Senate Budget and Fiscal Review Subcommittee No. 1 on Education

Senate Budget Subcommittee One on Education is called to order. The Senate continues to welcome the public in person and via teleconference service. With a very few exceptions and hopefully none, we now have our witnesses in pan panelists in person. We still operate the teleconference center for public comment today. The participant number is 877-226-8163 the access code is 718778. Today is the second subcommitee hearing on higher education issues, the third subcommitee hearing in this budget process. And we'll first cover the California Student Aid Commission.

And we'll be joined by the executive director, representatives of the Student Aid Commission, Department of Finance and Legislative Analyst Office for discussion of Cal Grant Program and Middle Class Scholarship Programs. We'll discuss the budget proposals and status updates. And lastly, we will consider the core operation, student housing, and Governor's proposals for the UC College of the Law, San Francisco, formerly named PRINCE. And we'll be joined by the chancellor and the dean. And before we make the first presentation, we have a quorum present.

So let me ask for a call of the role.

[Roll Call] We have a quorum.

Thank you very much. We're now going to move to issue 1A, and we're going to have the Department of Finance and legislative analysts at the dais because there aren't enough microphones. And then we'll have Marlene Garcia from the California Student Aid Commission come and sit at the table and we will hold questions until everyone is presented. And we will hold public comment until after we're through all the issues. And our outside time is roughly 1:30.

So when we get to public comment, I will judge by how many people are in line, whether we're going to have a minute or just going to have people say their name and organization and just what their position is on a particular issue. So we'll judge that when we get to it. With that, let's welcome Marlene Garcia to the table and Devin Mitchell from the Department of Finance and Lisa Qing from the Legislative Analyst Office to the dais.

And I suspect that Jake Bremner is here in case there's additional questions of the commission. So, welcome to the committee. You can make your opening remarks.

Good morning and thank you, Chair Laird and members of the subcommitee. I really appreciate and welcome the opportunity to update you on the years long effort to reform the California Cal grant system. Marlene Garcia, the Executive Director of the California Student Aid Commission. And just for background, I'm really privileged to have this role leading the California Student Aid Commission.

I worked in the legislature for a number of years as a staff person and was part of the original staff team that designed the first Cal Grant entitlement program. So, I really understand a lot of the details and the purpose behind this important program. But I also was a Cal Grant recipient myself and benefited from the opportunity which really made it possible for me to succeed and go to college and frankly, transfer from a community college to the University of California.

So, I really share my professional experience and my lived experience with you here today. So, let me provide a little context about why we started this journey to reform the Cal Grant. We are the most generous state financial aid need-based program in the country. We distribute more than $3 billion annually and serve half a million students.

And yet the Cal Grant program is so complicated and still has a number of rationing provisions that keep so many students out, so many of the very students that would benefit most from the program, the lowest income students and first-generation students, largely Latino and Black. The goal of the Cal Grant reform was to simplify, expand by removing equity barriers and to modernize the Cal Grant system, and have it designed for students today to meet students where they're at.

But broadly speaking, what we were really trying to do is create a system that serves students that are considering college today. We tried to create a cohesive system that made it easy for the students to navigate as opposed to trying to figure out where they go to complete their FAFSA. And what does it mean right now under the current Cal Grant program? When they apply for a California Dream Act or the Cal Grant, they don't know which program they're applying for; they don't know how much money they're going to get. So with the Cal Grant reform, they would not only know how much money they would get, we'd have a lookup table, but they would also know exactly how much because of this institution they go to. So we think that a system that is designed to be user friendly, intuitive is really important for today's student because it's not just the small number of elite students that go to college as when the program was started in the 1950s.

Now we need every student to consider a college degree certificate or a two-year degree or four-year degree. So under Cal Grant reform, the goal of reaching a debt free college is also to create a base of understanding where students will know where to go and what they're going to get with Cal Grant. But the interplay between Cal Grant and Middle Class Scholarship and Pell Grants and institutional aid and other social service programs like CalFRESH.

It's really important to think about what the student needs in terms of the resources that would be available to them, not just the Cal Grant. So when we devise the Cal Grant reform system, we're looking broadly at how Cal Grant can be a fundamental, easy-to-understand system and how a student can look at their particular circumstances and understand other options that are available to them.

And altogether, you start to create a package that creates and leads a student to a debt-free college free of crippling loans. And that really is a concept behind that. But we have to start with Cal Grant. And, of course, we are so grateful for the recent investments and policy changes that have already been made to the Cal Grant program, namely the Community College Entitlement Program.

But we've layered that on the existing legacy Cal Grant program, and that has created some complexity that's even more difficult for students to navigate, even though it is a lot more generous. And we're grateful for that. So today, we are looking at taking that final step, and we really want to thank all of you, especially Chairman Laird and the budget team, for helping us achieve what we've been able to accomplish so far. But under the Cal Grant reform proposal, we have two types.

We go from eight programs to two. We go from eight different flavors of Cal Grants to Cal Grant two and Cal Grant four. So that's why it's so easy for students to understand. You can be that first generation student, or your parents can say, okay, "I'm going to a community college. This is how much I'm eligible for", or, "I'm going to the UC. This is how much I'm eligible for."

We believe that we're at a time and place in our history that we have to make systems intuitive for students, and then they can focus on the bigger questions, such as why is college a good thing for me? And how does this lead me to a better life? That's what we want. We don't want them to struggle with the nuts and bolts of, wait a minute, how do I make sense out of this?

So what we do know is that the Cal Grant agreement expressed in the Cal Grant reform would occur if a multi-year revenue projection next year, May 24, deems that there is sufficient funding for this to go into effect. The needed investment is about $360 million of ongoing funding. It's one that we believe is essential to California's workplace.

If we truly believe that our workplace, our economy, requires that all Californians have the opportunity to be a contributing member of that system, to keep it thriving and growing as it has been. And to do that, they have to not only have access to financial aid, they have to know that it's there for them. The majority of the lowest-income students don't believe that financial aid is really available. They don't believe that it's gift money and not a loan that they don't have to pay back.

So by simplifying the process and saying, you have a guarantee in California, we offer that like no other state in the country. We're giving them the opportunity to look at what's possible. And that's really what's at the core of the Cal Grant program. We know that student surveys and data and outcomes still show that students perceive that tuition is still out of reach for them, when in fact, California is one of the lower cost systems in terms of providing affordable tuitions.

What they're not recognizing that it is basic needs that's a struggle for California students. So we believe by simplifying the program and really helping them understand how they can afford their basic living expenses is a critical part of Cal Grant reform. And as students are able to take advantage of other opportunities that we have, they can see how they can piece together that system, and hopefully, we're going to do a better job of braiding those opportunities together to help students understand it's really important.

And this is what I think about as leading this organization is how do we create systems that meet students where they're at, instead of having students trying to figure out how to navigate these complex processes and then get discouraged along the way and maybe never even believe so. California has been a national leader in this space on college affordability, in large part because of the leadership of the legislature and the Governor.

And following through on this investment in these final policy changes is a really last piece of the puzzle to make this system work efficiently, effectively, and in service of students. So, I thank you for your attention to this important program and look forward to answering any of your questions.

Thank you very - thank you very much. Appreciate you being here. And we'll hold the questions. Tell everyone we're next going to go to the Department of Finance.

Hello, can you hear me? Good morning, Chair and Senators: Devin Mitchell with the Department of Finance. Marlene's addressed some of this, but Cal Grant is the state's primary financial aid program, awards grants to students attending a UC, CSU, California Community College or other qualifying institution. Cal Grant is an entitlement program, so students who meet all specified eligibility criteria will receive a community college, high school, or transfer entitlement award.

Additionally, students who do not meet all the eligibility requirements for an entitlement award but still demonstrate financial need are considered for one of the 13,000 grants dispersed through the Cal Grant competitive program. This budget assumes expenditures of 2.3 billion to support the Cal Grant program in fiscal year 23-24. We estimate that the program will provide more than 377,000 awards to the entitlement program next year.

Despite a very difficult fiscal climate for the state, this budget maintains California's historic investments in financial aid and support for students pursuing public higher education. With that said, due to caseload adjustments, the Student Aid Commission indicated reduced expenditures on the Cal Grant program of 209.7 million in the current year and is projected to be 286.5 million in 23-24 based on the most recent estimates, lower participation in the Cal Grant program and reductions in financial aid disbursements are largely associated with the lingering effects of the COVID-19 pandemic.

The driving factors are enrollment and retention declines in the Cal State University system and at California community colleges, as well as, to a lesser extent, retention challenges in the UC system. Though these trends have continued so far in 22-23, there are signs of a rebound in program participation. Recent data has indicated small year-over-year increases among new students receiving a high school entitlement Cal Grant award even as renewal awards continue to decline.

Additionally, the implementation of AB 469 at the state level and the FAFSA Simplification act at the federal level over the next few years is expected to increase financial aid applications by new students and consequently the disbursement of aid. Regarding Cal Grant reform included in the 2022 budget agreement, the Cal Grant Reform Act would change the design of the program if it goes into effect.

The existing ABC structure would be replaced by a Cal Grant two award for nontuition support for community college students and a Cal Grant four award for tuition coverage at Cal State and UCs. Additionally, income eligibility ceilings would be lowered to the level of the federal Pell Grant program agent.

Time out of high school restrictions would be removed, the new program would not have a minimum high school grade point average requirement for community college students, and the CCC expanded entitlement award recipients would be able to continue receiving this aid upon transferring to a private, nonprofit institution. Finance continues to monitor the state's long term fiscal outlook as we get closer to May revision in 2024, when the administration will determine whether these changes will be implemented. Thank you.

Thank you very much and now we'll go to Lisa Qing of the Legislative Analyst's office.

Thank you and good morning. Chair and Members. Lisa Qing with the Legislative Analyst's Office. Regarding the Cal Grant caseload adjustments described by the Department of Finance, we believe these are reasonable based on the available information. We would just note that you'll receive updated caseload data at the May revision. I'll focus my remaining comments on this issue on Cal Grant reform. As the commission noted last year, as part of the budget agreement, the state agreed to subject Cal Grant reform to a trigger determination, meaning that the state would determine next spring, likely at the May revision, whether to proceed with these program changes in 2024-25. Our main concern with this approach is that the timing of the trigger determination conflicts with the university admissions process.

UC and CSU campuses generally aim to send financial aid, offer letters out to students in the spring preceding the academic year so that students and their families have that information available as they're making college enrollment decisions.

If the state waits until next May to determine whether to proceed with Cal Grant reform in 2024-25, some students will likely be in the position of making enrollment decisions before it is determined whether they're eligible for a Cal Grant or how much aid they will receive under the potential new roles.

If the state were to instead make the determination sooner, we think it could provide students with greater clarity on the amount of financial aid that's available to them in 2024-25 while also providing the commission in the segments with more time to implement significant program changes. We recommend adopting this latter approach and determining as part of this year's budget process, whether to proceed with Cal Grant reform in 2024-25.

If the legislature wishes to proceed, we recommend it designate funding in its budget plan for this purpose, rather than relying on a trigger that has an uncertain outcome. Finally, as the legislature is making this determination, we encourage it to weigh its options across both the Cal Grant program in this issue and the Middle Class Scholarship program that we'll be discussing in a few minutes here. Both of these programs address a shared goal of increasing college affordability.

However, they do so in different ways, so they impact different groups of students, and they have different costs and fiscal implications. At this time, the legislature has options to expand either of both programs to the extent funding is available, and in some ways, the programs can be complementary. Thank you.

Thank you very much. We're going to move to questions, and let me just begin with a couple, and first, for the Director, it seemed in your testimony you were laying out what you thought should be reforms and then also talking about the budget issue. So you were sort of laying out some policy choices and then talking about what the precise budget issues were. Were you suggesting that the policy reforms be done as part of the budget process?

Is that what I was hearing, or were you laying that out? Because we just happened to have four legislators in the room, and it might be nice if they did something on the policy level.

Well, my answer to that is to just provide a little background as to how we got here. My position is I would like to urge the legislature to adopt it when it is most possible to get it approved. And so I'm not suggesting when that should happen. Whenever it happens, I just would like to see this move forward and move forward in a timely way so that we can have the more than 150,000 more students have access to Cal Grant.

So that's the urgency behind it when it happens, whether this year or next year, as prescribed in the budget language. I defer to you as the leaders, policy and political leaders.

Okay, thank you. And let me back up and make a comment I probably should have made at the outset of the hearing, and that is the beginning of the agenda packet, explains the different programs and explains then how we will be considering them item by item in the hearing today.

And it's my analysis and just mine; nobody else can own this, that our previous system sort of took a very limited amount of money and then dreamed up all these arbitrary reasons to get down to the amount of money, not because the amount of money was meeting the needs that people had. And I think it has been the goal of the legislature, even though it's been piecemeal, to try to expand the number of students.

So it's really based on the eligibility of who needs the financial aid. Do the general direction of moving into segments that weren't included in the financial aid programs before, and move in the general direction of the fact that financial aid for fees is not the only need that exists. There are basic needs that also allow people to afford to go to school that might not be able to do it.

And there have been individual efforts or inclusive efforts on books, on housing, on food, or just the recognition of that for more general financial aid. And I probably should have said that at the beginning, but it just sort of provides some context for what we're doing here.

And then the question I was going to ask Finance, and you alluded to it in your comments, and the Director mentioned it, too, we have a trigger that's set up in a year, and we've been getting a lot of incoming communication to the committee about people that want to make sure that still goes ahead. But of course, we don't necessarily know what the budget realities are. What do you think the state of play is toward the trigger right now?

So that would really just be speculation. I'll just say-

But that's more than many finance people are willing to do. I'm just teasing you. Please continue.

No, I was just going to say the expansion of any entitlement program like Cal Grant involves the potential for unknown additional cost pressures to general funds. So the logic behind the trigger is that sufficient resources need to be available over a multi-year period to support these changes because they're sort of a known unknown.

And I think it's just, obviously, I can't speak; everybody's about to speak for themselves. But for me, we really hope there's enough money to move it ahead. If we get to next year and the budget is tight, we may want to weigh what different things are in the budget in terms of relative importance to see if this actually, despite the trigger, we still think it's important to put money into this program to move it ahead.

So for me, thank everybody for those comments and then ask if there are questions from members of the committee. No, this is a very unusual moment, so thank you. But don't go very far because we're going to move to item 1B, which is the state financial aid expansion on the Middle Class Scholarships. And we have the same set of panelists. And so we will begin with the Executive Director of the Student Aid Commission.

Thank you again, Chair Laird, for allowing me to speak on another important topic and a new investment towards college affordability. This year has been the first in which we've awarded students with the Middle Class Scholarship through the expanded version 2.0 of the program, as outlined in the 2021 budget and funded for the first time this year. Through this expansion, we are serving more students with a Middle Class Scholarship than ever before. Previously, we awarded about 60,000 Middle Class Scholarships.

This year, we're serving over 300,000 students with a Middle Class Scholarship award, including many Cal Grant students at the UC andC SU who are eligible for a Middle Class Scholarship on top of their Cal Grant. We view these changes as very complementary with the forthcoming changes to the Cal Grant we just discussed. And the Cal Grant begins to cover tuition for more students at our UC and CSU campuses.

And in a predictable way, the Middle Class Scholarship will help provide more support towards those basic needs which we know students struggle with to persist in college. Additionally, more middle-class students above the Cal Grant eligibility cutoff will be eligible for a Middle Class Scholarship and other campus-based aid. Taken together, these two investments in the Cal Grant and the Middle Class Scholarship can really put California on pace to creating that debt-free pathway to a college degree.

Now, this work has not been without its challenges for all of us. We've been working with the segments and trying to develop the implementation details to put this program in effect. This year, the Middle Class Scholarship's new structure is taking on the total cost of attendance, which is really the first time we've done this in California, and seeking to maximize other forms of financial aid and to then package it so that we look at students, the various forms of aid that a student receives, and at the local campus level, then they determine what that last dollar is of the Middle Class Scholarship to fill that gap.

As you may know that at this point, the state has invested to cover 24% of that cost of attendance for students through the Middle Class Scholarship component, with an expectation that the full amount will be funded in future years. The last-dollar nature of this program is outlined in statute, so it has to be the last dollar. But this is what creates a lot of the complications, because a student, for example, if they get financial aid, the campus financial aid officer packages the program.

They say, "Okay, you got a Cal Grant, you got a Pell grant, you got institutional aid, you got work study, and now we're going to close out by 24%: the middle class scholarship." If that student gets other aid or emergency basic needs aid, what they have to do by statute is they have to then to reduce the amount of the Middle Class Scholarship to account for that additional aid.

So the student's getting this additional aid, and all it does is just reduce the Middle Class Scholarship, and it requires repackaging in the middle of the term, which is not a great situation for financial aid officers, but more so, it's not a great situation for students. So we think that's an area that can be addressed, and we're eager to continue to work with the legislature, the administration, and the segments to refine these statutory structural issues.

We are also appreciative of our segment partners, the UC and the CSU, who've been working with us to hammer out these details and to hammer it out in record speed. We did implement this last year in the budget and then had to work at a very fast clip to get the rosters in place so then the segments can develop their own plans to disperse the funds.

While we know that there are some issues that the segments and campuses still need to work through in the first year, we believe that together, we're going to continue to identify how we can really implement this program as seamlessly with the Cal Grant program and other aid programs, so that the student at the bottom, at the end of the day, they get the money they need to pay for college.

And when it's in their wallet, it doesn't matter whether it was Cal Grant or Middle Class Scholarship, it's the money they need to pay for college. So that's what we're focused on. Let's give them the money and the resources they need, so they have the confidence and the faith that they're going to be able to piece together their college education and be able to pay for it.

Thank you again to our leaders in the senate, your partners in the Assembly and Administration for your work on behalf of California students and this major investment.

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

So the budget includes 856 million to support the Middle Class Scholarship program in 23-24. The appropriation includes an increase of 226 million, onetime general fund, delivering on the intent to provide this additional investment that was included in the 2022 budget. This increased investment will focus resources towards reducing a student's total cost of attendance. MCS provides eligible undergraduates and students pursuing a teaching credential with scholarships. The program is for students with family income and assets of up to $201,000 a year.

Award amounts are based on a student's available resources and the cost of attendance at their institution. MCS, unlike Cal Grant, is not an entitlement program, so award amounts are also shaped by the total number of students eligible and funding for the program appropriated by the budget each year. We estimate that the program will provide more than 291,000 awards next year. Thank you.

Thank you. We'll go to the Legislative Analyst.

Thank you. So, as my colleagues in the panel have noted, the way the state budgets for this program is it provides a certain amount of funding for it each year, and then the commission determines what percentage of each student's remaining cost of attendance it can cover within that funding level. And also, as the commission noted, the current funding level in 2022-23 is estimated to cover about one quarter of students total costs of attendance.

So you could think of this program as roughly one quarter of the way to full implementation. The augmentation that's included in the Governor's Budget is estimated to increase coverage in 2023-24 up to about 33%, about one-third. However, because the augmentation is one-time in nature, the funds would be removed the following year. This means that in 2024-25, continuing students will very likely see their Middle Class Scholarship award amounts go down. To prevent students from experiencing this kind of decrease in aid, the legislature would likely face pressure to find additional funding in 2024-25 to sustain the higher award amounts. So, as I mentioned in the previous issue, we recommend the legislature first weigh its financial aid expansion options across both the Cal Grant program and the Middle Class Scholarship program. If it wishes to proceed at this time with expanding the Middle Class Scholarship program, we recommend it do so with ongoing funds rather than onetime funds.

We think that ongoing funding would provide greater certainty to students and their families about the aid that will be available to them in future years while also better reflecting the cost pressures to the state associated with expanding financial aid in any given year. Thank you.

Thank you. And now we'll move to questions, and I don't know who the best to ask is. There were some statements about what happened this year. I'm just curious about the implementation. Given the fact that parts of this are new, how is the implementation going?

Well, I believe we worked through a lot of the rough spots because the funding was delivered to the segment, or we provided the roles and information that they needed to then make modifications to their software programs to disperse the funding. And it took CSU a little bit longer than it took the UC, but the students have now received their funding.

And so we think we've worked out the bulk of the kinks that were really driven by the compressed timeframe in which we were trying to implement so that the students can get the money as quickly as possible. And that's what we were all trying to do. And it was just a timing issue when it was approved in the budget and when we could actually get the funds out to the students.

And so I know there was an LAO report last year on sort of the number of students and they're going up. So, I don't know, maybe Finance is the best person to start with. So the fact that there's the amount of one time money that is here, what is expected to be the result when the one time money isn't in the following year's budget?

So, again, that would be a conversation for future budget years. As of now, it would go back down to, I believe, around 632 million.

But if it goes down, is the expectation, then either the amount of grants are going to go down or the number of people receiving grants is going to go down. I mean, yes, that's for future years. But it's in front of us as a one time thing.

And if we don't want the grants to go down or we don't want the number of students receiving grants to go down, that's a policy question in front of us rather than for next year, because they've just gone down or the grants have just gone down. So I'm trying to get at, if you believe that's what the impact will be, that grants will go down or the number of people receiving grants will go down.

That is just the nature of a one-time augmentation.

Then I'm going to project. Okay. And hopefully that microphone's on. Please identify yourself. You're obviously from the Department of Finance.

As current loss would say, the, the amount of grants, aid provided to eligible awardees would decrease should the amount of funding in budget year plus one decline.

Who determines that?

Do you have a follow up.

For clarification, to help me understand a little better, and perhaps my colleagues. But who determines if it's the number of students or the number of the. Or the amount that goes down that determines which path we follow through when the amount of money that's available decreases? I think that's primarily where would be helpful for need to know who has the power to decide the number of students being impacted or the amount being awarded.

I love it when Members channel me.

That's a matter of education code. So when the program was created in, I want to say 2014-15 initially, that was thought it's a statutory program with. It's not an entitlement. So at the time, we had 176,000,000 appropriated in law for the middle class scholarship. Full implementation of the program took a few years. At no point did we breach that statutory appropriation. And if we had per state law, grants to individual awardees would have decreased. So if the Legislature would like to change that direction, it would require.

But I'm still not sure you're getting to the answer to the question. So does the statute that adopted in 2014 or 2015 lead to whether the grants will be reduced or the number of people receiving them will be reduced?

Grants will be reduced.

Okay. Thank you.

It does not change eligibility.

Thank you. And it looks like the Student Aid Commission wants to say something.

I think our colleagues at finance have answered the question fully. We were just going to help clarify that statute does dictate which students are eligible. Based on this nuanced calculation for the award amount and then that statutory cap, we stretch those dollars across all the eligible students based on the percentage of how much that funding can help us reach what is identified as the total cost of full implementation of the middle class scholarship program.

And I would just say on behalf of the Committee, then that is a policy issue for us to decide, recognizing fully that there happens to be a budget deficit, but it is still a policy issue for us discussed as we move forward. Yes, Senator Smallwood, quite this.

Thank you, Mr. Chair. And I just want to add a follow up question to that, and that is, do we have a sense of how many students then would not be able to attend college because of that reduction? Do we know how many in terms of grants, in terms of potential recipients? What does that look like in terms of students that will not be able to attend college because that funding would not be made available?

Senator, it's a really important question for us to consider. I don't know that we have access at the Student Aid Commission to data where we can make a one to one connection on how does a one time increase and then reduction of the middle class scholarship program impact student behavior around enrollment decisions. I think it would mainly impact students who were renewing their awards where in year one or two of their experience at a UC and CSU, they've been receiving a higher award amount.

And then the following year there's that potential for a reduction. I think for our students who are applying as freshmen or transfer students, they wouldn't have received the middle class scholarship award previously. They would hopefully be excited by the good news that they're getting this additional support beyond other forms of financial aid. So they wouldn't be impacted quite as much by that reduction. But I think there is this piece around how would that impact the renewal students, as we call them?

Senator, and thank you for that question. That is sort of the bottom line that we're trying to understand. How do these programs impact students'decisions, to persist? And the way I've always looked at it, you have the students, I mean, students in California have need. This is a very expensive state to live in. But those students who are living at the poverty level, they're going to be affected most significantly when you remove some of their financial aid because they're not going to have other options.

If you're on the upper end of the income schedule, it's going to be a challenge, but it may not be as absolute in terms of impacting whether or not you're going to continue to college.

So it would be a matter of looking at the numbers and right now, and maybe, Jake, you know this, the percentage of students that are getting Cal Grant who would get the middle class scholarship overlay on top of it, there's that group, and then there's the students who are on the upper end of the income spectrum that are just getting the middle class scholarship. And that's a certain amount above to help them with tuition and fees.

So when you look at that Cal grant, students are already getting the Cal grant. So they've got their student fees. They're benefiting from the basic needs. So we really would need to look at the numbers and analyze what impact that would have if, in fact, the program were to be reduced. But clearly, students at the lowest income levels are the ones who are most to not persist.

And if I can ask a follow up question, does either the Lao or finance wish to comment and reflect on this question in any way? Senator Smallwood Quavis yeah. How many would be reduced or cut or pushed down? Yes, and I understand that actually, the way the question was asked, that requires some speculation of what individual decisions would be. But the question exists, like how many people wouldn't receive and therefore might make the decision not to continue.

And I'm just giving you the chance, if you have any information you wish to reflect on the question. If you don't, which sounds like you were about to say, does the LAO have anything they'd like to say?

I would agree with the Commission that it is difficult to anticipate the precise impact of this particular award amount on persistence, given its interaction with the other award amounts. Those considerations that Ms. Garcia raised are all relevant. The only thing I would add is that in your agenda on page 11, there is some data on the current number of recipients who are receiving this award. And so that could give you a sense of just the pool of individuals who might experience a change.

For example, in 2023-24 about 290,000 recipients across CSU and UC are expected to receive a middle class scholarship program. Of those students, those who renew, those freshmen, sophomore or juniors, they're the ones who would likely experience the decrease the coming year. Thank you.

And let me just make a comment before going to actually, did that complete your question? You good? Okay. And the comment is, what happens to us is if we go ahead with the one time money not being renewed, people come to us and say, didn't you see this coming? And we will fuck back on this conversation where nobody knows for sure, even though they'll come back in a year and say, didn't you see this coming? So, Senator Min.

Yeah, I want to just follow up on the same topic. I thought that Lao made some important comments, and I know that we're going to get data. I know it's backward looking, so we don't have it yet on the impacts of this, but I might just proffer the idea that this is not too dissimilar from what we saw in the subprime mortgage crisis, which I studied, where we know that consumer behavior for complex financial transactions often is influenced most heavily by the entry price.

That is to say, back in 2007, 2006, 2005 we saw a lot of people purchase homes they knew they couldn't afford over the long run because they could afford it at that teaser rate level, the Low initial monthly payment level. And I would suggest that perhaps a lot of students might be behaving similarly.

So again, we don't have data, but this seems to me to be a huge problem that we're facing where we're giving students a significant amount of aid and we're yanking it away from them in year two and beyond. And so I guess that's a point. I guess the question is why did we not perhaps think about structuring this over 234 years rather than as a one time, one year payment?

Was there any discussion of maybe whether we should react to this type of potential cliff that might occur, that we might structure these programs in a way that might outlay these funds over several years rather than one year? I think that is directed to Department of Finance. Probably.

Funding for the program has changed since 2013-14 a number of times. So there's a set ongoing number, and then there have been these augmentations in various years based on resources that are available.

But just if I could interject, I mean, we had a one time payment here. This is not going back to 2013. This is last year. Right. So with a one time surplus, we chose to do this as a one year student aid increase. And I guess the question specifically is when we are structuring the program, and this might have been your predecessors, it might have been you.

Was there any thought given to the concerns raised by Lao that perhaps we should slice this up into four parts or two parts or whatever so that we'd avoid having that fiscal cliff that students are going to be facing next year?

I wouldn't be able to speak to that specific question around the discussions that took place.

Do you think that would have been a wiser approach than the one year outlay?

Well, wait a second. I can answer that question in a way that might shed some light. When there was a two party legislative agreement between the Senate and the Assembly, we did not have that as one time. When it became a three party agreement that involved a third party, then it became one time. You can reflect on what that means.

I appreciate that, above my pay grade, but I would just say this is obviously a concern, and I just want to associate my comments with those of my colleagues that I think this is a deep concern. I would suggest that we might expect to see a much bigger problem as that data starts to come in.

Yes. Senator Ochoa Bogh.

Following up on my colleague's comment for the LAO. What would present the best, and I have my own personal bias idea on notion on there, but from your perspective and from your office, what would be the best means by which we could guarantee more of a security for our students to have moving forward as we plan their 24 year educational pathway?

Yeah. So our recommendation would be to use ongoing funding to support any further augmentations to the middle class scholarship program. That way, the state is committing to increases that it expects to be able to sustain the coming years so that continuing students, when they renew their awards, would receive a similar amount to the previous year, and also that incoming cohorts will continue to receive as much aid as the cohorts before them.

So here's my question to Ms. Garcia. If it meant a more modest, ongoing, secure funding for our students, would that be best in your perspective, or would you take the risk of helping a greater number of students without the certainty of having the ongoing funding for these families? I have my personal ideas, but I'm kind of curious to hear your thoughts.

That's a hard question for me to answer. I have my personal feelings, but it's not my decision. We just implement the law. And of course, I would like to. I mean, we're, we're, we're, we're positioning ourselves as wanting to provide as much information and predictability to the students. So of course, that would be the ideal. But we are balancing a number of different budget challenges. But of course, it's always best to offer predictability.

That's the hardest part, and it's hard when you have a fluctuating budget on that. That's why I wanted to know what the priorities should be or would be preferred in order to best make the decisions for the powers that be on that factor. So thank you.

Are there any remaining questions on this item? Then let me just say the Committee was fairly clear, individually and collectively, where would kind of want to go? Then let's move to issue two, which is the governor's workload proposals for the Student Aid Commission. And in this one, we have the Department of Finance first, the Legislative Analyst second, and Jake Brimner from the California Student Aid Commission third. And we will begin with the Department of Finance.

Devin Mitchell, still with the Department of Finance. The budget includes an increase of 1.41,000,001 time General Fund in FY 2324469,000 of which is ongoing thereafter to assess the Commission's current information technology system, address cybersecurity issues, and support two positions.

This investment will help CSAC better handle the increased volume of sensitive student data due to the establishment and expansion of financial aid programs in recent years, as well as the proliferation of efforts by malicious actors to compromise state agencies with ransomware and other cyberattacks. The budget also includes 241,000 ongoing to support a human resources position at the Commission and to distribute toolkits in high schools to help students complete their financial aid applications.

This position will help the Commission better handle additional workload caused by the increase in overall staffing in recent years and fill vacant positions more quickly. Meanwhile, the toolkits are a targeted investment to help high schools as they adapt to state and federal policy changes aimed at getting more students to apply for financial aid. Thank you.

Thank you. Then we will go to the Legislative Analyst.

Thank you. Regarding the proposed augmentations for cybersecurity and human resources, we think these are reasonable and we recommend approving them. We do have some concerns, however, about the proposed funding for the high school toolkits, which comprises 120,000 ongoing of what the Department of Finance has shared. So, to elaborate on the governor's proposal, the toolkits would consist of some printed materials that provide information on and promote awareness of financial aid, for example, resource guides, posters, postcards, notepads, and stickers.

Last year, you may recall, the state provided several augmentations to high schools, pardon me, several augmentations for high school outreach related to financial aid, both to the Commission and on the k 12 side of the budget. And in light of these recent augmentations, it is somewhat difficult to determine what gaps in high school outreach remain. Moreover, we don't know that the proposed approach of sending printed materials is the most effective way to address those remaining gaps on an ongoing basis at this time.

There are also some key details missing from this proposal, such as the number of toolkits that could be supported. So given these concerns, as well as the high threshold for new ongoing spending this year, we recommend rejecting the proposed funding for the toolkits. Thank you.

And one clarifying question before we go to the Commission. You said a certain request was reasonable, but I didn't understand which request you were referring to when you said it was reasonable.

Thank you for the opportunity to clarify. We believe that the cybersecurity proposal is reasonable. We also believe that the portion of the financial aid workload proposal that's dedicated to the human resources position, so that's 121,000 ongoing, is reasonable.

Basically, the Commission asked for 17 positions. Two are recommended and the two are in cybersecurity. Is that the way it is?

There are two positions in cybersecurity and also one position for a human resources position to address financial.

But at least one of the categories that they didn't recommend you believe is reasonable. Is that what I'm gleaning? I'm trying to understand of the total request where you are on it.

I apologize for the confusion. The proposals that we.

It could be mine. Don't apologize for me, keep going.

That we believe are reasonable are all within the subset of, that are included in the Governor's Budget. We haven't assessed the Commission's remaining proposals for additional positions beyond what's in the Governor's Budget, and so we don't have comments on those.

Gotcha. That's helpful. Okay, Jake, now's your time.

Thank you, chair Laird, and I'll be getting into that full request, as you'd imagine. So. Good morning, chair Laird. Subcommitee Members Jake Bremener, Deputy Director for policy and public affairs with the California Student Aid Commission, as you probably surmised in the earlier discussions, really grateful to be with you today and in person for the first time since I've been testifying at this Subcommitee.

Of course, as your agenda notes, the Student Aid Commission has seen our responsibilities really significantly grow over the past several years as the Legislature and the Governor have enacted or expanded programs, as we were just discussing with middle class scholarship, for example. And we've also established new policies like the universal financial aid applications for our high school seniors that was reflected in Budget act in 2021 and AB 469, as our colleague at finance was noting earlier.

And of course, we're thrilled with these new investments and policies and what they're doing for today's students as well as tomorrow's students. But candidly, we at the Student Aid Commission are struggling to keep pace with the administrative and infrastructure standpoint with all of these new programs and initiatives. While several of these new programs that we'll talk about in just a moment have been one time, they have significantly lengthy runways. For example, the learning Aligned employment program.

We'll be talking about that in the oversight item concludes in 2031. The Golden State Teacher grant program, which we'll also be discussing, is currently scheduled to expend its final awards in as late as 2026, at which point we at the Student Aid Commission will still have responsibility for tracking compliance of program participants over an eight year period after 2026. So while these programs came with some additional funding to support Administration, they did not come with adequate, or in some cases, any new staff positions.

Hiring limited term staff to support these programs is inefficient and creates risk in our administrative processes. At the Commission, we can only retain limited term staff for up to 24 months at a time, which will create a revolving door of new hires that we need to recruit onboard and train, only to lose their knowledge and experience in a relatively short time frame.

So while we're very grateful to the Governor and the Administration for their support for the resources that you just heard about in cybersecurity, the one position associated with our workload for the financial aid programs. We don't see that as sufficient to really address the staffing and infrastructure deficits that we have at the Student Aid Commission in the fall. As chair Laird, you were noting we had requested 17 total positions outside of the two for cybersecurity that were really focused on those programmatic workload needs.

These positions are critical to ensuring our successful Administration and promotion of these programs. Without adequate staffing, the Student Aid Commission is unable to as effectively implement these new efforts and engage other partners to leverage these opportunities for students as we could be otherwise. One example of these important partnerships that we're fostering at the Commission is in how we're supporting our local education agencies as they're implementing this new, universal approach to financial aid applications for our high school seniors as the state's financial aid administrator.

Understandably, high schools and districts are coming to us looking for resources and support in promoting financial aid, helping students apply, and equipping their staff to do this work. The Student Aid Commission has seen a demand in the request for assistance that's increased for our training team, our outreach and marketing team, and our data teams, but also requests for resources that counselors on the ground can use to communicate with students. This is why those toolkits that are supported in the governor's proposed budget are so essential.

They're practical assets that help counselors understand financial aid. It's really complicated, as we were speaking to in the earlier conversation about Cal Grant, and it's really essential to helping them promote financial aid workshops and other investments that the state's already supported that help students apply for financial aid. Simply put, financial aid assistance requires prepared individuals that can work with students and families.

We have some great online resources and platforms that are of tremendous value in the districts where they're utilized, and we see that as complementary to the kind of physical materials that counselors can then use to help students understand what they need to do to come prepared and arrive to a workshop ready to apply for aid.

Related to this, we'll also be discussing a one time appropriation that was made in last year's budget around our cash for college program, where we work with local partners, grantees that host these workshops for students. And I can share more at that item about what the impact has been so far. That was a one time appropriation.

This work continues into the next academic year, so we're also requesting that that one time funding be made ongoing so that we can continue doing that work with our local partners. So with that, I'll conclude my comments there and look forward to your questions.

Okay, I'm going to lead off with one question for you, which is, irrespective of the request for positions that are in this budget, how are you doing in filling the positions you got in the previous budget for the expansion?

Yeah, we have filled all, but I think we're down to two of the positions that we received in the last year's budget have already been filled. We've had some turnover with the supervisorial positions over those. So we've wanted to initiate recruitment processes when we have new staff and the management positions that will be working with those two positions that were approved last year but have not yet been filled.

We keep talking about the total 17 that you requested. Do you believe that addresses wherever you feel you were short staffed?

Those are the most essential positions to helping us do this work. In fact, many of those 12 of those positions are already limited term positions at the Student Aid Commission. And go back to this revolving door issue that I cited earlier. So in most instances, what we're trying to do is make sure that the.

12 of the 17 you're requesting.

That's correct.

You're requesting limited term positions.

No, we have them already hired as limited term. What we're trying to do is convert those staff positions into permanent, given the runways on those programs and that some of the other expansions, some of the other policies are in perpetuity. Those are not one.

What is the end of the limited term? Of the 12 positions?

The budget act provided us with some resources we could use to hire those positions in the second half of calendar year 2021. So second half of this year, we're going to start to see several of those positions push up against that 24 month limit that we have on the limited.

They're limited term for 24 months, not related to a budget year.

That's correct. It's from the time of the hire.

So I probably should ask one question that links this all together at the beginning and it's tumbling out separately. If these limited term positions you're trying to convert are allowed to expire, it will decrease your ability to implement the expansions that we have funded.

That's correct. It's going to result in that loss of the experience and the knowledge base of staff who have been working on these programs and in several instances helped us launch and initiate these programs at a time when we're still midstream in those programs.

And I'm kind of surprised because I'm a budget analyst by training and everything is tied to a year. It's not tied to the length of the position. And you make it sound like these positions go for 24 months regardless of where the budget year ends or starts. Is that right?

Yes. We're using some of the funds that were given to us for Administration on the programs to support those positions currently, but we do see a need for those to continue beyond that 24 month period that we have for one limited term hire.

I have a feeling that you want to talk even if I don't ask you a question. So would you like to comment on what he just said about their need for the position and why you didn't recommend continuing these limited term positions?

We don't have any specific remarks. I mean I can answer...

But basically you did not recommend converting these limited term positions and even though we've expanded the programs under the recommendation in the budget, the staffing level will drop. Is that correct? Is.

I would just say that in evaluating all the budget requests for 23-24 and this affects other items. Discuss finance operating in a context of more limited resources relative to previous years due to the revenue situation.

I get that, but it seems to be a clear statement, seems to be necessitated. We're operating in the deficit, we're not converting limited term positions, and we expect that the operations will drop workload wise by the positions we're not allowing to continue in the face of our expansion of these programs.

Can you repeat that?

Well, limited term positions are expiring that are implementing these programs. And your operating thing is there's a budget deficit, so you don't have the money to extend them. But it doesn't seem like there was a clear statement that we're cutting back the administrative ability to administer the programs that we have funded at a higher level for the student aid.

And I think I would appreciate a level of clarity on that because if we're continuing to appropriate the money for student aid and we're cutting down the number of positions that are there to implement it, that should be in our mix of questions to talk about as we move forward in the budget.

I would just say the other things that have been alluded to is that the request for this position, it was submitted on the heels of a pretty large administrative investment at the last budget act in 2022, and also despite a vacancy rate that, at least at the time that the budget is released, is above the statewide average. So in prayer it is that the human resource position that we discussed earlier, the hope was that that person would help to fill some of the vacant positions.

But it also sounds like the number of vacant positions between the time the budget was locked down and now has gone down a bunch.

I would have to add.

Oh, that's what he just testified to. And just because they're having a lot of fun, do you wish to join the fun in any way?

So at this time, we don't have comments in the positions that the Commission has requested beyond what's in the budget, but we would be happy to work with staff to evaluate those down the line if there is interest. Thank you.

I would appreciate that because I gleaned from the answer to the previous question that you opine on what's in the budget, not necessarily on what might have been requested and didn't get in the budget. And yet what was requested is converting existing positions, which makes it a little more relevant for your possible analysis. And I think everybody's going to still answer questions and everybody's going to still talk about this some way.

But to me, as we move forward, I would really like everybody to get on the same page about what the facts are. And if the facts are that there's limited term positions that aren't recommended to continue, I'd like clarity on that rather than this was just a standalone new position request.

And if it's going to lessen our ability to deliver the scholarships for which those positions were assigned to administer, I would like a clear reading on what the lessening of the ability to do those scholarships so that when we get to the point of tying down the budget, we have all those facts in front of us in a way that they actually match. I'll just leave that at that. But do any of the other Senators have any questions or comments on this item? Senator Smallwood-Cuevas.

I would just agree with you, Mr. Chair. I think this is connected to the earlier conversation that we had. We've said in so many of these hearings about the need for teachers, the need for nurses, the need for--right? And so these are robust programs that are helping us not just educate the next generation, but also help us achieve some of the challenges of making sure that we are moving folks into these much needed vocational and occupational gaps.

So we don't want to set up programs for failure by not having the correct level of staffing to ensure that these robust programs move forward. So I look forward to the evaluation and information so that the programs that we are funding have the right workforce to make them happen.

Thank you. I appreciate your comments. Anyone else has a comment or question on this item before we move on? Seeing none. Let me thank the panelists who will be remaining for the next item. So we're going to move on to the Golden State Education and Training Grant Grogram expenditure shift.

And the panel is Department of Finance Devin Mitchell, LAO Lisa Qing, Student Aid Commission Jake Brymner, and I should say before I go to Mr. Mitchell that yesterday, the Subcommitee had a joint hearing, oversight hearing, with the Education Policy Committee on the subject of teacher retention and recruitment. And this came up, and I also sort of announced in that hearing that we were going to be considering this today. So with that, go to Mr. Mitchell.

I want to make sure this is the Golden State Education and Training Grant Program.

Yes, issue three.

So the Golden State Education and Training Grant Program supports Californians who are displaced from employment as a consequence of the Covid-19 pandemic with one time $2,500 grants to access educational or training programs intended to help grant recipients rejoin the workforce. It was established in the 21-22 budget.

Now consistent with estimated program expenditures, the budget assumes that 100 million General Fund previously provided for the Golden State Education and Training Grant Program will instead be spent in 24-25. As outlined in the fiscal plan, 200 million would be expended in fiscal year 24-25, 100 million in 25-26 and 100 million in 26-27. Thank you.

Thank you very much. We'll go to Lisa Qing from the Legislative Analyst Office.

Thank you. Whereas the Governor's Budget proposes to delay funding for this program into the out years, we recommend discontinuing the program at the end of the current year. The main reason for this is that the underlying need for this program has diminished. This program was created a couple of years ago to support workers who were displaced by the Covid-19 pandemic. Since that time, the unemployment rate has decreased significantly and is now comparable to pre-pandemic lows.

Moreover, the labor market has been very favorable for job seekers, such that those who lose their jobs are likely to have options to stay within the labor market rather than returning to school. This is a trend that you've likely heard about in conversations about community college enrollment declines, for example. Related to these trends, the Golden State Education Training Grant Program is serving far fewer recipients than originally intended.

Whereas the original allocation for this program was sufficient to support the full award for 194,000 recipients, as of January, about 5,000 recipients had been paid, so that's about 3% of the intended total. Separate from the Golden State Education and Training Grant Program, displaced workers do also have other options for accessing affordable education and training, including, but not limited to, the ongoing financial aid programs we've discussed earlier in this hearing.

Based on program spending data as of January, we estimate that there would be roughly a 470,000,000 unspent funds by the end of this year. And so if the Legislature were to discontinue the program and remove those unspent funds, that could yield roughly 470,000,000 in one-time savings through 2026-27. Thank you.

Thank you very much. We'll go to Jake at the Student Aid Commission.

The Commission is supportive of the administration's proposed change to the program and believe there are several other modifications that we can make to program eligibility to make the Golden State Education and Training Grant Program an even more valuable asset to the talent pipeline in California. These grants play a valuable role in this space as an additional tool in how we can recruit individuals that might be considering various pathways to re-skilling and to finding a new career.

Unlike the traditional forms of financial aid that our colleague at LAO just spoke to these grants can be used for academic or at training programs that are not currently eligible for federal or state aid, like Cal Grant. These programs include adult education, short term, part time programs at our colleges, and qualifying workforce training programs through the eligible training providers list. I'd also highlight that these grants of $2,500 play an important role in helping individuals cover their expenses outside of tuition or program registration fees.

We heard clearly from partners in the workforce and career training space that it is very difficult to find this kind of financial assistance for individuals, even when these programs are supported by funds that are being provided by our local or regional workforce development boards.

Because this program is so unique relative to other traditional financial aid programs that we administer, the Student Aid Commission wanted to be very thoughtful in how we rolled this out. Last year, based on feedback from national experts, the Commission launched a pilot phase of this program to learn what would work for the target population and to begin to prime our partners at campuses for this new kind of program.

Then this past August, we launched the public facing part of the application, making a skip logic based form available to any potentially eligible individual, whether they've applied for traditional financial aid or whether they have not. Between the pilot phase and the wider availability of the application, we've now received just over 5,500 awards that have been issued, almost 10,000 total applications. And then this past month, we finalized a contract for outreach and marketing on this program to help reach potentially eligible individuals.

This is a very difficult to reach target population as they're not connected to one of our educational institutions or training providers currently. So while we've encumbered the funds for this contract, we've not yet seen how those efforts are going to bear fruit. We're using a network activation approach in which we'll be working with community partners and student ambassadors to help bring this message to potentially eligible individuals.

And of course, as LAO noted, we're relieved that the worst fears of the economic impacts of Covid-19 on the labor market have not been borne out. And as you know, it's actually been a much tighter labor market than we would have anticipated back in 2021, when the Administration developed a proposal for this program. That, of course, impacts the number of eligible individuals for the grant and the Commission's ability to reach them.

As we move past the deepest impacts of Covid-19 and look toward potentially extending the duration of this program, the Commission recommends that we consider making changes to expand eligibility for the grant itself. Specifically, we would recommend broadening access so that any individual who's been displaced from employment, can access these grants without needing to establish a connection to the job loss as a result of the pandemic.

This change could help California position itself for any potential economic challenges that might bear out from the broader uncertainty that you're hearing about in the context of the revenue forecast. So with that, I'll leave my comments there. Thank you.

Great. Thank you. Let me just ask first this time if any of the Committee Members have questions. Senator Min.

Not such a question as a comment. I think we are facing a teacher shortage crisis in this state, and I certainly appreciate this program. One thing I said yesterday at our joint hearing that I just want to reiterate is when I talk to prospective teachers, one big burden that they're looking at is the cost of housing in this state.

So any programs that we can think about going forward that also help with the cost of housing, obviously, getting rid of student loan debt is huge. Any financial incentives are huge. But just given the barriers to actually living in a lot of these communities, I would just encourage you all to think about that as we go forward.

Senator Smallwood-Cuevas.

So I appreciate the effort to really make this opportunity more relevant to the workforce and working students. I think there was a study done by the UCLA Center for the Advancement for Racial Equity at Work that found that in working class communities, particularly in Southern California, when you looked at black working populations, it would be 10 years before that community would economically recover from COVID. So despite the national sort of average in my district, when you look at black unemployment, it is still twice that of whites in the county. So we have a lot of work to do.

I think it is smart to readjust and to really figure out how to reach those hardest hit communities. And I really appreciate the proposal around community partnerships, those community-based organizations that have proximity and credibility with these communities. So I'm curious just what in this pilot, which is exciting to see how it has increased the demand.

What is the sort of geographic and demographic makeup of these partners that you are beginning to build this network around, and what particular sectors? I heard education from my colleague from Orange County, but curious too, where do you see the sectors that would be most impacted by this opportunity?

Thank you, Senator. I'll note that we are just now starting to identify who those community partners are. We just finalized that contract with our outreach partner last month. So we're really excited to get to work with them and really making sure that we cast a wide net across the state and that we have community partners who are mobilized throughout the entire state.

We will certainly be mindful of where we know there is still the deepest impact on employment from the pandemic and other effects that we continue to see bear out now and are doing so, in a way, to the point you just raised, that we recognize for individuals who are out of work, they're not connected to one of our institutions right now. It really is critical that we go to them with a trusted messenger and someone who already has those access points.

So we're being very mindful of that as we work to identify who those partners are. And I'm happy to follow up with you as we progress in that. What I can share now in terms of where we're seeing the individuals who have already applied for this grant, outside of that outreach work, about 88% of them go to a California community college. Another eight and a half percent or so, almost 9% go to a California State University.

And for the most part, the balance of the remaining students are going to a UC program. And again, what I'll note that's unique about this is that these grants, I call it a signing bonus. You get the $2,500 as you enroll into the program. You don't have to wait for some of the typical disbursement practices in financial aid, and it's going toward any of the programs that our public institutions are offering.

So that includes the adult ed, part time, short term programs I mentioned at the colleges, also includes extension centers at our four year universities. We think that's a really valuable opportunity that we're not currently meeting within the existing financial aid programs.

I really appreciate that and the community college being prioritized in those dollars. Having worked with returning citizens who are trying to get into the construction sector, boots and tools, couldn't afford that because it didn't cover those costs. So I appreciate the flexibility of these funds to help folks meet. But I also would love to see the partners that you're building, because in many communities, the traditional networks, folks aren't--maybe their Internet is working, maybe it's not.

Maybe they can't afford to get access to their local paper, right? So they don't have those announcements and advertisements. So how you communicate with those hardest hit communities is really important. And in some ways, it's oftentimes that network. So I would love to see from our office to look and see who are those partners and how are they reaching those communities that are particularly hard to reach when we're still in this deep, deep recovery. So thanks for that.

Other questions or comments? I was just going to say that I had a couple of questions because the LAO had analysis on this and you addressed them in your comments. So I think we're just going to have to keep abreast of this as it moves along. Thank you. We're going to move to issue number four, the Golden State Teacher Grants. Devin Mitchell. There's going to be a switch out at the legislative analysts desk there, and I apologize. Is your name Barochio? Barochio Brocio. Okay. Thank you. I try to do that before the hearing. And then Jake Brymner. So we're going to go to the Department of Finance first.

Thank you. So the Golden State Teacher Grant Program is administered by student and awards up to 20,000 in grant funding to students pursuing a preliminary teaching or pupil personnel services credential. The program was originally intended to draw teacher candidates into high needs fields like science, technology, engineering, mathematics, and special education, among other areas. Applicants must commit to teaching at a high need school for four years under current law.

Golden State Teacher was established in 2019 but expanded in the 21-22 Budget Act when it was supported by 500 million General Fund. Up to 100 million is available each year to be spent or encumbered by June of 2026. At full subscription, the program would Fund around 25,000 new educators.

Eligibility for the program was expanded last fall, removing the requirement to teach in a high needs field and extending the time that participants have to complete the required four years of teaching at a priority school from five years to eight years. As the program became better known and eligibility expanded last fall, removing the requirement to teach in a high needs field and extending the time that participants I'm so sorry.

You're doing fine.

Apologize. Sorry. The Commission has indicated a growth in applicants this year. Golden State Teacher may in fact expend the full appropriation amount in 22-23 and it is possible that enrollment is high enough to expand available resources from 21-22 to issue grants. Still, the Administration believes that additional eligibility changes are warranted.

Our proposed trailer Bill Language as part of the Governor's Budget would, one, make eligible those seeking select early education credentials, two, remove the requirement to serve in a priority school and, three, maintain the four year service obligation at non priority schools while lowering that obligation to three years for priority schools. Given the scale of the teacher shortage across the state and the workforce concerns in early education in particular, our goal with this proposal is to ensure the program approaches full enrollment.

The proposal also seeks to make it easier for applicants to complete their service obligation while still maintaining an incentive to work at schools most in need. Thank you for the opportunity to discuss this issue.

Thank you very much. We'll move to the Legislative Analyst.

Jackie Barocio.

And I think Edgar Cabral is somehow here for backup.

Although I have been in the office for six years, I just recently switched to this assignment, so I am new.

It was not a statement of lack of confidence in any way in your ability, so please continue.

Thank you. Jackie Barocio with the Legislative Analyst Office. As mentioned by the Department of Finance, the Governor's Budget does include trailer Bill Language that would make a series of changes to both the service requirement, but then also eligibility for the Golden State Teachers Grant Program. Overall, we recommend rejecting these proposed changes for the following reasons.

One, when it relates to the expanding or changing the service requirement where students are no longer required to teach at a non priority or at a priority school, but then also reducing, if they still choose to teach at a priority school, reducing the number of years.

We find that those changes overall undermine the primary program objective, being that we want to target these teachers and their service requirements to priority schools, the schools that have been identified as potentially having the highest issue when it comes to teacher shortages.

Additionally, when it comes to the eligibility expansions, as was mentioned, CSEC currently, to the extent that application trends continue as they are looking like today, they may be on track of not only expending the funds earlier than anticipated or how long we've allowed them for the funds to be spent.

So, given that there doesn't seem to be a demand issue, changing the eligibility requirements may not make sense at this time. As it relates to the specific changes of expanding eligibility to include certain child development permits, we find that that specific change is not likely to be an effective way of addressing early educator workforce issues. Specifically, the proposal excludes individuals that may be seeking the more entry level child development permit types.

The only permits that are included within the trailer Bill Language are those that are required of managers, supervisors, and program directors. Additionally, the proposed changes would require that an individual be concurrently enrolled in a bachelor's program, meaning that current teachers who are no longer in college would be excluded from participating in the program.

Thank you. Now we'll move to Jake Brymner, the Student Aid Commissioner.

Given our role as the administrator of the program and responsibility in bringing these resources to eligible participants, I can comment on how these proposed changes may impact that work. However, you'll have other panelists here today who are probably better suited to speak to you about the broader question of the importance of expanding the resources to these professional programs.

We have seen as our colleagues at both DOF and LAO noted a significant increase in the number of individuals seeking these grants as we've gone from year one of implementing the $500 million appropriation and as we've also seen that expansion that Devin noted in terms of individual eligibility for the grants.

So now, at this time, as LAO has noted, we're actually on our current trajectory on pace to fully extinguish the current appropriation sometime in the 2024-25 budget year. If we were to further expand program eligibility as been proposed here, of course, those funds are likely to be exhausted even more quickly. From an implementation perspective, I'll note that each year of this program, there have been changes made through the budget process to amend programmatic eligibility requirements.

This creates two considerations for us at the Student Aid Commission. One is around communications. It's challenging to make this simple for potential grant recipients when there are so many of those ongoing changes, and then, of course, we're going back and notifying our partners about those changes so that they can communicate that as well. The second is that from an implementation and workload perspective, you heard me speak to the staffing challenges at the Student Aid Commission right now.

Each round of changes brings with it a new workload to adjust toward, and that has not been associated. Those changes have not been associated with any consideration for administrative funding or staffing around the program. Additionally, these proposals would significantly expand the number of sites that the Student Aid Commission would need to be prepared to account for and how we assess an individual's compliance with the terms of receiving a grant. This will also expand our workload and responsibilities as we move toward tracking their service contribution.

While this program is one time in nature, you heard me cite this as one of those programs that has a really lengthy runway, currently eight years that we track an individual's compliance after they receive an award. We can be paying out students as late as 2026, which means we really still have another decade of implementation for this program ahead of us.

I'll also note that there are some technical issues that we would need to address should the Legislature and Governor wish to pursue the expansion that's been proposed here. For example, we would need to resolve how the trailer Bill Language asked the Student Aid Commission to view the compliance to program requirements for an individual that changes teaching from a priority school to a non priority school.

So, for example, after two years at a priority school, how many years left do they have at teaching at a nonpriority school? We, of course, stand ready to implement the expansion that's proposed here. But ask that the Governor, the Administration, and Legislature hold in mind these considerations as we identify the necessary resources to carry this out and our collective expectation on the availability of these funds moving forward. Thank you.

Thanks to all three of you. And I'll go to Members' questions in a second. And my one question that I wrote down before the hearing was, when are we going to run out of money and how are we going to handle it? And the running out of money got addressed. You sort of handled, talked about how you would handle it. But let me put a finer point on it. Does it just stop any new grants and you try to administer the existing ones until they end? Is that the status of what happens if we run out of money?

That would essentially be it, Senator. Yeah. We would have no funds to award, but we would still, of course, have that responsibility for tracking program participant compliance with the requirements.

Okay. Questions of Committee Members? Senator Smallwood-Cuevas.

Thank you, Mr. Chair. I wanted to just clarify what, and I know this is again going into forecasting, but the impact on high priority schools. And these schools are high priority because they serve often high numbers of foster youth and homeless youth and youth who are at and below the poverty line. And those overlapping conditions deeply, deeply impact their education achievement. And so to remove the priority, there will be a detrimental impact on those campuses as also shortening the amount of time of this program.

Is there a sense of what in this proposal will offset that hit to those high priority schools? In the conversation we had yesterday, it was clear this is a very popular program, that we see teachers wanting to participate in this program. In fact, there probably needs to be more resources in this program, and that when there's an opportunity to participate, those teachers who are often of color stay in those school districts, again, creating stability and opportunity for those students.

So to me, this seems like a gut punch to these high priority students. So I just want to hear from you what is the way we're going to offset that with these proposed changes in your estimation of administering this? And I don't know if that's an LAO financial department question, and then we'll come back to financial aid. Maybe we'll start with the financial department.

There would still be, under the program, an incentive to teach in a priority school. There would just be a three. The changes are designed to make the program more friendly to applicants and address the concerns they have about completing their service obligation altogether. And so they would still be able to teach, to fulfill their obligation under the grant program to teach for three years at a priority school and four years for any other school.

So it's hard to say exactly what the effect of the changes would be in terms of what the breakdown of where these applicants would teach. I mean, we won't be able to see that for years, right? Because the nature of Golden State is that the people who are in the program are probably just maybe now starting to be placed as actual teachers in schools.

So again, the idea with the changes is to--Finance is very pleased, the Administration is pleased to see that it's at full subscription. But we just want to maintain that, and so that the eligibility expansions are designed with that purpose in mind.

I guess what I'm hearing you say that there is going to be an impact on the high priority schools because that's ultimately what I'm saying is that this change will create an impact, whether it's certainly the number of teachers who will not be in the priority, who will choose to opt out of high priority schools, number one. And number two, those who do, it shortens the length of time of their engagement on that campus through this program.

There is going to be an impact on high priority schools. I guess my question was, have we monetized what that impact will be? Because certainly we are investing in trying to raise and lift the standards of those schools. And if we pull that benefit out, it is going to then, we're going to have a negative financial and educational impact on the other side by limiting the opportunities for having full contribution and investment of these teachers in this high priority space.

So I hear the rationale, but I also am hearing that there is going to be a direct impact and moving us further away from our goal, which is to lift up these high priority schools. But I don't know if the LAO wants to comment and then we'll hear from the.

I think that's one of the basis of our recommendations to reject, is that the primary program objective is focusing on priority schools, and the service requirement attached to that is because these schools, where at least 55% of students are English learners, low income, or are involved in the foster care system, is in an attempt to address disparities when it comes to teacher shortages and how those disparities are higher amongst certain schools. So our recommendation is based off of maintaining the service requirement. That is the initial purpose of the program overall.

Does that complete your question? Thank you. Senator Min.

I wanted to follow up on the same line, I guess. Look, in the absence of budgetary constraints, it makes perfect sense to do what the Administration is proposing, but I'd be interested in hearing the Department of Finance's response, or CSAC's response to the concerns raised by the LAO, and in particular this one line caught my attention, that based on CSAC projections, and this is from the LAO on page 21 of our analysis, based on CSAC's projections, demand likely is sufficient under the current program structure to fully spend grant funds by the expenditure timeline and possibly sooner.

So given the scarcity of funds, does it make sense to essentially divert a lot of funds away from forgetting, like, the exact numbers? I know you don't have that, but just as a 30,000 foot level priority, does it make sense to be moving significant amounts of funds away from priority schools where we need the teachers the most to this program at a time when we're facing a budget shortfall, at a time when, according to LAO, and I presume there's no reason to question this, that we're going to run out of money. Department of Finance, if you could take that?

The fact that it's fully subscribed is good news. It means the program is a success. So I would just say reframe it slightly differently.

It's not a success if we use up all the money outside of the priority schools, right? Because then we're depriving the priority schools of the teachers who need it.

In year one of the program, it was undersubscribed. So these changes were made, and it's different. And as I said, as the program became better known. And then the other key point is there is a teacher shortage at all schools across the state, not just at the priority schools. It's a nationwide problem in many ways.

But it's most acute, right, at the priority schools, which is why there are priority schools, right?

Right.

We sort of heard in our oversight hearing that a lot of people are moving from the priority schools to other schools, creating vacancies when there's a shortage. So that's how they become priority schools. We just heard that.

And I guess just to mean it sounds like unless you have additional things to add, I guess I would just express my concerns with this approach based on the answers I'm hearing. Based on what I'm hearing from all parties here.

I have a sneaking suspicion somebody else from Department of Finance might have a comment.

Yes. Jack Zwald, Department of Finance. I do want to talk about this concept of running out of money. So the way the program is structured is that the intent was to provide, so it was $500 million provided in the program when we created the program. The amount that can be spent in any one fiscal year is limited to $100 million. In the past year. We only spent about half of that allocation in the current year.

I believe what the LAO mentions and is in your agenda refers to expending the money from the past year. So in year three of the program, which is now 2023-24 when these proposed changes would take effect, that applies to that $1 million pool, and then there will be a fourth year, and then there will be a fifth year, and there may be future years beyond that program, beyond that timeline, rather.

And the goal of these changes is to ensure that full subscription to increase the number of teachers entering the profession were large and to address this ongoing teacher shortage. So to say that the money is going to be expended in the budget year and there's going to be this collapse in the program is not the case. And I want to assure the Committee that that is not what's going to be happening in the budget year. There will be additional years of funding and potentially beyond that, depending on what choices are made here in this building.

I guess maybe just, I understand what you're saying. I think what you're saying is the program is successful. It will not collapse. But I don't think that was the point I was making. So maybe I'm not understanding this correctly, but is it right that under the structure of the governor's program, that funds could and likely would be shifted away from priority schools? And at the moment when the funding ran out and was fully used, that there's 500 million gets you only so far, right?

It only gets you so many teachers under this program. So is it right that the governor's proposal here, your proposal, would shift funds away from priority schools?

It's unclear what behavior among participants would be. It is entirely likely that some of those students would choose to not teach at priority school. However, one of the major concerns we've heard from participants is that they are unsure as to whether they can complete their entire service requirement at a priority school, which would then create a financial liability to that participant.

And what we're trying to do here is take that off the table and give our would-be teachers the confidence that they're going to be able to enter this profession and not end up with a bill at the end.

Senator Ochoa-Bogh.

I think I just want to wrap up really quickly the concerns that my colleagues have and what I hear you trying to address. So the Department of Finance is trying to expand the program so it's more readily available to more candidates, have incentivized more teachers to come into the program and be able to be more widely available, whereas my colleagues are concerned that because of those changes, they would be less teachers compelled to stay at a priority school.

But you're saying is that it doesn't necessarily mean that these participants can't stay at those priority schools during those four years. Is that correct?

Our goal here is to ensure that participants have maximum flexibility, that we're able to get more teachers into the profession, that participants have confidence in their ability to complete that service requirement, and nothing precludes any participant from remaining at a prior priority school. What it would do is in the case that position wasn't available, they would still be able to continue to make progress on their service requirement.

Got it. And then the other billing program that. The point that you folks made that I kind of understood is that the program actually has enough money right now. You're not fully utilizing the funds right now, but you foresee that as the program becomes more popular and as the intent is to educate or have a broader outreach, that it will be more fully implemented. But in the short, longer term, it's not at all jeopardized as being available there for future teacher development.

Broadly, yes. So the way it is now, we have reached, or it appears that we will spend the total amount of funding available in the current year.

We don't know what the entire supply of would be educators is, and what this change will do is essentially allow us to reach full or more likely to reach full subscription in each year of this program, because again, there's a shortage of qualified educators across the state, and we want to make sure that we're continuing to have 100% pipeline using that money, getting teachers in the classroom, solving this problem, and not having eligibility criteria that may at this point be sufficient to maintain full subscription in the future as we sort of use the supply of would be teachers as they exit bachelor's degree programs or as they're reskilling from another profession.

We just want to make sure that we're getting this money out the door and getting as many teachers or teacher candidates into preparation as possible.

Senator Smallwood-Cuevas.

There was a conversation that we had last night and it was lifting up LAUSD and know fourth and 8th grade reading levels outperform the rest of the country, places like Florida and Texas. This program was designed to have a win win, meaning we provide resources and teachers come in and throw down in high priority schools. And I think it's these kind of programs that are helping to create the results that we're starting to see in some of our hardest hit districts.

LA USD 80% of the students are at and below the poverty level. If we have the resources, and these are precious resources that we're talking about. They are precious resources. We're talking about how we're going to make sure that we can continue to provide them. We have to ensure that we're putting them in a place where we can have the greatest opportunity to multiply outcomes.

And to me, it is about the teacher shortage as much as it's about making sure that the high priority schools are coming up. This is a program that is meeting two important intersectional challenges, and we too often we don't have programs that address intersectional challenges. And I believe that this is an opportunity for us to prioritize that so that we can continue a trajectory where we see our students who are in high priority schools outperforming the rest of the country.

If we stop this intersectional approach by making these tweaks in midstream, we threaten that opportunity. So I just wanted to share how do we continue to stick with what we came to do, which was to address the intersectional problem, not just one of those problems. So I went there.

Thank you for your comments. Anyone else? I would just say that we have sort of expressed our concerns and what the comments are, and we'll continue to work on this toward the May revise and thank everybody for their participation. We're going to move to issue five, which is a status update on previous budget act investments, in essence, oversight. And we have one panelist, Jake Brymner. Welcome back to the Committee.

Thank you. So I'll start with a few remarks on where we are with the Learning Aligned employment program, which was first funded and initiated back in 2021 with an additional appropriation that was made in last year's budget as outlined in your agenda, which provides a good summary of this program.

This is an innovative approach intended to provide a more career aligned experience in the private nonprofit sectors or on campus research for student participants relative to other campus jobs that are already supported by Fund sources like federal work study. This program also focuses funds on outdoor represented students and on positions that are within STEM based fields, which help us both expand and diversify the talent pipeline into those professions.

Importantly, I'll also note that this was a program funded on a one time basis, but it does have that statutory end date that I mentioned previously of 2031. So it's got a long Runway and allows campuses that participate and receive funds to utilize those funds over that full period towards student wages to differentiate it based on the kind of employment that the student is placed into.

Over the course of the 2122 year, the Student Aid Commission engaged our campus and segment partners, as well as employers and industry partners to assist us in understanding the issues that we needed to address in the program agreement for campuses that wanted to participate and get a share of that funding.

Now, the funds for this program are distributed to public colleges and universities based on the number of Pell grant students they serve as a percentage of all the Pell grant students at colleges and universities that chose to participate in this program. And we're at it's actually, 99% of our institutions said yes and wanted to participate in this program.

But before we could disperse any funds, we needed to know which institutions were going to participate so we could then do that calculation about their share of the Pell grant student population. We also, over the course of designing that program agreement and understanding the involved issues with our campus partners and employers, recognize that these relationships, which do require a formal agreement between the college or University and an outside employer, it takes time to develop those agreements. It's also an additional workload for our campus staff partners.

We heard plenty for them about that you may have as well. Our campuses are permitted to utilize up to 5% of their funding apportionment towards their Administration on the program. And given the significant startup activities, for lack of a better term, required to get this program going, we wanted to ensure that campuses could access the full scope of their funds for Administration on the program early.

So what we did was we took that appropriation, did the calculation based on the 99% of our colleges and universities that are in the program, and then we distributed funds after that appropriation landed to the Student Aid Commission back in, I think it was September this year. So those funds are now out the full $500 million, the portion that goes to our campuses, are with our colleges and universities so that they could begin to implement.

And despite it being so early in the relative lifespan of this program, we're already seeing some really creative partnerships coming, including from our community colleges, working with, particularly healthcare related fields, and we have some examples that we could share of that. So we're excited to see where this program goes and the kind of relationships that are established between our colleges and universities. But we're still relatively early.

We're still really in the first year, which we've indicated to our campuses, was really a build out year to create those relationships. Now, on the cash for college program, you heard me mention this earlier in the context of the universal approach to financial aid applications for our high school seniors, which was adopted back in 21 through legislation and budget action, this investment towards the cash for college program has already shown a real value to our local partners and most importantly, to students.

This year, I'm pleased to share the update on how many of these workshops that we've held across the state we set another record this year for the total number of workshops, over 1400 that have already been registered and completed so far, and we're not done yet.

And this is thanks in part to the funds that we received through this apportionment to establish new entities in regions in the state that did not previously have a grantee that was receiving funds to help do these workshops in those communities. And these numbers are likely a little old, and probably we would have even more if I went back and refreshed them. But 275 more workshops in regions where we established a new partnership.

We also were able to use some of those funds to deepen the support to our partners that were already receiving some funds in other communities. They hosted an additional 200 workshops compared to last year. With that support, we've already utilized over $400,000 of that one time apportionment.

And what we're doing right now is looking at how we take the balance of the unused funds and modify contracts with our current grantees so that they could do more work because of the Legislature and the governor's prioritization of expanding access for aid and the Cal grant program. As we discussed earlier, our community college students have until September 2 to apply for guaranteed financial aid if they meet the income and GPA requirements. That is still really new within the financial aid and the college going world.

So we want to work with our partners to now make sure that we don't just stop after our four year going students hit their financial aid deadline, but we sprint through the finish line, get all the way to September 2, continue hosting workshops that are going to help our community college going students apply for that new financial aid that's available to them.

So that's where these resources will continue to be really critical, as we both administer that requirement for our high schools to help students apply for aid. But also as we think about the opportunity to help more of our community college students apply for financial aid as well, and where we would request that we take that one time appropriation and make that ongoing so the Commission doesn't have to pull back on how we're supporting our local partners to do this work with their educators.

Thank you.

Great. And I just have one question here. You sort of went through it all, but are there any specific implementation challenges you have for either of these two programs?

I think with the Learning Aligned employment program, we certainly recognize that there are challenges for our colleges and universities and finding those employers and working with them to create an agreement. Those are usually the career center on campus. The folks who do CTE on campus and the folks in financial aid, it requires a real partnership between them and really dedicated work to mobilize employers and get them to rally around this. We know that that is happening, though, so I think we're going in a good direction.

And then from the employer side, we know if you're an employer, you think regionally. You don't necessarily think just about that one college in your community. You have probably several that you would like to work with. And I think something we're mindful of is ensuring that our employers get some consistency from their campuses so that rather than having 10 separate types of agreements from all of the neighboring institutions, that ideally we'd like to see a system where there was a more regional approach there.

And there are some efforts that are already underway, including in the Bay Area, actually, to use other Fund sources to help try to foster that regionalism in this approach and make it easy for employers to plug in. And we've been working with partners to try to help foster that and cross promote those opportunities to other communities.

Thank you. Any questions from the Committee?

The only question I had is just on the cash for college and just the overall enrollment work. During the pandemic, there was obviously an exodus of a lot of different student populations, but the group with the most impact were largely black men in the CSU system. And just wanting to get a sense of how are you thinking about the equity involved in these programs to help address that? And we know that leads to the challenges with the graduation initiative of 2025.

So just what's the equity piece? And particularly that group that has seen the deepest sort of erasure from the system, how are we bringing them back in? And then just last question, just on any updates on the faculty negotiation pieces, if there's any updates there in terms of the pay structure.

So I can speak to the cash for college question. We don't have any negotiations with faculty for me to update you on, but on the cash for college piece, I mean, it's such an important part. And how we thought about using this limited pool of funds to really have the most impact.

And what we did was, first, we know that there are some regions in the state that already have organizations getting grant funds from the Student Aid Commission through cash for college, or through our California Student Opportunity and Access program, Cal Soap.

And what we did then was look at the remaining regions and really try to identify where, on a county level, there were the most high schools with the most students and the lowest financial aid completion rates, which are often some of our schools with the most students who would be eligible for financial aid based on their family income, those were the regions that we targeted and we did proactive work to engage a new partner, bring them into this program and work through with them how they could enter into a contract with us to become a grantee.

What we've been doing since then is continuing to track the data and continuing to look at where our high schools are and helping their students apply for aid. Reach out to, we call them the regional coordinating organizations for this cash for college program. Reach out to those organizations to let them know, hey, these high schools still look to be below 40% financial aid completion.

Let's see if we can make sure they know about these workshops and then on the flip side, also inform our county superintendents about these cash for college resources.

And really, there's been a broader effort as we've taken on this new state requirement to really mobilize our local leaders around this and make it a district priority in all communities throughout the state with an eye towards who are the students who are often the least likely to already be to already apply for aid, who are often these community college going students who apply after March 2.

Any further questions or comments? Then we'll want to continue to be kept posted on these two items, but we appreciate you being here today and responding to the questions as well. We're going to move to the last item on our agenda, issue six. It's the UC College of the Law, San Francisco. Our panel will be David Faigman, the Chancellor and the Dean of UC College of the Law. We have Gabriela Chavez from the Department of Finance. We have Ian Klein from the Legislative Analyst Office.

And available for additional details and questions is David Stewart, the Chief Financial Officer at UC College of the Law. So welcome to the Chancellor and Dean.

Thank you. Good afternoon, Chair Laird and Committee Members. It is a great pleasure to be with you today. I'm David Faigman. I'm the Chancellor and Dean at UC Law, San Francisco, and I'm joined today by my CFO, David Stewart. UC Law San Francisco finds itself in a time of great transition, one that provides extraordinary opportunities, but some challenges. To begin, of course, we have a new name, formerly Hastings College of the Law.

We are now College of the Law of San Francisco with our working title, University of California College of the Law at San Francisco. We are indebted to the California Legislature, including in particular Assembly Members James Ramos and Phil Ting, and Senators Scott Wiener, Tom Umberg and Bob Hertzberg for their considerable support through the legislative drafting of AB 1936, which amended the education code to align it with our board of directors' choice of a new name.

AB 1936, in addition to putting our new name in the education code, also identified areas of restorative justice that the college might pursue in collaboration with the tribes of Round Valley as well as other native Californians. We welcome these collaborative opportunities and indeed, many of those outlined in AB 1936 were already part of our outreach to the Round Valley Indian tribes. Additionally, we have been very fortunate to have the state's generous support of our plans to build an academic village in the heart of San Francisco.

The law school is the cornerstone of this academic initiative. The campus received its biggest boost from the state's funding of a new classroom building at 333 Golden Gate Avenue. This allowed us to demolish our old six story classroom building at 198 McAllister, originally built in 1955, which is being replaced by a 14 story building which we completed this fall in which was project financed with a tax free bond offering of $362,000,000.

The new 198 McAllister building will have 656 units of student housing, which we will share primarily with UCSF, but also offers below market rates to UC Berkeley graduate students and San Francisco state graduate students. The housing at 198 McAllister now allows us to undertake a critically needed seismic upgrade and renovate our 27 story residence at 100 McAllister, which was built in 1929. This project was generously supported by the state last year, and we have begun initial work on that project.

This work is essential for the seismic safety of the building and will provide 270 units of academic housing when it is completed. The projects at 198 and 100 McAllister enable us to carry out the vision of the academic village to give multiple universities of California and California State University campuses a footprint in San Francisco. The transitional moment we find ourselves in, however, presents certain challenges as well.

We have been incredibly fortunate to have the California Legislature and governor's office as partners in all that we are doing. In particular, the Governor's Budget this year supports our need to ensure that our staff and faculty are compensated at fair and competitive salaries, especially in this time of modest inflation. In addition, the Governor's Budget provides support for our partnership with Urban Alchemy. As you know, the richly diverse and dynamic tenderloin neighborhood that we're in faces particular challenges that are unmatched by most college campuses.

Urban Alchemy provides an alternative to conventional policing whereby formerly incarcerated individuals are trained as street ambassadors to help ensure the safety and security of the greater UC Law San Francisco community. At the same time, the current budget does not provide any additional sums to support the school's name change that was effectuated by AB 1936. We did receive $885,000 in last year's budget, which was only enough to change the digital footprint of the school.

The budget contained no sums to replace signage on and throughout the buildings or to communicate our new name to prospective employers, prospective students, or the greater regal community. Serranus Hastings committed despicable acts in the 1850s, 20 years before the law school was founded, including providing initial funding from militias that committed atrocities in the Eden and Round Valleys of Northern California. Sarranus Hastings, the first Chief Justice of California, was ultimately reimbursed by the State of California for his outlays to the militias that had massacred native Californians.

Removing the name Hastings from the law school was the right thing to do. However, it would be manifestly unfair to expect our current students' tuition dollars to be spent to remedy the atrocities committed 160 years ago under color of California law. This, in my opinion, is a debt owed by the State of California. We thank the Legislature for supporting the passage of AB 1936.

We hope to work with the Legislature to secure the approximately $1.9 million that it will cost to realize the vision that is encompassed in AB 1936 to remove the name Hastings from one of the great law schools in the state. Thank you for your time and attention, and I welcome the opportunity to answer any questions.

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

Good afternoon Chair and Members. College of the Law, San Francisco is affiliated with the University of California, but is governed by independent board of directors. The college primarily enrolls students.

And is your microphone on? Maybe you need to get a little closer.

The College of the Law, San Francisco primarily enrolls jurist doctor students, but it also offers three law related programs, including a joint health policy and law program with UC San Francisco. The college expects to enroll approximately 1,199 students in the year 23-24 out of which 1,139 will be JD students. The total residence fees for the JD program is suspected to be $48,273. The governance budget includes an increase of 2.2 million ongoing General Fund to support operation costs.

This represents a 3% increase in its space augmentation. The budget also includes an increase of 3 million General Fund over three years to continue supporting a campus safety program known as Urban Alchemy that employs formerly incarcerated individuals and or have experienced homelessness. A technical issue that we would like to clarify in the galley will be corrected during may revision due to the situations that we experienced during the fall and happy to answer any questions. Thank you.

Thank you very much. We'll go to the LAO. Welcome.

Thank you very much, Mr. Chair, Senators. Ian Klein with the Legislative Analyst Office. As noted by the Department of Finance, the Governor's Budget includes 2.2 million in General Funds to support operational costs, as well as 3 million split over three years evenly for the Urban Alchemy Campus safety program. With respect to the 2.2 million General Fund increase, on page 23 and 24 of your agenda, you can find the school's fiscal 23-24 spending plan.

This plan includes core cost increases such as hiring new faculty, as well as salary increases. It also includes lease payments for the new student housing facility. We recommend that the Legislature treat this increase as an upper bound for the school and that this increase could be revisited later in the year should the fiscal condition of the state deteriorate.

With respect to the 3 million in one-time funding to be split over the next three years for the Urban Alchemy program, we note that campus safety is a key part of the school's ongoing operations. This program relies less heavily on traditional methods of policing in favor of safety services. As noted by the Chancellor and Department of Finance, this program also prioritizes the hiring of formerly incarcerated individuals and those who were formerly experiencing homelessness.

In addition to the 3 million that is proposed in the budget, the institution already received 3 million in one-time funding split over three years in the 2021 Budget Act, of which 1 million is still available for fiscal 23-24 we recommend that the school use core funds to pay for the program's ongoing costs. Options exist to fund the program if current core funds are not sufficient, and these would include increasing student fees or tuition.

With respect to the name change, as noted by the chancellor, 885,000 was provided in the previous budget act to help offset the cost of the institution's name change. Additional costs exist, totaling at least 1.4 million. As noted, this is for signage and other issues, and options exist to pay for these remaining costs, and these could include the Legislature providing additional one-time General Fund support. However, campus reserves are available and could be utilized to pay for these costs. Thank you very much, and I'm happy to answer any questions.

Thank you. I'm going to just lead with one question and then go to my Members and thank you again for being here. What's the status of the funding for the name change? Because I believe we appropriated roughly $800,000, and then the cost is about a million more than that. What's the status of that?

So the 885,000 that was allocated in last year's budget has already been encumbered and being spent, and it's only enough to cover the digital footprint, to change all the email addresses, to change the web page, and to change our URL. And so we're contracting with an outside provider to do all of that. So we have no money for signage. So we've took the Hastings name off of the buildings, but we do not have money from resources from the state.

And is that a budget request is not being recommended?

This is a request to the Legislature to augment the.

I know, but usually the Finance Department puts it in. That's my point. Let me ask the Finance Department. Did you not put this in for a reason?

The state is facing a deficit. We are working with limited resources. And given the.

So you acknowledge, this is something we probably need to do, but it's the deficit that kept you from putting it in the budget.

The Department evaluated the cost and the resources that we had, and we provided 885,000.

No, I'm aware of that. He just said that. I'm talking about the million above that. I think I'm just going to get a recording that we have a deficit and that's where we are, and I'll save us all getting the recording. So does the Legislative Analyst have anything you wish to say about this?

I would just reiterate that our recommendation here would be that the institution has campus reserves available and these could be funds that could be used for this purpose.

Okay. Well, we have aired that issue. Are there questions from other Members? Senator Min?

Yes. So first, I just want to echo the comments made by Chair Laird. I appreciate the name change. This is something that's been important in the Legislature, so appreciate your prompt changes there. The name is, it's about as bland as one can get. So good for you, I guess, on that.

And when you're advocating blandness, I just want you to know you're speaking for yourself.

Non offensive. Yeah, I did have a question for you, and it was raised kind of by the LAO. UC College of the Law, San Francisco, do you guys have a shorthand thing?

UCL, UC Law, San Francisco UC Law or UCLA SF.

UC. Okay. UC Law SF. I can do that. UC Law SF is receiving, obviously, you're in an interesting position because you are, unlike the other law schools that are publicly funded in the state, you receive funding directly from the Legislature, about a quarter of your budget. And I did note that according to the LAO, you're receiving the largest percentage increase of any educational institution in our purview. And so I guess I'm just wondering how does your tuition and budget stack up against the other UC law schools?

Thank you for your question. When analyzing a budget as small as Hastings, the relatively small numbers can relate to pretty big percentage increases. So the growth through our workload budget is 3%. And that's been pretty consistent over time. In terms of tuition and fees. I believe that was the second part of your question. We were extremely mindful of the impact of cost on student enrollment, particularly access to the students that we serve.

And so for a period of time, we maintained flat fees, and that was for over a decade. And frankly, we're quite proud of that. It reflected choices that got made. We were able to manage that budget. So our fees currently are below UC average by about 10%. Now, we don't know what their, the regions have a multi year fee plan that sort of prescribes the process by which UC fees are developed.

I have some knowledge of that, but it's not very deep, frankly. In terms of how our budgets stack up. Because we're a standalone, independent entity, we have our own insurance policies. Safety and security is 100% on our cost side. We don't share it with a campus per se. We don't have the benefit of having a financial mothership, which is quite a challenge. I mean, to the legislative analysts indicated our reserve levels being five months. That number to me, strikes me as being low, quite frankly.

I mean, we don't have any recourse to fall back on other than the good graces of the State of California. And sometimes the state can be helpful and sometimes they're not in a position to. So we do manage our budget to our own. We float on our own bottom, and our compensation structure is below that of UC and the staffing professors, yeah, and headcount and dollars. So one of the ways we dealt with our period of fiscal austerity was to suppress cost.

That's what you do when you're in the period of austerity. And so we have slipped behind the UC benchmark in terms of both compensation levels and faculty headcount ladder, faculty headcount. So we developed multi year plans to address these priorities and we execute upon them.

Thank you.

Thank you, Professor Min, any other questions or comments about this budget? Senator Smallwood-Cuevas.

I just had a question, and I'm familiar, even though from LA, I'm familiar with the Tenderloin area, a lot of displacement of communities in that area. And I'm curious about the demographics of your communities that you are serving and employing through the Urban Alchemy project. And also wanted to hear a little bit about the opportunities that it's providing to folks in the community. In terms of this program, is it employment or. Just wanted to get clarification on that.

Thank you, Senator, for the question. I'll start out and I'll let my CFO follow up. So urban alchemy has been a terrific partner to us. I don't know the exact demographics of the community, but they have really integrated with our folks incredibly well. They are fully employed. Urban alchemy is a nonprofit. One of our legal clinics helps serve their legal needs as well. So we are also serving their nonprofit corporate needs, and then they serve our community needs. But David may have additional.

Yes, and in terms of the demographics, just by rough estimate, I would say about 85% are African American males. The majority of these have done, have been under lengthy periods of incarceration, probably in large part due to three strikes, I would imagine. And they tend to be older, but they have been well received, not just by our community, students, faculty and staff, but by the neighbors. They have ingrained themselves into the fabric of our community writ large.

And the success has been so pronounced that the city and County of San Francisco has expanded. They're using the same service delivery model to cover some really difficult areas of mid market. Deeper in the tenderloin, urban alchemy is also moving into Los Angeles as well as Portland. The human touch, I mean, these are individuals who have know, challenges in life made, mistakes are out, they're doing a great job. They truly are a calming influence on streets.

Sometimes when you're trying to navigate a sidewalk and there's a lot of stuff going on, it's daunting. And even if the perception of safety is lacking, you can argue whether safety is lacking, but the perception of safety most definitely is lacking. And this organization stabilizes the situation so that people can just walk down a sidewalk and enjoy or go from point a to point b and feel part of a community.

I would just add that although urban alchemy offers an alternative philosophy and practice to policing, they've also been great partners with SFPD. San Francisco police really have welcomed urban alchemy as well. And they really do collaborate and complement one another.

Thank you for sharing that. Again, it's going back to the win win situation that we're all in search of. So appreciate that update.

Thank you. Any further questions or comments? Yes, Senator Ochoa Bogh.

So it's been noted that both the CSU and the community, the community colleges have seen a drop in enrollment. But I understand your University, your law school, has actually increased by 155 students, I believe, even with an increase since 2012 and 13, with the tuitions that you folks had after a 10 day or 10 year delay, what do you think caused that increase in enrollment in such a significant amount in comparison to other? What could we learn from your example that we could take away to help other schools be able to increase their enrollment like you have?

So thank you, Senator. It's a great question. I've been at UC of law, San Francisco since 1987, so I've seen the ups and downs. So 36 years and prior to 2008, 2009 with the great Recession, I think applications were quite strong, UC and CSU wide. And I think also with the community Colleges 2008, 2009 and really into 20102011 deeply affected the applicant pool. Our applicant pool cut was cut in half during that time, over the last several years. And I think it's a complicated answer.

I do think what was happening in Washington, DC in 2016 contributed to people thinking that law school was a place where they could make a difference going forward. So I think especially in a place like San Francisco and California, there was a sense that there were political and both sides of the aisle political issues that had really come to the fore.

I also think that what is happening in law, and I think that my University of California cousins and relatives would agree that the JD is increasingly being viewed as a platform degree. And so a lot of tech companies are hiring what are called product council. And we've been very big in this space because we are in San Francisco.

And so product council are folks that actually work at the elbow of engineers, software engineers, so that when they create an app that is going to disrupt, whether it's Airbnb or Uber and Lyft, what they're disrupting is not only the technology, but they're disrupting the regulatory framework, or they might have cybersecurity or antitrust issues. And so we've seen is actually a growth in non JD required roles for JD students. And I think that that's been a real strength for us.

And so back to the community college question. We joined as UC Irvine, UCLA and Loyola Los Angeles have been part of the Pathways program, and the Pathways program, of course, I'm sure you're very familiar with it is really dedicated to identifying and empowering, enabling community college students to get to a four year CSU or UC and then find a pathway to law schools. And we were down in Los Angeles, USC for the signing ceremony, and we will be very enthusiastic participants in that program.

And so a lot of what we're doing with our partnerships, we're just taking advantage of our location, our partnerships with UCSF, our partnerships with San Francisco State, our partnerships now with Berkeley graduate programs. And the housing is really going to be housing where we will have medical, pharmacy, dental, nursing students combined with Berkeley graduate students, combined with San Francisco state graduate students. And it's really going to be this organic community where great opportunities will grow.

And that's what we've really been working on is that collaborative and partnership opportunity. Thank you.

I remember having a conversation, I think it was probably two years ago, and was very impressed with the whole outlook and plan. So I just wanted to follow up on your effectiveness in recruiting. So thank you for sharing that.

Thank you.

Any other questions or comments? Then in closing, let me just say when you were in front of us the last two times, these housing projects weren't totally funded or decided, and that is a great thing. And it really, particularly in the urban environment where it's very expensive and the fact that it slops over beyond somewhat is great progress.

I think it's also difficult because you are, and I did talk to a top official of UC who referred to you as a cousin, and I said, well, you better do a family visit sometime soon, that you benefit from being alone because the tuition is lowered, the enrollment is surging, and things are happening that if you were part of UC, we would be trying to harness that, given everything else we're doing in the budget, because we're facing challenges at other branches of higher education and at k through 12.

So anyway, I just appreciate you being here today, and we will look at how all this fits together as we head toward our may revise, which we will be doing without having a clue what the tax revenues are at that time.

Thank you, Senator. I would like to invite any of you that would like to come visit the campus and see the housing. It is really quite spectacular. And so we'd love to host you in San Francisco if you are in town.

And I think you went the entire presentation without reminding us that the Vice President of the United States graduated from your institution.

I will be criticized by my staff.

Yes. Well, I just did it and that maybe we'll see what that happens there. So thank you very much. That concludes the panels part of our session, and we have run a little long. We had an outside time of 130. And so we are going to public comment, and I'm going to try my best to limit public comment to your name, your organization, and a very brief statement of what your position is about the budget item.

And we will take revised and extended comments for anybody that does participate today or doesn't. So let's move to this room, and welcome. Please let us know what's on your mind.

Mr. Chair and Members, Brendan Twohig, on behalf of EdVoice. We very much appreciate the comments from Senators on the Golden State Teacher Grant Program. We absolutely encourage the Committee to keep the program's focus on addressing the inequitable impact that the teacher shortage has on high-need schools. And I would say that eliminating the four-year requirement and opening it up to all schools will likely result in--

The outcome will be that many grant recipients will pursue roles in non-high-need schools, in essence, shifting funding for the program away from high-need schools to higher income schools, just as Members have noted and others. And this fundamentally changes the goal of the program. So any expansion of program eligibility should be limited to applicants who commit to serving high-need schools. Period. Thank you, Mr. Chairman and Members.

I've noted that everybody that remains in the hearing room either works for the Senate, the Department of Finance, Legislative Analysts. So I'm going to assume none of them have further comments. Thank you very much. And now we'll move to the moderator. Moderator, thank you for patiently waiting. We're ready to take public comment, and we're hoping to limit it, and once you queue everybody up, please tell us how many people are in line.

Absolutely, Mr. Chair. If you wish to ask a question or make a comment, please press one and then zero on your telephone keypad. You may withdraw your comment at any time by repeating the one zero command. If you're using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a comment, you may press one and then zero at this time. And at this point, Mr. Chair, we have five queued up, and the first comment will come from line number 23. Your line is now open.

Welcome to the Committee.

Good afternoon. Good afternoon, Chair and Committee. This is Zachariah Wooden, Vice President of Legislative Affairs with the Student Senate for California Community Colleges, the official voice for more than 1.8 million community college students. I'm just here to say that we strongly support the full implementation of Cal Grant Reform.

The data shows that community college students are most in need for financial aid, not for tuition, which is most affordable in the state, but for the rising cost of living in their own communities, including access to housing, food, transportation, broadband and technology, all of which are contributors to total cost of attendance for community college students that will be addressed by the Cal Grant Reforms implementation. So we thank you for your appreciation. We thank you for your consideration of the issue, but community college students need Cal Grant Reform sooner, much rather than later. Thank you.

Thank you very much. Moderator, next caller.

The next comment is from line 27.

Good afternoon, Mr. Chair. My name is Parshan, the Policy Director for uAspire, here to speak today on behalf of a coalition letter that we submitted also in writing, as the AB 469 implementation coalition. In it, we had a number of priorities, but I'll just focus due to time on the main one, which is we would like to elevate the CSAC budget for the staffing for 2.6 million dollars so that they could properly implement AB 469.

We've seen some really, really good trends and data coming out as far as California's improvement, and this investment will be really, really necessary to see that come to fruition in its full length. Thank you very much, and we look forward to engaging with you and the consultants.

Thank you very much. Moderator, next caller.

The next comment is from line 37.

Thank you and good afternoon, Chair Laird. Joshua Hagen with the Campaign for College Opportunity, providing comment to share our gratitude for your years of continued commitment to comprehensive financial aid reform and expansion in California, and to respectfully ask that the Committee consider prioritizing funding to implement the Cal Grant Equity Framework in your multiyear budget planning. We recently published a report examining troubling declines in enrollment at community colleges and outlining promising practices to improve student enrollment and retention.

We'll be following up in the coming months with a subsequent report looking at enrollment declines at the CSU system, but what those enrollment patterns clearly show is that we need to have an urgent and long-term strategy that brings students back to our colleges and provides them with the necessary supports to remain enrolled. Funding the Cal Grant Equity Framework is one of the most high impact enrollment and persistent strategies that we can offer.

This would allow adult learners to more easily re-enroll in college and provide desperately needed financial aid to over 150,000 additional of our lowest income students, the majority of whom--

If you could please begin to wrap up. Thank you.

That's it. Thank you for your--

And we have three more in queue, Mr. Chair. The next comment is from line 36.

Good afternoon, Chair Laird and Committee Members. Manny Rodriguez, on behalf the Institute for College Access and Success, also known as TICAS. Just straight to the point. We respectfully recommend that the Legislature keep their promise to current and future students, especially our lowest income students, and prioritize Cal Grant Reform. When you look at that reform and that investment in comparison to other options, it prioritizes students with the highest need. It includes community college students.

It will grow the Access award, which addresses non-tuition costs by tying it to CPI, and it removes final access barriers. Next, we align our support with uAspire and Parshan previously on additional staffing support for CSAC, as they're playing a key role in a universal class of completion across the states. Thank you very much.

Thank you very much. Moderator, next caller.

The next comment is from line 39.

Good afternoon. My name is Michelle Andrews, and I'm the Government Relations Chair of the UC Student Association and a student at UC Davis. UCSA is urging the Legislature to fully fund the Cal Grant this year, rather than allowing it to fall by the wayside in favor of one-time funding for the Middle-Class Scholarship. Cal Grant targets and reaches the most vulnerable students who need aid the most, and these students need to be prioritized.

We're urging you to follow through on the promises made to students with last year's passing of the Cal Grant Equity Framework, and this should be treated as one of the most urgent priorities for this year's budget. Thank you.

Thank you very much. Moderator, next caller.

And the last comment is from line number 40.

Good afternoon. Kimberly Sanchez with NextGen California. We echo the comments made earlier from other coalition members. We'll just emphasize our continued strong support and respectfully request the Legislator prioritize funding to move forward with the implementation of Cal Grant Reform. Thank you.

Thank you very much, and Moderator, thank you very much for patiently waiting to the end to do this and for your assistance today. And let me thank all the individuals who participated in the public testimony today and in the hearing. If you were not able to testify today, please submit your comments or suggestions in writing to the Budget and Fiscal Review Committee or visit our website. Your comments and suggestions are important, and we want to make sure your testimony is in the official hearing records.

Thanks to everyone for their patience and cooperation. We've concluded the agenda for today's hearing. The Senate Budget Subcommittee One on Education stands adjourned.