.

For this intersectional investment, there is a to be determined split between the UC, the CSU and the community colleges. Effectively, the Governor's Budget maintains the overall funding commitments for these two student housing programs. But given the budget outlook, the Governor's Budget proposes funding delays for both programs. The Administration recognizes the importance of affordable student housing and the impacts to communities where those campuses are located and remains committed to student housing.

But the delays are as a result of the revenue outlook that we're seeing at the Governor's Budget and the overall budget architecture. So with that, happy to answer any questions that you might have.

Great. And then we'll go to the Legislative Analyst.

Thank you, Paul Steenhausen, again with the analyst office. Just wanted to start by clarifying that this is what we're talking about is non Proposition 98 General Fund Dollars that would be delayed under the Governor's Budget. Given the budget deficit that the January budget identifies, later issues will be, for the most part, talking about Proposition 98 dollars. So for these two proposals on the construction grant delay and the revolving loan Fund delay, we offer various issues and options for legislative consideration.

First, the governor's January budget identified a budget problem of about $20 billion with annual operating deficits beyond the budget year. And based on recent revenue collections and economic data, our preliminary analysis suggests that the budget problem will likely be even larger in May, and that would necessitate more budget solutions.

So in light of this likely more serious budget picture that the state is facing, one alternative to delaying the funding by one year would be for the Legislature to remove funding for these programs, the second round of the housing grants and the revolving loan Fund, and then revisit the funding once the budget situation improves for the state. And that could be done through some sort of trigger restoration, something more automatic or just something at the discretion of the Legislature to return to it.

So compared to the universe of other budget solutions the Legislature might be having to discuss and wrestle with, we think the removing and revisiting option would be potentially less disruptive. That's because the student housing project proposals submitted to the Legislature and Governor just recently are in the early planning stages and the state hasn't yet created the revolving loan Fund. And so if funding were removed for now, there would be no immediate impact or disruption for students.

Since the first round of the housing grants were only recently awarded, the data on the impact is not yet known. And so by removing additional housing funds and then revisiting, the Legislature would have some time to take a look at the impact of that first round of grants and see did they meet the legislative intent, the overall objectives about affordability and about addressing housing insecurity.

And to the extent the Legislature sees the first round as having the desired effect, Legislature could then provide money for the second round again, once the budget situation improves and you have some more money to work with. So if the Legislature, though, still wanted to do something more immediately, didn't want to wait and wanted to do something around student housing, the Legislature could look at prioritizing the loan program over the grant program.

So the revolving loan program, and to do that in the budget year, the state likely would get more affordable beds under the loan program than the grant program. That's because the grant program is kind of a one shot deal, whereas a revolving loan approach, that model, by its very nature, is replenishing and ongoing. Because the state would loan out the money, campuses would build the facilities, start collecting money, and then use that money to replenish the loan Fund, which then could go out to others.

So the loan program also has zero cost financing. So it'd be zero interest to the colleges, which might be all that some housing projects need to become financially viable and given interest rates and where they are, that might be what campuses need, and they might see that as an attractive option. So if the Legislature wanted to do some amount of construction grants in the budget year, Legislature could prioritize University projects, which could include intersegmental projects with the community colleges and the universities.

The universities have had a long history of building and operating residential housing, residential buildings for students. And as we've noted in an earlier hearing, the universities likely would have a higher probability of implementing them successfully. Now, if the Legislature did want to do construction grants, wanted to give the construction grants to the community colleges in the budget year, we think the chancellor's office's ranking system for the 21 projects is reasonable. And you can see that on your agenda, pages 12 through 14.

You can see the projects and how the chancellor's office ranked them using statutory criteria. We would suggest the Legislature start with the highest ranked projects and then Fund, depending on what the budget can accommodate in the budget year and out year. Thank you.

Thank you. And then we'll go to the chancellor's office.

Thank you for the opportunity to address not just housing, but for this population of students, for these types of Californians, affordable housing. And I want to thank our colleagues here for the analysis. I have here with me Deputy Chancellor Lizette Navarette, Dr. Navarrette, and she's going to cover slides 10 and onward.

But let me just share with you, for us and the Board of Governors, specifically, the work after this Legislature took historic action to actually create affordable student housing and community colleges led us to really create a model that required our colleges to have holistic supports when they are building housing. That is what makes this type of housing unique. It is meant to not only provide, yes, a shelter, but also our colleges are thinking about childcare. They're thinking about food pantries.

They're thinking about the holistic approach to help students succeed and in an affordable way. We did a study, a system wide study in 2019. Before this pandemic, 60% of our students were food and housing insecure. 19% of them told us that they were homeless. And despite that, they persisted. Those numbers have certainly probably shifted. What is important here for us to remember is that we are a critical solution to the housing crisis in this state.

And so, as you consider all of the options in front of you, I leave you with that and ask Dr. Navarette to address slides 10 and onward.

Good morning, Members of the Committee Chair Laird, thank you again for prioritizing a discussion about affordable student housing today. What the Legislature did when they approved affordable student housing in 2021 was historic. And it was historic because you were leveraging both the alignment of higher education, incentivizing our partnerships across various segments, but also using resources for the state to really tackle one of the biggest issues that we're facing right now, which is a housing shortage.

And then, as a result, a basic needs issue that our students, as Chancellor Gonzalez mentioned, have seen over and over, with one in four experiencing some form of housing insecurity. So when the Board of Governors became the administers of the Affordable student housing program, one of the key things that we did was establish a set of recommendations and a look at regulations that we will advance in order to implement.

And so I've included what our mission statement is for the affordable student housing, the expectations that we've set for our 116 colleges across the state. And it begins with a focus on equity, on affordability, and we think about financial sustainability, and more importantly, student centered design. I want to highlight this because it really shows you how different our projects are from those at UC and CSU. We didn't enter the housing space just to have housing.

We entered for a very specific purpose, and that purpose is to address affordability and basic needs of our students. We don't want to see them on the streets. We don't want to see them in parking lots. We want to see them housed with dignity and in a way that can help them achieve their academic goals and economic mobility for them and their families. So we created now we have an affordable student housing unit within the chancellor's office.

We're working with our student housing partners and expect to see a doubling of affordable student housing beds on our campuses. What you will see at the campuses that have broken ground is that they expect to have rents anywhere ranging from $400 to $600, a very affordable and especially for some of the regions in the state that have high cost.

We also are seeing innovative models where colleges are really collaborating with their communities to endow beds, to integrate other support services, such as tutoring, as part of these projects so that we can ensure that these students are successful. So in order to analyze the potential for this next round, we instituted a robust ranking system that included scoring. That scoring information is available on slide 16. So we included both the considerations and data points that were requested as part of the statute.

But we also added very specific community college elements that would tell us what is the readiness of the college to Institute and be successful in implementing affordable student housing. We looked at what are some of the partnerships that have been established, and we also looked at the ancillary services, again, so that they're not just brick and mortar. They are a robust student life and academic strategy for success. We also take very seriously financial sustainability. We recognize that we are stewards of public dollars.

And so, as part of our implementation, we provided a total cost of ownership calculator where colleges can determine the revenue that they would receive the investment from the state, and then consider their overall cost for 30 years so that they can plan ahead and have sustainable projects. What we see with that is that in a loan program, colleges can't keep affordable rents. And so that is a distinction. We don't have endowments.

We don't have existing revenue from prior housing projects to tap into to pay back that loan. And so the affordability that was provided in these grants is so critical for that purpose. I just want to end with there are many projects that have broken ground. We hope that you'll join us at some of those next ones we have. Sierra College recently had a project Lake Tahoe is expecting. Now that this snow is subsiding, they will continue their construction.

But we hope that you will see for yourself the life changing opportunities that housing can provide for our 1.8 million students. Thank you.

Thank you. And thanks to all three of you. And I think to kick this item off from our side for myself, and then we can see what the other Members say. I'd like to sort of make a statement about what I think our direction should be. Given everything we were just presented and the reason we were doing this was basically when I was a community college trustee, and I haven't been for over 20 years, we never heard about housing insecurity. It's the community.

It's people based in the community. You felt it was a support system. And now I ask every time I go on a campus, what is your homeless population? Or where is their housing insecurity? And it's between one and 5% just on basic unhoused. And then the housing insecurity, substantial past that. And so we really want this. And last year, even though there were negotiations after it left the Subcommitee, it was my desire that this program was completely oversubscribed. We did 2 billion in the first year.

I guess that was in 2021. That was supposed to be all three segments and be over three years, and it was oversubscribed after one year. And then we added a billion and a half last year. So we got to three and a half billion, and it's oversubscribed. And now we have a recommendation to slow it down. And it was my desire last year to go through the backlog of anybody that had applied for a grant and deal with that backlog before you had the loan program.

And I recognized that loan versus grant is different to community colleges than it is for the University of California, the California State University system, because they have historic housing programs. They have built in abilities to build and have it pay back. And this is new for community colleges. If you looked at what was in our agenda packet and a list of who provides, there's one I can't remember, there's one where 800 units have been built. And until that happened, Orange Cuffs College.

Until that happened, it was almost entirely places where students came from so far that they had to have dorm space at the colleges, so they weren't doing a two hour or three hour round trip to go to school regularly. That was the reason there was housing at community colleges. And I personally do not support delaying this. And I think part of the problem is, I mean, whether in a small amount or a big amount.

And I felt obligated to say this because the Legislative Analyst is always looking at ways that we can plug budget holes and thinks that the planning isn't very far along. But the reason the planning isn't very far along is we can never give security to the people building to know that the money is there and that they can actually move ahead and do it. And if we keep kicking it down the road, that's not going to work.

And if it is grants versus loans, community colleges is disadvantaged unless it's a grant. So in the ideal world, we would not delay. We would do grants, and we would give the individual campuses the security to know that they're doing that, that they can move ahead, especially since it's oversubscribed.

And that in the ideal world, we're going to have to figure out ways to move past what we have already funded, even though there's recommendations in the budget that we short some of it to try to push things to the future years. And so there's that, as, I think, a General direction that I feel for this. I know there are students here that are wondering, what is this budget process?

And so the Governor does a proposal in January, and we are having hearings over two months to vet the entire proposal and give some direction and hope that when the revised may budget comes out in the middle of May, that they have heard some of our concerns and that they adjust the budget.

And if they haven't heard the concerns and we still feel strongly and we can figure out how to Fund it, that's our job in closing down the budget, is to try to move it to a different direction. And I think this is one of the issues that will be central to that.

And so then let me ask a couple of questions, and I don't know whether it's the system or finance that's best to answer, but the first one is, I think there were four proposals listed that are, in essence, joint proposals. And I know my home one. The President of Cabrillo is here. Cabrillo partners with UC Santa Cruz for over 600 beds.

Given the fact that we had a certain funding pot for UC and a certain funding pot for community colleges, how do the four that would have the potential of tapping into both pots be funded against those pots?

Michelle Nguyen, Department of Finance so there was one intersegmental project that was funded in the 2022 Budget act, and the way that it was split up in terms of the appropriation was essentially half of it was from the community college share and then half of it was from the Cal State University share. And depending on the split of beds, you could potentially propose a different split for any of the intersegmental projects. But last year we just did a 50/50 split.

So that half was taken from one of Segment's share and half was taken from the other segment's share.

And which two were those partnering that.

You just named Imperial Valley College and San Diego State?

Because the interesting thing is, in the PowerPoint, there's four others.

Zero, right. I believe that was part of the recent round of applications that were solicited.

So in that recent round of applications, let's just say there's enough money to do all four. How will the split be determined for those four, since they're intersegmental?

Well, I think that's likely subject to conversations between the Legislature. I think you could use the same 50/50 split that was used in last year's budget, I would say that seems reasonable. If each of those projects are roughly a 50/50 split in terms of beds. If for an intersegmental project, say one campus had 25%, another campus had 75%, I think it'd be totally reasonable.

I think my question drills down a little further to where you almost went, which is you said the Legislature. So since we spelled out pots for each of the three segments, is it our obligation to say, here's an intersegmental program, let's dip into both pots. Is it us that does that, or can it be done without legislative action? If any of these rise to the level of being funded?

Well, the funds would need to be actually, right now, the remaining funds for this program, the 500 million that are being proposed for the budget year and then 250,000,000 for the year after that. Those are currently set aside right now, they're not actually in any of the systems budgets. So once there is legislation that appropriates funding for the projects, then.

Well, I'm going to get to that in the next question. But what you are saying is the Legislature has to be the one that does that.

And that's how it happened last year as well. Last year during post.

So if we are getting to a point that we could reach any of these four projects in this budget year, is it our obligation to spell that out in the budget in a way that it's clear and it allows it to move ahead from both pots?

Yes. So in the trailer Bill, legislation that appropriated the funding for the intersegmental and the rest of the projects last year, there was a specific section that said these two campuses are in an intersegmental project. This much for this campus, this much for this campus.

Okay. We're not going to be in this never never land where it competes really well in one pot and doesn't compete well in another and screws the project. Is that a possibility?

I'm not sure I'm understanding the question.

Well, let's just say that you rank 20 for UC and you rank 20 for community colleges, and somehow it's second in community colleges and 40th in UC. That's totally hypothetical. But I'm just trying to say, is there potential for a project getting screwed in a situation like that?

I'm not sure. Yeah.

See, I just don't want on July 15 for somebody to come up to me and say we were screwed. I am trying to do this in advance. That's the issue here. So let's just stipulate that I put that on your radar screen and you're going to figure it out.

But it leads to my next question, which I'm totally confused because I live in a world, and it happens in transportation, where I have this highway project in the district in San Luis Obispo county, and I keep pushing Caltrans to tell me how far down the pot they have to Fund to reach this project. And I look for that level of clarity to know if we put $800 million in, whatever it's called, the complete Streets program, we reach this project or something.

What I was totally confused about, about these projects is they're just all listed. There's more money than is available regardless of how much we put in, and I can't tell how they're ranked to be able to reach down that. If we funded a certain level. Which of these projects are we funding? Is there any clarity to that.

I can address that.

Right.

We did do a ranking, the total score out of 100. So there were 17 projects submitted for round two, which is currently part of the discussion. And we provided that ranking and all the scores and the data that went into the legislative committees and the Department of Finance. And so in your packet, you should be seeing the list that is based on their scores and ranking.

And that includes, you mean on page 15?

That's correct. Sorry, of your Committee analysis on the agenda.

Page 13 in the agenda. And the one in the agenda is in the order of the ranking. The one that seems to be in the PowerPoint is alphabetized by the name of the district.

Yes. Correct.

Okay.

Apologies for that confusion. And so the reason we did that ranking is so that we can show you all of the projects in transparency and show you everything that we received, what was scored, how they fared in that ranking process. And you'll notice that projects that have an intersegmental component, they had access to additional points. And so that also provides you a total of the overall housing need.

We recognize that as you go through the ranking, you'd likely do something as recommended by the LAO, which is Fund based on available resources. So you would work your way from the top of the rank through the use of all available resources.

And I think the. Now I've moved away from the inner segmental one. So the first intersegmental one on here is Merced. And that shows how it's split. Riverside shows how it's split. Cabrillo does not, and state center doesn't appear to, either. And you see, the reason I'm asking is that I'm looking for the clarity of. And I don't have the number right in front of me. Let's just say we stick with 500 million for this year.

How do I know how far down this list this gets? If we don't delay the amount the Governor is proposing putting into the next year, how much further down the list do we get? That's something that's, I think, clear based on it. It's just not in our agenda packet or not in your PowerPoint.

And we can provide that as well.

The LAO is anxious to come.

That's something, actually, Senator Laird, that the chancellor's office has provided, and we can work with them to get you a copy. There's actually a very nicely laid out table here that shows the projects by ranking the amount of the project and state money, local money, whether it's in or segmental or not, and also the points, the number of points the chancellor's office gave each project.

I think that most of our agenda packet, but not the points the other columns are, but it doesn't index it against how much money was available either in the proposed budget or pre proposed, or with the deferred amount, so that we can actually see the impact of what it is.

We can do that quickly for you. Senator Laird, apologies. We can do that for you and actually even create a workbook that allows you to populate the amount that you have available, and then it would show to you which projects would then be funded.

I think we would like that. But finance has been trying to get into.

Yeah, I think that would be really helpful. If I may just add another probably unwanted kind of detail. So the statute indicates this is one.

Of the first times finance has identified that a detail might be unwanted. You're just freely throw the details in, usually.

So statute indicates the overall program split, 50% for community colleges, 30% for Cal State University, 20% for the University of California. But statue is silent on what the split would be for any given year. So there's flexibility in terms of whatever that split should. The split refers to the overall program amount, which right now is $2.2 billion. It doesn't say what that split is for any given year. Right now, there's approximately of the remaining 750 million, 545 million remaining of the community college share.

So just wanted to put that out there as like another. This is an intersegmental investment. So I appreciate what the chancellor's office is saying in terms of if you have this much for community colleges, then funds down to this project, but just the extra layer of that, it is an intersegmental investment. And so considering what projects would be funded for the UC and the CSU, then it just changes what that share is for the colleges.

Okay, in a moment, I'm going to give all my colleagues a chance to weigh in, too. But just for me closing, I think the one thing is that I go into my own district and there's a sense of urgency, that just people are living in cars, that things are happening. And sometimes when we have a hearing and we're really worried about graphs and charts, we lose the urgency that is existing out.

There. And so I just want to inject that into the discussion because that's what we feel when that is happening. And some of us live, or at least have certain parts of our district in very high cost areas. That really even makes it worse. And so I think that's the reason why there's not an interest in delaying this.

And that's an interest in, if at all possible, not delaying any part of it, because that urgency we're really feeling, and when we see where the cut offs are by the different possibilities, we're going to see some of these not be able to make the cut, and that's going to be really painful. So that's just something that I think all of us are feeling when we go home. Let me ask before we move to the next item, if there's comments or questions. That was a yes.

Senator Smallwood Cuevas, and then I'll get to the other two.

Thank you, Mr. Chair, and thank you for this conversation and appreciating better data to kind of show what's possible. And particularly the last point that you made about folks in high cost areas. I'm disappointed to see that LA trade Tech and LA City community College are not on this list, given the housing crisis that exists in LA County. I think it's something I'm not sure on the ranking.

So I'm really curious about how the ranking, I do see Southwest, which is a neighboring district, but not directly in my district. And I'm curious about that, given some of the efforts there to. Use these projects, not simply to modernize the campus or to build housing, but at LA trade Tech in particular, an effort to multiply our investment.

And that's where I wanted to go with this. When I look at these four projects and we're trying to figure out how we get to the resources so that we can actually get these projects fully funded and give confidence into the contractors and developers to move forward. The question is how we're going to build too Trade Tech.

When they did their modernization effort, they utilized project labor agreements and they utilized construction careers policy, which is a pretty elaborate, targeted local hire policy that sort of looks at single parents, formerly incarcerated folks who are chronically unemployed, students with GED, students who are trying who are living in areas that are 34 times the poverty level and trying to connect them to good jobs.

I'm curious about, and I know it might be premature, but this is about visioning and this is about setting North Stars and it's about saying where we're trying to go and why we're doing this. I really appreciated the demographic data, and I know full well how important community colleges are, particularly to those most vulnerable communities. It is the only rung left in so many ways, in so many communities, in the latter to get to the next level of self sufficiency and family sustainability.

So these precious dollars can build housing, but they can also advance folks in their career path and put them in good paid apprenticeship jobs that they then come out of with portable skills that they can use anywhere in the world. So I'm curious, is there a policy for the community colleges in terms of the multiplier for this housing?

And it's not just about the housing, but can we create some careers and can we reach into sort of our hardest hit communities and also have some ripple effect benefit? Just curious what those plans might look like. How are you involving these vulnerable students in that? And what can we do to be helpful, to help connect the dots in terms of the investment, but also the ripple effect and the multiplier of it?

Thank you. Senator Smallwood-Cuevas. I'm glad that you highlight our superpower as community colleges, which is really tapping into our community as partners, but also recognizing who it is that we serve and that we have a distinct opportunity to serve them in ways that other segments of government or the economy and community haven't.

So some of the things that you will see as part of how we're implementing affordable student housing across the system is that in the Board of Governors task force. They really set expectations that we want to see these projects really connected to programs of study so that we can help students not just come and have a place to live, but leave them with a degree or credential. There's also been a lot of work to connect students to everything that they would be available.

So some of the projects in the supplemental applications that we requested have shared, this is what we will do to connect them to Calfresh. This is what we'll do to connect them to tutors, to other programs, to other supports and campus caring environments. The other is really tapping into community partnerships so that they can establish food banks.

You'll hear from others that are exploring childcare as part of some of these connection points because these projects are really recognizing that you have to address the whole student and potentially the communities and families. And so oftentimes it means not just shelter, but other services and supports that then help them propel. So that's what you will really see connected with these projects, that it's part of a broader agenda to address basic needs and affordability, but most importantly, equitable success.

And I appreciate that. And that's what I get for making a statement and a question at the same time. I want to drill down on my question. You're talking about existing operating services once the housing is built. I'm talking about the construction. So what I'm saying is, and I totally agree with the superpower, I think that is exactly why we have community colleges. Right. And want to make them one stop for total needs.

What I'm saying is, with these construction dollars, very, we can take students out of their sleeping in their cars, we can take them out of the food bank, and we can give them certification, if they can get jobs, to actually build the housing. And bring students who may be in construction programs or communities, their parents, their sisters, and brothers, who are formerly incarcerated, who are single parents, to actually build the housing. Meaning that you come out of it with the housing build, but you also put a dent in poverty.

You also can put folks into a construction career, and you can help your students actually graduate out of a construction program and into an apprenticeship. That's in LA County. And I want to go back to why we don't have, why aren't our community colleges on this list? Because I think housing is such a crisis in our community, and I'm sure there's a reason why it appears that these are more rural and in more suburban campuses.

And I don't know if it has to do with your formula, again, asking more questions at once. So that's a separate question. But going back to this idea of how does the community college system think about these four projects as multipliers in terms of the actual construction dollars, the actual construction careers, and who can get called in to the opportunity.

What I have seen, when you're not intentional about that. Sometimes you can get companies from Nevada who bring their workers because it's a lower bid and they're going to do the work, but they are not local, they're not solving the community problem. And those dollars don't multiply in our state and in our communities. And there are some hundred old building trades institution where registered apprenticeship has beginning and end date certain hours.

And after so many hours, you can leave a project not just as an apprentice, but you can leave as a journey person and actually be in your career. So just thinking about how these projects can multiply, I look at the Riverside community. I've helped to build worker centers in different parts of the country and help to support a worker center in the Inland Empire. Lots of poverty, lots of communities of color.

And I'm not deferring from my colleague here, and we talk about the mutual concerns, about making sure that our hardest hit, and particularly the workers, can get access right to good jobs. This could be a multiplier for this community. So just how are you thinking about that? Are you thinking about ways to sort of codify that and how you will implement these projects, when and how we get the funding for them? And what can we do to help with that?

Because in this instance, we need every dollar to multiply, given our deficit and the need.

No, thank you for the clarification. And what a great idea. We have some models out there. Before there was a state investment, the County of imperial, so Imperoil Valley College actually built small homes and they did it in partnership with their county, their city and their students were employed. So we know that it's possible. We know that there is a model. Now to your second question. The projects on your agenda, what we have shared are those that applied in round two.

So if you don't see your campus, it doesn't mean they weren't ready. It means they might not have ranked at that level, meaning the top projects or they haven't applied yet. So happy to follow up there. Now then, how do we then incentivize and lean in into this idea of a multiplier of effect, helping our students earn degrees while building homes for the next generation? That is a great idea.

That's something we can certainly add as we think about the Board of Governors framework for this as well as now the conversations we just had this morning about splits. That is something you could do in trailer Bill Language. So thank you for asking the question. We'd be happy to follow up.

Happy to work with you on that. And as I mentioned, LA trade tech went through county dollars, went through a tremendous building campaign with state investment and used that exact model. So happy to share some of those lessons learned with you.

Thank you, Senator Ochoa Bogh.

So my question had to do more with the delay of some of the funding for the housing. I just want to really echo and emphasize that I am in complete agreement and in support of Senator Laird's earlier statements. And I think, as he said, I think we're all on the same thought pathway. My question had to do with if, with the proposed delays that we have on the budget for housing.

How would that impact the continuous implementation and planning and preparation for these housing projects? Would the colleges think that they would have to hold back on that until there's a guaranteed funding or would you folks continue the process of planning, preparing, and getting them basically, quote unquote, shovel ready. So when the funding does get back, they're ready to go? Would this delay halt the process of preparation? Planning?

Let me address two parts of your question. First is around colleges that are currently in planning and preparing for housing. We would encourage our colleges to continue their planning and preparation. That's critical. That's essential. And colleges received planning grant dollars as part of the first round. So 18 million was provided to colleges so that they can do just that plan work with their communities, identify the cost and viability.

So we want to encourage that to continue so that as we see California's budgetary cycles, I think I've been through at least three different kinds of cycles already, in just a span of a couple of decades. And we know that there may be opportunities. We want our colleges to be ready for those because we know that the housing shortages and issues are not likely to go away immediately.

And we want to be part of the solution to the second part of your question, which is what happens to these projects? One risk in delaying is that you get cost escalation. And so the longer you wait, you do see costs of increase construction going up, labor going up, supplies. And so those things do add up. So that is one risk that is at hand. But we do believe our colleges are going to continue their work.

And for those with extensive urgency, we'll continue to look for other options and partners.

Excellent question. And then there's one final question, and it had to do also with the delay in building and the construction of these housing. And I think going back to the sentiment of Senator Laird with regard to the urgency of the visualization where we know kids or students who are living out of their cars or jumping from sofa to sofa, and that is truly real for many kids. And I think about a lot of our foster kids who are in those situations.

And that's why I feel the urgency. I feel there's so many of them with the cost. But has there been any analysis with regards to if we don't provide housing as soon as possible, with the urgency that we have currently with our unhoused students and how we're going to supplement that financially and the cost of supplementing that need in other ways and what that would look like. So we don't invest right now in the current projects. We delay that.

But how are we going to, because we're going to have to supplement in another way, whether it's grants, scholarships, to accommodate for that, for the lack of housing. Has there been any analysis as to what would be a better investment?

If it would be making sure that we direct and implement and use this funding as soon as possible, or do we provide it in other means, whether it's through the students or through the communities that we're going to be helping out in other means because of the cost of impact of the housing? Has anyone kind of weighed that in this analysis?

Thank you for the question. There has been an analysis around overall basic needs. It's a 2019 study that, again provided a lot of base data. There is an effort underway by an affordable student housing Committee that's led by college presidents and chancellors where they're looking to update that information so that we understand some of the effects of the pandemic and recent housing shortages on students. So that's not ready yet, but it may likely provide some of the information you're seeking.

To the second part of your question, which what other resources are available? The reality is that many of our students don't have many other resources available. Only recently have we seen community college students get more access to Cal grants. Mostly those dollars went to UC and CSU students because it's based on tuition and not based on need. And there is a commitment to provide our students with Cal grant access, but that is also not set to be implemented until 24-25. Go ahead.

LAO.

Just to add. So again, Paul Steenhausen with the analyst office, I think you bring up very good points and very good concerns. Did want to point out that with the first round of construction grants that went out 560 or so million dollars. It's to Fund a total of 22, it's going to provide 2200 affordable beds out. Those 12 colleges that got a grant, and LA is not one of them. Compton did in the area, but not LA. So it's 2200 affordable beds for $564,000,000.

With the proposals in your agenda, pages 12 through 14, it's something about another 7000 or so beds. Meanwhile, California community colleges have many hundreds of thousands of low income students and many housing insecure students far exceeding 2200 or 7000 beds. So I think what you bring up is very important, Senator, that there need to be, whether or not the state does these grants, it needs to have and does have other programs that it funds. So there's financial aid, student success completion grants.

Senate has been a big proponent of these student success completion grants for community college students. They get cash aid for non tuition expenses. Those sorts of cash money, Cal grants as well to help them pay for basic needs for their food and housing are critical. And I'll also mention a program the Senate also has provided more money for in the past year or two. And that's rapid rehousing programs.

That's money to provide money in the pockets of students who are experiencing housing insecurity or could experience insecurity. So it's emergency grants, hotel vouchers, helping with their security deposit, initial rent, navigation assistance in the community. Those are the types of programs we see as potentially providing more of immediate impact on students. These grants, these construction grants, this take years and years. Even the Legislature approves it right now. It takes years to actually build.

But these rapid rehousing programs, some of these other aid programs that the Legislature has championed can have a much more of an immediate impact on a potentially larger number of students.

So on the housing front, I can see the merit of what you just stated as being a more effective pathway over the implementation of the proposal of the housing. Now let me ask you something. When it talks to the value of the dollar spent, because we do have the ability to do what you just said, immediately housing our students, those students also have an impact on the communities.

And so I wonder what the impact of removing that housing from communities to house our students, what the cost of living increases will it have because we're not providing that housing and what the impact that it will have on our state in supplementing and providing for the communities to meet their needs. Because we're going to have quite a demographic there that's going to be impacted. We'll be needing supplemental funds as well.

So I'm just trying to figure out where our tax dollars would have the biggest impact in the ripple effect, whether it's making sure that we do invest in, basically coming from a realtor's perspective, I'm looking at building infrastructure as well, because when we invest in housing for the colleges or the universities, it's something tangible where that dollar, there's something concrete for that.

Senator, I want to be really respectful, but I know Senator Min still wants to do this. And various people have flights at 01:00 and we have five items in front of us in public comment and I'm starting to get nervous.

No.

Okay.

Valid point. Just planting the seed that for me I'm thinking about where do we have the biggest impact when we're weighing this out because there is a ripple effect. And I'm just trying to figure out what would be the best way to implement that.

But I feel like you've made your point really clearly and we will all try to figure out how to be responsive. Senator Min, did you have a question?

I did, and I just briefly wanted to associate my comments with those of the chair. I also have deep concerns about the impact that a delay in funding will have on projects, and I'm frankly surprised we don't have answers to that, given that this is a major delay. I did have one question, and this really could be for Department of Finance, LAO, or community college or all three, which is we are right now facing a homelessness crisis across the state.

That's one of the major thrusts of the Governor's Budget this year, and I believe he set aside $2 billion in one time funding. And given that what we're talking about here is funding for housing projects that can be online fairly soon that are already identified, I guess I'm wondering what the rationale is for moving money to one time funding as opposed to just carrying this out. And then secondarily, what's the cost per unit comparison? I really have no sense. Are these much more expensive?

Is that one of the reasons we're looking to push $2 billion into the governor's one time funding for homelessness? Because this is a similar population? When you go out to community colleges, even in places like Orange County, we see that the housing insecure students are people that are likely to be homeless if they don't have these types of affordable housing options to them.

So it seems to me that we're moving money out of a set of priorities that really could be shovel ready very close to immediately and putting in another bucket. And so I kind of want to understand the rationale for that, including if anyone has this, what's the relative cost comparison of these units?

Go ahead. If you have an answer that's a real answer, give it. Because I was going to otherwise say noted and have people get back to him.

If you don't have an answer, I will be happy to receive that later in writing. But LAO looks like he is.

Go ahead.

Maybe speak loudly.

Senator Min, on your question about cost per unit, just to clarify, you're asking how much money would each unit cost under these proposals, or are you asking how much would it cost the student for a unit?

I'm trying to understand the cost effectiveness of these particular beds that we're talking about for community college housing. Right. Which is addressing a housing insecure population visa vis other types of home, temporary or more than temporary.

Your question is about cost of housing and construction or provision not in rental.

Yeah, that's right.

Okay. In terms of cost per unit, based on my memory, it ranges. I believe I saw the San Diego City College, the cost per unit was about $100,000. And in rural areas, though, some of them you see at $500,000, that seems a lot smaller scale.

That seems a lot cheaper than when we're talking about some of the project Home key, et cetera. So this is at least within the same range. Right. So I guess my comment then would be, I would like to see a rationale for this, because it does strike me as a major policy change here to delay this. We don't know the impacts of that.

The rationale you're asking for is to delay.

The rationale to delay this and to also have one time funding for homeless prevention and to build units there.

Because I think that looking at the community college chancellor, the finance and the LAO, none of them are in homeless stuff. They're totally in higher education. So they have to consult with people that do that in their agencies. I think your mic might have gone off.

Thank you, Mr. Chair. I just was noting this particular item deals with housing, and unfortunately, homelessness is a problem that we see with college students, community college students in all districts. And to the extent that we are prioritizing homelessness in other areas of the budget, I guess I'm still trying to understand why we're diverting these funds. But I look forward to hearing your responses.

Yes, well, I think that's a noted and work with them. So any last thing on this before we move to the next item, then let's move to issue 1C, the cost of living adjustment for portion and categorical programs. We have the same panelists, and we'll start with the Department of Finance.

Thank you. Good morning again, Chair and Members Madison Sheffield Department of Finance despite the revenue decline, the Governor's Budget does not propose cuts to the California Community college's apportionments. As mentioned in the agenda, the Governor's Budget includes statutory student centered funding formula, cost of living, or COLA adjustment of 8.13%, which translates to 652.6 million ongoing Proposition 98 General Fund. An updated COLA will be provided at May revision per standard process due to reliance on data that is available at the end of this month.

The Governor's Budget also proposes 92.5 million ongoing Proposition 98 General Fund for specified categorical programs. The Governor's Budget maintains a COLA for those categorical programs that have statutory requirement or have historically received COLA. There's no change to policy in this area at Governor's Budget to support a continued focus toward the goals of the roadmap.

The Administration intends to introduce a mechanism at May revision to provide community college districts that are making progress towards roadmap goals with additional categorical program spending flexibilities and the ability to streamline reporting requirements. I'm happy to answer any questions you may have about these investments.

Thank you very much. And then we'll go to the LAO.

Paul Steenhousen with the analyst office, you heard something very similar this discussion when you heard Proposition 98 and K 12 last month. So I'll be very brief. Based on new data since the January proposal, the cost of living adjustment rate for apportionments is likely to be even higher than 8.13%, which is in the January proposal. It's probably more in the neighborhood of 8.4%. Districts certainly are facing cost pressures for the budget year to increase employee salaries. Given inflation, they have other cost increases.

But as you have heard from our office, we're concerned with the state's ability to support a higher COLA rate given the state revenue outlook and budget condition. So we recommend the Legislature treat the 8.13% in the January proposal as kind of an upper bound in what to Fund in the budget year and just keep an eye on may revise and what revenues look like and what that might mean for the minimum guarantee.

Because if revenues are significantly lower, the outlook for revenues significantly lower than in January. Legislature might even want to consider providing lower than 8.13% just given concerns about the sustainability of funding of Proposition 98 in those programs. Thank you.

Thank you. And then the chancellor's office.

Happy to cover this item. Just wanted to mention that the California community colleges funds resources portions to colleges through the student centered funding formula, which looks at enrollment supplements, which is based on Low income students served as well as successes. But enrollment continues to be a major component of its resources. The formula also has some built in protections. We've outlined those on slide 23 of the packet that we've provided, so you can see those that are there.

Currently, our colleges, we have 62 districts that are on the student centered funding formula and have transitioned to that formula. Where the cost of living adjustment is so critical for colleges is that it provides for increases in rates to the student centered funding formula.

So it allows paying colleges additional funds for these various metrics, and those additional resources ensure that we can provide effective academic programs, career education we also know that our colleges are predominantly workforce engines, so these dollars are really funding employment for faculty, staff and students. And so the COLA allows these dollars and colleges to keep pace with operations and cost of inflation. So we would urge that in any scenario that the full statutory COLA be provided to colleges.

And for many of our colleges, deferrals are a much better option than not providing a COLA at all. That provides a guarantee, whereas any additional option does not provide a guarantee that colleges will be made whole in future years. Happy to answer any questions.

Just want to end with a reminder that our colleges for investments as we enter economic uncertainty, our colleges are an investment that leads to robust resources for the State of California, both through our employees, our students, and the economic mobility that we provide. Thank you again.

Thank you very much. Just a few notes. As the Legislative Analyst said, we had a long discussion about Proposition 98 in our k through 12 hearing and talked about what might happen and what might not happen. And I think this is in that and we will just see how it goes. And the one thing for the uninitiated is it's totally confusing because Proposition 98 money for k through 14 education is essentially flat.

And yet, even though the funding year to year is flat, there's a proposal for over 8% increase for k through 12 and 8% for community colleges. It's because there was such a large amount of one time money that able to still do that, but the one time money largely goes away, although that's even confusing because a lot of the one time money was spread over multiple years, so people are still getting it out of what was available in the previous year.

And I think that level of confusion is what led the LAO to make the comment that if the revenues go down, you've taken all the other flex out of the budget, you're sort of left to deal with. The cost of living increases the one thing that is up if that happens. So we will just note that discussion from the k through 12 hearing for here and it applies.

And I also note that the Administration last year did the compacts with UC and CSU that gives them a fixed 5% and then a pathway for community colleges that does certain metrics. And the COLA is what allows them to do the metrics. And it goes farther than the amount that UCs or CSUs are doing because after nearly 40 years of complaining about Prop 98, it's finally working to some benefit for community colleges in how it happens. So just make those statements overall.

And then the chancellor had talked about the audit being appropriate here of this item and on page seven of our agenda, we have some of the key findings from the audit that districts had not met the long standing goal since 1988 of having 75% instruction by full time faculty. That the chancellor's office current method of determining full time faculty is unsuitable to measure the progress not created a valid way to measure districts progress toward the goal.

Some districts did not properly use the funds for hiring part time faculty. The chancellor's office has not ensured that districts use the funding appropriately. Districts have made some progress in hiring more diverse faculties, but many students still lack representation and the chancellor's office does not verify whether the districts adequately implement requirements in order to receive EEO funds. Those were the recommendations I was asking about is to and I know the Auditor has a process where every agency responds and they check in after a year.

And I wondered if you would speak to how you respond to the specifics in that audit.

I will ask our deputy chancellor to add on anything that I missed, but I'll just say I hope you also then read our response, which was an extremely lengthy response over 18 pages covering work that our system has been engaged in for more than four years as we think about equal employment opportunity that required a refresh, but more importantly, integrating who works at our campuses back into the models of student success.

So we were grateful to see the audit address and have concerns and clear recommendations for us to work from today. Actually, as we speak, the consultation council which is required in the education code is beginning a conversation about this topic. What is the future of teaching and learning? How does it then relate back to technology? The workforce? Is it full time? Is it part time? And so I look forward to providing an update. In terms of implementation.

We do support and agree with most of the recommendations made by the Auditor. It is a brand new audit. We are already making progress. Our equal employment opportunity dollars have already been released. By the end of this year, all of our colleges will be in compliance with our new equal employment opportunity title five changes. So that required a huge overhaul. It was finally approved by the Department of Finance last year, and all of our colleges will be submitting their reports by September of this year.

That will then allow us to do an analysis. We were very intentional in saying we have a document now that will allow us to not just do compliance, but help a community envision how all of this becomes a long term plan. And so by September of this year, we'll be able to do a full analysis of the system. Prior to that, the colleges were submitting reports every three years.

So as you can imagine, we could only capture a small component of an analysis that didn't work as we were thinking, long term. So happy to provide an update as we head into the fall of this year. The other component of this is really having the partnership of the Legislature as we think about the future of teaching and learning. And I'll ask our deputy chancellor to add any comments related to I think.

We'Re just under the gun time wise. That was an adequate response for now. But I think overall, globally, the goal on the part time faculty, full time faculty, was set in 1988, and it seems that the ratio only improves when we're in good economic times and goes down when we're in bad economic times and still remains remarkably short of the goal. It's just a question of over time, how there is an expectation of dealing with it.

And I think there were EEO parts of that audit which I appreciate and are of equal concern, but I think that is one of the concerns in trying to figure it out. And I know that this is my third year doing it, and there's always some task force or always some audit. That's often the future. So it always seems like it's some future discussion, but it's been going on since 1988.

So we just have to try to make an assessment of where we are and then just a statement because the student centered funding formula was mentioned. It still makes me crazy, and I still hope we have a figure out whether then what isn't a soft landing for some of the campuses on that as we move forward. Let me ask my colleagues if they have any questions on this item.

Senator, for purposes of time, I will not ask this in the formal question, but I will note that our analysis does not have any, and I've asked for this in the past, on at least two occasions, I think, from your predecessors, chancellor. But I think it's important to start understanding the causes of decline that we're seeing in enrollment. Are these structural? Are they related to Covid? Are they just related to the economy and the economic cyclicality that we're facing?

But without knowing those answers, I think it's very hard for us to sit here and try to project out long term what the budget should be going forward, including around things like housing and some of the other things we were mentioning. So I just would encourage you, I was told, I think, last year that there was some studies underway. I'm going to assume that since they were not referenced here, that there are no study results at this point in time.

We're about to get to the enrollment item as the next item. But it's like if I can make one brief comment and let Senator Ochobo, no questions, then we will get to that and then I will make sure that there's a comment. And the one last thing is for finance. It's noted in our agenda. Every year we have a discussion about how some select categorical programs get cost of living increases and others don't.

And it's so tempting to ask what process you use in picking winners and losers. But it's like, why doesn't every program, whether it's puente or Mesa or the others, why don't they all get an equal COLA in the recommendation every year?

Of course, understand we have no change to policy in this Governor's Budget. So it's just providing the same COLAs to the same categorical programs that have received it historically or have it in statue are the ones that we provide.

Well, then I will make the statement. We have always hated that policy and we want everybody to receive equal colors because it's a De facto cut of every program every year and squeezing them. And an analogous thing, which we'll talk about it in the UC budget, is the reason we had to restore a 58% increase to UC cooperative ag extension is they'd got no COLAs for 20 years, and so they had a buying power that was about half of what it was 20 years before.

And that's what we're doing to Mesa and Puente and some of these other programs. And we just don't like that. And we keep restoring it on our side. So it'd be wonderful if we figured out a way that we would decide. The policy doesn't choose winners and losers. There's not just a historic policy that does that. So just for the record, anything else on this item? Then let's move to item 1d, enrollment and recruitment and retention.

And we'll go in the order of finance, Lao and the chancellor.

Madison Sheffield Department of Finance. Enrollment at the community colleges has dropped by approximately 16% in headcount enrollment since the beginning of Covid-19 pandemic, mirroring a national trend of declining enrollment for higher education institutions, which has been particularly acute for the nation's community colleges. Local community colleges must continue outreach for recruitment, reengagement and retention efforts to address recent enrollment declines. The budget includes an additional 200 million one time Proposition 98 General Fund to continue to support community college efforts and focus strategies to increase student retention and enrollment rates.

Further, governance budget includes funding for 0.5% enrollment growth coming to 28.8 million. This is more of a technical adjustment and provides funding which can be used by districts that are growing and any unused growth funding is potentially available to cover increases to a district's supplemental and success allocations. In addition to responding to enrollment declines in recent years, recent budget acts have provided significant financial support to the community colleges, including for student financial aid and basic needs, as well as for community college operations.

This includes providing a funding floor for the student centered funding formula's hold harmless provision beginning in fiscal year 25-26 and to maintain focus on rebounding enrollment. The Administration will be monitoring district level enrollment trends as we move past the Covid-19 pandemic. As such, the Administration will work with stakeholders to consider options to adjust district budgets should a district not display that they are regaining enrollment lost during the Covid-19 pandemic entering the 24-25 fiscal year. Sorry, academic year.

I'm happy to answer any questions you may have about these investments.

Thank you very much and Senator will be right back. We'll continue with the Department of the LAO.

That's right. Well, there are several issues before the Legislature in issue 1D. First, enrollment for 2021-22 a couple of years ago has been finalized by the chancellor's office, and data indicates that none of the $24 million the Legislature provided that year in 21-22 for enrollment growth was actually earned by districts. So that $24 million is available to the Legislature to the state to sweep and repurpose and use for other Proposition 98 priorities.

Now, data on the $27 million provided by the Legislature for enrollment growth in the current year in 22-23 will not be finalized until next February, February 2024. So there's likely to be unused enrollment growth from the current year, but we recommend the Legislature wait and see how much is left before sweeping that money next year.

Now, by the time of May revise, the chancellor's office will provide the Legislature with updated preliminary enrollment data for the current year, and that will be really important information for the Legislature to have because it'll help the Legislature make a decision on funding for enrollment growth for next year.

It appears, based on the data we've seen, that there are at least some districts in the current year that are growing back to their pre pandemic levels and as such may be in a position next year to actually grow and grow beyond where they were before. And so if that were the case, we think it makes sense and it's good policy to provide some level of enrollment growth. It provides encouragement for those districts to keep growing.

And also, it's kind of a low cost option for the Legislature because to the extent that districts don't end up using that money, it can just revert to the Proposition 98 reversion account. Legislature can use it for other priorities with regard to the enrollment and retention money. That's the proposal, the $200 million one time that the Governor is proposing. As your agenda notes, the Legislature just provided $150 million for the same purpose, and that's in the current year budget.

And actually, districts have through next year to spend that current year money, that $150 million. So system wide expenditure data is not collected and not reported to the chancellor's office and Legislature on that $150 million1 that current year money. But our office had a lot of conversations with districts about their current year money, and what we've heard is they're going to have substantial amount of money available through next year to use for outreach purposes.

So given that, we recommend the Legislature reject the governor's proposal to provide an additional $200 million. There's also, by the way, $650 million in one time money, also in the current year budget. That's for the COVID relief block grant. That's state money. That, too, can be used for outreach purposes. And districts have through 2026-27 to spend that money. And districts have told us as well, they have that money available for next year to use for outreach purposes, should they choose to use it for that purpose.

Of course, districts have apportionment monies and other funding sources for outreach purposes as well. So given that there's apparently all this extra money, unspent money, that's available to districts to spend next year. We recommend the Legislature reject the governor's proposal to Fund another round and then instead use that money to Fund the Legislature's plan all along, which was use that money for deferred maintenance, facilities maintenance, which is going to be discussed in the next issue. Thank you.

Okay.

I'm keeping an eye on time. I'm looking at 01:00. I'm going to work through these slides very quickly and connect it all together. From the conversation about affordable student housing to now, this conversation about enrollment, persistence and success. I know your agenda called it something else, but for us, it really is. Once you arrive at a college, we don't just need you to persist. We need you to succeed. And Senator Min, you asked a really important question.

Can you tell us if this is structural or is it something else? On page 29, I am showing you it is structural. There was a study that we did. It was a statewide study, and this one, we particularly targeted students who were enrolled at our colleges and did not return. And then prospective students. What would it take for them to enroll 90,000 students? Nearly 90,000 students. It's actually 90,847 raw submissions from around the state. And we learned really important things about what it would take.

But at the core, when you look at the number one answer, it says, I cannot afford college at this time for prospective students and for previously enrolled students, have to prioritize work. I started this hearing by reminding you that 64% of my students work part time or more. These are not students that are giving up on their education. In fact, they are working to make sure that they can succeed.

So it is structural when we think about financial aid, and this Legislature took bold action to address financial aid by thinking about the equitable Cal grant framework, a framework that is hopefully going to be adopted very soon. So for us, that is a structural, immediate solution. Right? Address on the front end, financial aid on the back end. Senator Min, there are all the other things that we can do to address cost. Affordable housing is one of them.

Paid work based learning, that is something this Legislature has supported. When we are saying, go and get a job, is it connected to what your dreams are? That is called paid work based learning, work study. Something that doesn't exist at a large scale at community colleges, but it does for UC and CSU. And we see the value when our colleges can employ students. They don't have to get back on a bus to get back to school. They can do that in their campus.

And of course, childcare. The number I didn't show you was the number of students that have one dependent or more. And it is quite large. So on the back end, in terms of structural, there are the things that you can do to address the cost to make this a lot more real. On page 30, I show you that what it's going to take, as we think about enrollment, persistence and success is we also then ask students what is affecting your withdrawals?

Meaning once you arrive at our colleges, why would you drop a class? And they are showing us very clearly that they again had to prioritize work and that there are additional stressors around their life and their work family environment. In this case, the second response was, we had to prioritize our mental health and psychological well being. That is who we are serving. That is what we are designing for.

And so on page 31, we show you that despite this data and what we see, what I wanted to make sure that you heard what we see is clearly students are saying we want our education to be connected back to our workforce, back to our dreams. Right. So they are prioritizing work to be able to afford school. What would it look like to have an educational system that more closely aligns the two?

And of course, they are also then saying, if I have to prioritize work, then I need an education that is available to me around my work schedule. That has to do with the design of scheduling, student centered scheduling, and then, of course, our ability to leverage all funding. The LAO mentioned all of the emergency dollars at the federal level, at the statewide level. The goal here is, as we're working on the structural solution, what is then the microscale solution?

The microscale is leveraging all of those dollars to meet student basic needs. That emergency housing in lieu of affordable student housing at community colleges is one thing that is happening immediately. Additional ambassador programs. That means employing your students with federal dollars. That is something happening in our campuses. Of course, the long term solution is more work study at community colleges and more paid work based learning at community colleges.

I think I'm going to have to just move on.

Yes, of course. No worries. Let's answer your question.

Running tight. But the thing about it is that all of you were anticipating some of the questions we were going to ask. Obviously, you responded to Senator Mins, and I think that the real concern is there's been declining enrollment. It hasn't come fully back. And what are you going to do? I think that's what you were just addressing. But let me ask it a different way of the chancellor. What do you need that you don't have in the budget to address some of the things you were just listing?

My students would want me to highlight Cal grant reform, the commitment there was made, and that is the number one thing that they have asked for. And then our colleges and what I see on the ground and I can tell you just even this week, it is making sure that we are able to move forward with affordable student housing.

Okay. Well, we had a little discussion about that, and we also had a little discussion about Cal grant reform, because we had a complete hearing on student aid, and it was rather lively, and we tried to get to the bottom of some issues and have it totally, but our commitment remains the same. And I think also we had concerns about some of the shifting of money, and I think that came up and just expressed that we had those concerns.

Are there additional questions or comments from my colleagues? No, but yes.

No questions. Just a comment. Just want to highlight. I found very interesting the comments that the LAO mentioned with the unused funds that were directed for student recruitment and how that could be redirected and used in areas where we do actually need it. So I'm not sure how that works in the process, but something that I would be curious to see if we could reallocate to where we actually need it and it could be utilized.

Senator Min.

I just wanted to thank you for anticipating my question. I didn't see your presentation in our analysis. I didn't see anything. So this is very helpful. Applaud you guys for doing this work. And I think this gives us food for thought on how to proceed. But I really appreciate you taking that effort, because I think it is really important, as I said before, for us to understand the causes of that decline in enrollment to figure out what we need to do to address it. Thank you.

And one last question to close this. There were budget items in the last two budgets for recruitment and retention. Did you do different things between the two years, or did you find some things worked and some didn't? And how did that work and what you actually used that money for in the two years?

Yeah, there was a lot of innovation by our colleges. The last few slides that I have for you that are in front of you, they are pages 33 through 35. They are the top high impact strategies. And these are the strategies that we have seen from our colleges that actually work. So all of our campus.

Meaning that you use some of these strategies that you didn't originally because they worked.

Exactly. And now we have the resources. Right. And you can innovate, you can incentivize. These were created by CEOs in our system. I convene a roundtable of CEOs. Some of them are in the audience, and there will be familiar faces. But these are the high impact strategies. There are things like dual enrollment, additional faculty, professional development.

Because I know we have to move on. I just don't want the partial brevity we spent on this to be read as our level of concern, because I think this is at the heart of some of the things, is whether enrollment is coming back and whether we're doing the right things to help with that. And I think we will still engage in that conversation when we move to item issue number two of facilities maintenance and structural equipment. Miraculously, nobody has to change seats.

So we're going to go to Madison Sheffield at the Department of Finance, Paul at Steenhausen at the Legislative Analyst's office, and then Lizette Navarrette at the chancellor's office. And so we'll begin with finance.

I'll just have a brief summary. Madison Sheffield Department of Finance the Governor's Budget includes a reduction of 213,000,000 in deferred maintenance across the three year window of 21-22 through 23-24. This means the 2022 budget acts deferred maintenance appropriation of 841,000,000. It will be reduced to approximately 628,000,000.

Also, similar to last year's inclusion of language with support for energy efficiency projects, we are including proposed trailer Bill Language clarifying that these deferred maintenance dollars can be used for childcare centers in attempt to support those colleges looking to open, reopen or upgrade facilities. In regards to capital outlay projects, the Governor's Budget continues support for existing projects. This includes General obligation bond funding of 143.8 million, one time for the construction phase of 10 projects anticipated to complete design by spring 2024.

This allocation is 90.2 million Proposition 51 and 53.6 million older bonds. I'm happy to answer any questions you may have about these investments.

Thank you very much. We'll move to the LAO.

Okay, thank you. First, we do not have any concerns with the governor's 10 proposed capital outlay projects. They're in the continuing phase for construction. No concerns there. We do, however, recommend the Legislature reject the governor's proposal to reduce by $213,000,000 already appropriated money that's supposed to go for facilities maintenance. The Governor proposes instead to use that money largely for another round of the outreach enrollment retention money, which Subcommitee just discussed in the previous issue.

So most of the deferred maintenance facility maintenance funds have already been distributed to districts and already earmarked by the districts for projects that would reduce college maintenance backlogs. Addressing deferred maintenance is important because it can avoid more expensive facility projects down the road, including emergency repairs. As you just discussed, districts could still, under our proposal, districts would still be able to use the money they already have for outreach. For those purposes. For outreach purposes.

And by rejecting the governor's proposal on the shift away from deferred maintenance, the districts be able to go ahead with the projects that they've already done a lot of legwork around. We generally do not have any concerns with the governor's proposal to explicitly allow districts to use the state facility maintenance money for childcare centers. So generally no concerns there. We do note that there appear to be a small number of community college childcare facilities that are exclusively childcare facilities.

They don't have an instructoral component for community college students. Those are on campus, the ones that are just regular childcare centers. Those are self supporting programs through client fees. We don't understand the rationale why those centers, which are self supporting, just like bookstores, and parking garages, would be able to use state money for maintenance. So we recommend the Legislature reject that portion and not allow these exclusively self supporting childcare centers on the college campus to use state money. Thank you.

Thank you. Chancellor's office.

Good afternoon. Lizette Navarette, California Community Colleges Chancellor's office want to briefly share that the deferred maintenance Instructional Equipment grant program really has two components, about 75% of the dollars allocated. So the 800 plus million, 841,000,000 that was provided last year, 75% of those dollars go to deferred maintenance. 25% of those dollars go to instructional equipment. So not all of the expenses are just on facilities. We currently have a backlog of about 5000 projects overall across all of our campuses around improvements, maintenance and other such pieces.

The massive investment that was made was really helpful because it allowed colleges to tackle some of the most substantive projects, whole reroofing others that really address safety. And so that's why they were so valuable. With smaller investments that we had seen in prior years, you can't take on some of those large projects. The funds invested by the Legislature last year made that possible, and we expect to see actually nearly 2000 projects able to be completed through the funds that were allocated last year.

We really appreciate the Department of Finance, including a commitment to childcare, and we support that proposal. Have no concern if there is an adjustment, that it needs to focus on those with labs. Two options. As you consider the governor's proposal, we do think that focusing on enrollment and retention is the right focus, but we do have concerns with diverting the different maintenance dollars.

So another option is to provide flexibility for that 200 million so that a campus can focus both on outreach, enrollment, and retention and also address their facilities projects really based on local need or the other is to allocate a much smaller amount and use the unused growth dollars that we received last year and use those for enrollment and retention really aligns with the purpose of those dollars, so it still keeps a focus on enrollment and retention. But again, you would be using a much smaller amount.

That doesn't mean pooling funds that have already been distributed. Happy to answer any questions.

Just two quick follow ups on that before we move on. How much funds have not been distributed?

Of the funds for deferred maintenance that haven't been distributed, we only have about 100 million that haven't gone out. By June, all funds will have gone out.

Okay. And in the preparation of the budget, did you count some of this money as being swept and therefore available for revenue the next year, or do you count that as completely spent so it's available for use between now and June 30?

Michelle Nguygen,Department of Finance the way that it worked in the budget was we did include a reduction to the deferred maintenance program. So if this proposal were to go through in the budget act, then there would need to be given that.

But it's a reduction in the budget year. It's not a reduction in this year.

No, it's a reduction in the current year. So that would mean that if all the funds were allocated by the chancellor's office by June, there would need to be some kind of reversion process in the months after the budget act.

I think, just as a General statement, deferred maintenance always piles up and gets more expensive. It's not done, it would be good to do. It would be good to have flexibility, be good to try to see if you can't maximize things between different programs in how you do it. And I think it's pretty hard from the dais to actually specify what those specific things are in amounts. But just that global level of looking at it would be a thing that as we work toward a budget, we.

May I make a quick comment on the childcare?

Yes.

Okay. Thank you. Just want to explain that the childcare language does not make a policy change. The childcare centers are currently allowed to be used for deferred maintenance can be currently used childcare centers, in fact, they're one of the types of projects that is actually prioritized with it for depression and.

You mean child care centers, regardless of whether there's an education component?

Yeah, exactly. Regardless, chancellor's office can definitely correct me if I'm wrong with these statistics. Our understanding is that childcare centers often use a mix of funding sources and they often rely heavily on child on District General Fund.

And we know that childcare centers are a key linchpin for students succeeding, especially students who have children, and that they really play a critical role for those students and that the childcare centers that many do not charge fees because of the fact that these are often low income students who are barely trying to afford the costs that they have for housing, et cetera, and other basic needs to do school, and then the childcare centers that do collect fees.

The fees charged for childcare center services rarely cover a significant portion of the center costs, averaging only 17% of total costs to run the center. So the fees are a very small portion. So we would urge the Legislature to consider including this proposal.

I'm sorry, Legislature to consider what the proposal?

Approving this proposal.

Okay, thank you. Great. Appreciate those comments. Anything else? Before we move on, we'll move to issue number three, forestry fire protection, workforce training. We have the same order. Start with the Department of Finance. Any comments?

I can give a brief summary of the proposal if you'd like, or if.

It's genuinely brief, go for it.

Yes. Not sure your definition of genuinely brief, but I will be brief. The Governor's Budget includes. Madison Sheffield Department of Finance. The Governor's Budget includes 14 million one time Proposition 98 General Fund for the Administration of Workforce Training grants. In collaboration with Calfire. This program supports forest health and forest industry economy by building up the workforce in these fields. This is an existing program.

At Calfire, the expectation is the chancellor's office and Calfire would develop an interagency agreement that would be very similar to the existing program, but with community colleges the only eligible grant recipients. We expect California to provide the primary Administration of the grant program, from the request for proposals to scoring applications to selecting awardees, and then the chancellor's office would purely administer the funding to the chosen recipients to answer any questions.

Thank you, LAO. Thanks for bearing with all the microphone issues.

We think the proposed Fund shift is reasonable worth considering given the state's nonproposition 98 General Fund budget deficit. Though using Proposition 98 funds could exclude other workforce providers, the proposal would take advantages of the college's existing expertise and experience in the forestry and workforce areas. Thank you.

Community colleges just briefly, want to share that we support this proposal. It does leverage and build on one of our areas of expertise, which is fire management, forestry protection. And this is an area that not only do we have expertise in the classroom, we also have robust partnerships. Currently, only two colleges have this direct partnership with Calfire. Under this new program, this would allow.

Who are those, if you happen to know?

Shasta College and Lake Tahoe. And so this would allow an expansion for other colleges that are ready and have again, this expertise.

Okay, thank you. I was aware of Lake Tahoe, but I had CalFire in my portfolio for eight years and think this is a good direction. And I think you could also many times people think of CalFire and education pipeline and think of Humboldt's now Cal Poly Humboldt and maybe Cal Poly San Luis Obispo as the main pipelines in. And I think you should toot your horn more about where people come from, the community colleges.

And then our last issue is a status update on previous Budget act investments. And we just have the community colleges and we have four listed here, foster care, part time faculty, health, chancellor's office staffing and zero degree books.

I will be brief, but just want to highlight that across the board, we have leveraged the various resources provided in the last two years of investments to really address some of the key needs that students are telling us that they have. So you see highlighted where we are really crosswalking some of those needs on slide 39 to the investments and how we are going to address what students are telling us that they need to be successful.

We've also created a new tool for California community colleges so that support their implementation of budget resources. It's called the compendium of allocations and resources, and it compiles all of the guidance as well as the instructions and reporting requirements for colleges. And we update this monthly specifically to some of the items that you've highlighted of interest allocations went out for next step program. We're very excited. We've been supportive of not only the Bill, but also.

Do you have any idea, because before the item last year, it was limited to 10 campuses and last year didn't just quadruple the funding, it blew the cap off. Do you have any idea how many campuses are participating this year? With the cap being off?

We've provided resources to all colleges that are interested. So let me double check.

That's fine. You can get it back?

Yeah, I'll get that back to you. But those funds did go out. I believe most campuses will have a program which is, again, very exciting, robust programs. Now, total allocation of $50 million, and then colleges receive over $4,200 per student plus a base amount. So that, again, one of the early allocations that was sent out around part time faculty health insurance program. We've been working very closely on this proposal, we're supportive of that.

As a reminder, previously we only invested 490,000 in part time faculty insurance, and now we have 200 million. We've worked with campuses, labor partners as well on implementation, and we have a robust.

When we have a measurement on how many people you've actually helped, in what way, and whether or not, believe it or not, there's a group that haven't been helped by this.

The program runs off of it as a reimbursement. So we begin collecting reimbursement requests on June 1, and then we solidify that data by November 1, so we'll have more details. We know that many campuses are ramping up, or creating, or negotiating, with health partners on how to do that, but provided some links here where you can see some of the questions and implementation criteria. We continue to work on professional development and other tools to help ease implementation.

On the question of staffing capacity, the budget last year provided Chancellor's office capacity to implement many years of new programs, 26 positions to be exact. Currently, we have 23 of those 26 positions filled, and we expect to have all of them filled by the end of the fiscal year. And then lastly, of interest, the Legislature wanted a status update on zero textbook cost degree pathways. The chancellor's office launched an effort to explore burden free instructional materials.

So that effort is working in parallel with our implementation of zero textbook cost degrees. The funds have gone out through three rounds. The first two have already gone out, first, planning grants for colleges, the second round, 180,000 for each college to implement and plan which degree pathways to Fund faculty that ultimately have to curate these resources. And the last set will be released this spring. Happy to answer any questions.

Thank you. I asked my questions as we went along, and we are concerned about the first two, particularly. Senator, Min. Any questions? Then we are good, and I thank you for that. And we will want to continue to hear that you filled all the 26 positions, what the statistics are of the part time health care and how many campuses were actually helped by the next step as it went along. So thank you very much. We appreciate that.

We have roughly 20 minutes left, and we're going to try to do the public testimony, and I'm going to tilt it a little bit to the people in the room because some of you traveled a long way, although you won't think it's tilting when I tell you that we're going to limit it to a minute, and it could be public testimony on any of the items. And let me thank all the panelists on the way there. And so if you'd state your name and your affiliation, you have up to a minute to weigh in on any of the items. Welcome to the Committee.

Thank you, Chairman Laird and Members of the Committee. My name is Matt Wetstein. I'm the President of Cabrillo College, and I'm here to speak very briefly in support of the housing grant program that you all have supported. Really appreciate the support. Wanted to indicate that in our case, we are about $300,000 into planning a housing development project with UCSC. So we're excited that we're ranked in the list.

If you were to agree as a Legislature Fund the $545,000,000 that's in the allocation, that actually would Fund eight of the projects as you go down that community college list. So eight projects would cost about $537,000,000. We're grateful for the support and grateful particularly for the support of our students who are the most needy in higher education for affordable housing. And I'm sure you're going to hear from them from Cerritos, and grateful for the opportunity to speak today.

Thank you. Thanks for traveling all the way up here. I happen to know that route very well. Next speaker. Welcome.

Good afternoon, Mr. Chair, Committee Members. My name is Jose Fierro, President Superintendent of Cerritos College and Current chair of the CEO board of the California Community College League. I respectfully request the Subcommitee support maintaining the current budget levels to Fund the higher education Student housing grant program. Community college are here to help our students to be successful. As the students begin their educational journey, we have an incredible opportunity to provide them with the stability they need so they can focus on their studies.

Cerritos College is travel ready. Our project has been planned, developed, and we only need the budget to break down. Cerritos College Travel Ready project will offer students housing at $730 per month, all inclusive, meaning they don't have to pay anything else to live there. No other system can do this. We can, and we have been doing it. Our students can afford to keep asleep in their cars because they can't cover $2,200, which is the cost of rent in our local community.

I've let you go ways over a minute, but you're cutting into time of Cerritos College students. Thank you very much for your comments. Welcome to the Committee.

Thank you. Good morning, chair Laird and Members of the budget Subcommitee. My name is Hector Ledesma, student trustee of Cerritos College, and I'm here to express support for maintaining the current budget levels to Fund the higher education Student housing grant program. We ask that you keep your promise to California community colleges to fully Fund the student housing grant as intended.

The governor's proposal to preserve the budget by shifting funding for student housing projects intended to support projects in 2023-24 to 2024-25 would inevitably raise project development costs. A delay would hinder Cerritos College and other campuses that have shovel ready projects from meeting their objectives to offer more affordable housing and address the student housing crisis. If we delay, we can expect the housing process, the housing problem, to exist well into the future.

Cerritos College, like the community colleges across the state, are prepared to get to work immediately in support of their most vulnerable student populations. Again, please keep your promise and fully Fund the student housing grant as intended. Thank you.

Thank you very much. Thanks for your service on the board. Next. Speaker.

Good afternoon, chair and Subcommitee. My name is Emily Gomez, and I'm here on behalf of Cerritos College. I'm the ACC Vice President. I'm here to express my support for maintaining current budget levels to Fund the higher education student housing grant program, mouthful. As we've seen, community colleges serve our most vulnerable populations in higher education. So therefore, it's imperative that we make sure that they receive all of the necessary resources that they need to continue to excel and succeed in higher education.

The housing grant program is a prime example of those resources because it gives so many of our housing insecure students the stability that they need to thrive and focus on their studies. This is especially important because community colleges in California serve more students than the UCs and Cal States combined. California college students are essential to their education pipeline in the state. Therefore, we hope we can count on you to keep your promise and fully fund shovel ready projects that community colleges have been proposed.

Thank you.

Thank you. We really appreciate your comments. Next speaker.

Good afternoon. Chair good afternoon to the Member committees or to the Members on the Committee. My name is Brandon Flamenco-Medina, and I am from Cerritos College. I am a Senator and delegate, and I'm here to express my support for maintaining the current budget levels to Fund the higher education student housing grant program. Currently in the State of California, 20% of our community college students are housing insecure. Additionally, at our own campus, 55% of our students are housing insecure.

Community colleges have proven over time that we can operate successfully a housing program. Cerritos College was the first community college in the State of California to successfully implement this housing program, and we saw our students have a huge jump in success in their academic careers, so community colleges can absolutely manage housing programs. Additionally, Members, if you want to honor your word and promise to higher education housing for housing insecure students, this is how we do it. Housing is a human right. It is a fundamental right.

No student should be wondering where they're going to sleep tonight. They should be wondering about their academic success and academic careers, not where they're going to sleep tonight. Thank you, Chair.

Thank you very much. Appreciate your comments. Next.

Good afternoon, chair Laird and Members of the budget Subcommitee. I'm Jackie Scott, the student trustee elect for Cerritos College. I want to express my support to maintain the current budget levels to fund the higher education student housing grant program. With these much needed funds, Cerritos College and other community colleges are prepared to move forward with shovel ready projects to house our diverse population of students.

As a student with housing insecurities at a time which forced me to drive an hour and 45 minutes each day from Rialto to Cerritos, I can say that these needs are sincere. As I stand in front of this Committee, I have to recognize the impact that your educations had have on your communities. And speaking for California as a whole, you guys are assets, and assets in order to obtain them, investments need to be made. Your support right now is that investment in us.

So, for these reasons, I ask the community to maintain the current 2023 and 2024 budget without delay to offer students affordable housing. Thank you.

Thank you very much.

By the way, Rialto is in my area.

Rialto is in your area. Okay. I actually don't think there's anybody left in Cerritos today, so welcome to the Committee.

Thank you. Hi. My name is Dr. Elizabeth Riley. Good morning, chair Laird and Members of the budget Subcommitee. I'm the dean of health occupations at Cerritos College, and I'm speaking to express my support for maintaining current budget levels to fund the Higher education Student housing grant program. In my health occupations division. We are training nurses, medical assistants, and other healthcare workers.

Not a week goes by that I don't hear about a student who is facing housing insecurity or who's already living in their car or couch surfing. How can we expect them to focus on their studies and becoming the next generation of healthcare providers when they don't know where they're going to sleep from night to night? My background is in health psychology, and one of the most basic principles of psychological health, which is foundational to healthy overall functioning, is Maslow's hierarchy of needs.

Humans must have their basic needs met. Food and shelter are the most basic of those. And before they can aspire to higher levels of functioning, we have to meet those basic needs so that they can become well functioning Members of our community who can contribute to society in positive ways. Yes, community colleges are new to student housing, but I would argue that this is even more reason to support the development on our campuses because community colleges serve our most vulnerable populations in higher education.

If you can begin to wrap up.

Yes, if we have the opportunity to receive these much needed housing grant funds, Cerritos College is shovel ready, and we are excited to scale our existing programs up and continue to provide for our diverse student population the services they need to be successful.

Thank you very much. Next speaker.

Good afternoon, chair Laird and Members of the budget Subcommitee. My name is Dr. Laura Tchulluian, and I'm the dual enrollment manager at Cerritos College and an adjunct instructor at the college. I'm speaking here today to express my support for maintaining current budget levels to fund this higher education housing project. There is no doubt that students' success centers on more than just academics. At Cerritos College, we're always striving and seeking to remove any barriers to equity.

Removing the anxiety associated with housing and housing needs is a really important element. As an instructor, I've taught many evening courses, and I've seen students in my class that are truly homeless. And at 10:00 p.m. When class ends and you see on their face that they don't know where to go, that's not equity, and that's not what we want to see at Cerritos College.

We want to help minimize those achievement gaps and provide the housing that allows them to know that they have a safe place to go to, to rest and ultimately focus on studies and getting a career and employment moving forward on this housing project.

I'm sorry. If you wouldn't mind wrapping up.

Sure. We are shovel ready and excited to start.

I appreciate that the President has the same talking points to everybody. This is good. Thank you very much for your comments and welcome to the committee.

Mr. Chair and Member, Rebekah Kalleen on behalf of the Community College Facility Coalition. Very hard to follow the students and leaders at Cerritos College, but I'll try CCFC supports the student housing construction grant program. We oppose the $250,000,000 delay. We're neutral on the revolving loan Fund. We're asking the state to maintain its commitment to provide 50% of the construction grant funds to community colleges. We obviously have the need. You heard about the $1.4 billion in projects that have been submitted.

That need is artificially low because colleges districts were only permitted to submit one application per district, so they had to make a choice among their colleges. We do not suggest prioritizing the revolving loan fund over the construction grant funds. A couple of points there. Construction grants deepen affordability. Rents are just covering annual operating costs for the revolving loan fund. The rents have to pay both the cost of construction repayment of the loan as well as your annual operating costs.

Additionally, the RLF may not be accessible in all parts of the state due to some of the requirements for the workers on those projects. And we've got some worker pipeline catch up that we need to do in order to accomplish that. We oppose also the scheduled maintenance cut in current year. And thank you very much for your work on this.

Thank you and thank you for your patience in waiting to public comment.

Thank you, chair and Members Mark Mcdonald, MGI advocacy on behalf of a number of local community college districts, including Los Angeles, Antelope Valley, southwestern Peralta, Contra Costa, San Bernardino, I will just say ditto on the construction affordable housing program. Our community colleges are shovel ready to go on the COLA. I wanted to address a couple of other issues that came up on the COLA. We would urge Prop 98 parity.

So whatever you do for K12 do for community colleges, including if you can't fully Fund the COLA this year, some sort of mechanism that will be made up next year on the 200 million. We would urge support the chancellor's office suggestion to provide flexibility, maybe provide the colleges with the opportunity to submit a plan to the chancellor's office as to how they will use the money, which includes facilities maintenance as well as outreach. Thank you.

Thank you very much next speaker.

Good afternoon, Chair Laird and Members of the Committee. Molly Mcguire, on behalf of the Campaign for College Opportunity. The enrollment decline under discussion today is something the campaign has been analyzing for the past year. And while it's true that California is not an outlier nevertheless, it remains a concern given its significant equity implications. The decline in community college enrollment and retention disproportionately affects Low income, minoritized and first generation students and therefore also affects their numbers in our four year institutions.

It carries implications for how diverse our workforce will be and will likely exacerbate California's already extreme wealth and earnings gap. This interplay between community college enrollment trends and the transfer process, particularly the ability of segments to meet their transfer targets per the compacts, is an issue we are monitoring closely. And finally, we would strongly second the chancellor's identifying Cal grant reform as the most meaningful investment the state could make in our higher education students. Thank you.

Thank you very much. Next speaker good morning.

Andrew Martinez, Community College League of California I just want to highlight three things. One, we're very appreciative of the COLA and would like to mirror my comments to the parity issue on K12. Second, we are appreciative of the concept of flexibility. It comes to deferred maintenance and enrollment dollars and appreciate that as you go forward.

Third, as you heard, our colleges are ready to meet the moment when it comes to housing, and we are shovel ready and want to be partners with you on that issue. Thank you.

Thank you. I think using the phrase meet the moment is effective lobbying of the Governor for sure.

Good morning. Carol Gonzalez here on behalf of Long Beach Community College District, we asked the Legislature not to delay the student housing funding. Dittoing all the comments made in the Committee today. The need couldn't be any greater. Community colleges are shovel ready and especially for affordable housing. We really encourage the Legislature to keep the minimum promise of the 50% split for both housing projects. And we really appreciate your time. Thank you.

Thank you very much. We appreciate that. And that completes the comments in the room. And we have essentially run out of time. But let me ask the operator in the teleconference service if you have people waiting to speak and how many.

I think it's possible we lost the attention of the person in the teleconference service. Four. Three. Okay, then. Moderator I will take those three callers and limit them to a minute, and then that'll complete the hearing. Welcome to the Committee.

Thank you. Thank you. For public comment. You may press one and then zero. And we will go to line 20. Your line is open.

Thank you. Chair and Members, this is Ashley Walker. On behalf of North Orange County Community College District, we are calling in support of the student housing grant funding program and the COLA. Thank you very much.

Thank you very much. Next speaker thank you.

We will go to line 21. Your line is open.

Chair and Members, good afternoon. Representing CFT, we would like to caution against flexibility in the categoricals. We want to thank you for the COLA and continue to support it. And we'd like to voice that we want more stable funding that's incentive based as opposed to punitive for those who are not quite on skiff.

We additionally have concerns about the implementation of AB 928 that has conformantly eliminated category of lifelong learning and self development for the CSU transfer pathway. Thank you so much.

Thank you very much for your comments. We appreciate it. A moderator, a last caller.

Thank you. We have line 23. Your line is open.

Hi, yes, good afternoon. Kyle Hyland, on behalf of the Association of California Community College Administrators, ACA is appreciative of the governor's proposal to apply the statutory COLA to apportionments and the select categorical programs. However, ACCA believes, like the chair, that all categorical programs, and not just a select few, should receive the statutory COLA as all programs are facing increasing operational costs. We'd also like to align our comments in opposing the shift for the higher education student housing program.

We believe that the need for this program is now and that shifting funds to an additional year will just face increased construction costs. And act also opposes the governor's proposal to reduce deferred maintenance by $213,000,000 in the current year, as these projects are important and they've already been pretty much allocated. So thank you. We look forward to working with you on these important issues.

Thank you. We appreciate your comments and that completes our public comment period. And I want to apologize because I am sure there were a few more people on the phone that were hoping to get in, and we want to hear from everyone.

So if you were not able to testify or you have comments that are more expansive than what you were able to do, you could write the Committee, in writing to the budget and fiscal review Committee, or visit our website, the Budget Committee's website, and make comments because your comments and suggestions are important to us and we want to include your testimony in the official record.

And we do thank those, particularly in the room that traveled a long way to be able to testify today, and I hope this was meaningful to you and we appreciate it. And speaking for the Senator Ochoa-Bogh, we're all very happy that you're not eligible to run for the Senate in the next election. Can you would be very powerful candidates. I think so. Thank everybody for their participation and their patience with the speed of this hearing. We've concluded the agenda for today's hearing.

The Senate budget Subcommitee one on education stands adjourned.