Assembly Budget Subcommittee No. 3 on Education Finance

Obviously, as we've seen in the published report from the Community College League of California survey of 66,000 students, we've identified the need is great among our community college students, particularly with food insecurity and housing insecurity. With a large percentage of students. The colleges serve about 2 million students, and that means that we have a lot of needs in the state. However, we've all seen the budget projections.

So today we will have those difficult conversations that we've been having about how to support students in this system while also facing a major budget deficit. Depending on the May revise and we will know in a couple of weeks here, Proposition 98 funding levels may require us to make cuts or perhaps forgolas, or to make other more difficult decisions and take difficult actions.

So I hope that today, like we've done at our other hearings, our other systems, we have an honest conversation about what is happening in our community college system, how to weather the next few years of bad budgets as are projected, and come together with solutions and ideas on how to move forward. I'm looking forward to specifically your solutions and your suggestions. I also hope today that we'll take a look at the student centered funding formula.

It's been six years since the new formula and it's, I would say, difficult to determine how it's functioning. Major enrollment declines have meant that more than half of the districts are not really on the formula, and we need to understand how this will change during the next few years, particularly as the hold harmless provisions change in 2526. And as we see some colleges actually, and like we're here or listen to today, have had some growth. So we've got the whole plethora of scenarios to review.

We need to make sure that districts are incentivized and rewarded for providing access and for serving their communities in the best ways possible. Which is why we'll also be discussing the nursing initiatives that is in proposed budget and how we can expand nursing programs in the state to address the shortages and increase the diversity of the healthcare workforce and really identify what that workforce is. I hope to get into that discussion today as well.

We will spend some time looking at the past investments of previously approved programs. And that includes Calbright College, as we have done again with UC and CSU. This is an important oversight as we consider how to handle this budget deficit. So with that, we've been doing something at the Committee. We've been offering people the opportunity to speak public, comment early rather than at the end.

And so if anybody would like to make an abbreviated comment now, as opposed to waiting till the end, you're welcome to do so. It also, I feel, helps us shape our conversation, our discussions, and our questions. So I invite anybody who'd like to make an abbreviated comment around 30 seconds. This would be a good time to do so. Go ahead. Please remember to state your name.

Chair Alvarez. Members David Hawkins with the California Community College Independent Faculty Union. Two issues we do ask that you consider extending for one year the hold harmless provisions while we're reviewing SCFF and with the funding formula, we would very much welcome an extensive review and the implications.

Thank you. Thank you. Thank you for setting the tone. Brief comments.

Hello My name is Anya Elder, and I represent the Calbright Classified Employees as the union President for Chapter 53. Calbright was created exactly for the times that we're in today. And, in fact, I strongly believe that this really is our moment. Our economy, our workforce, it's rapidly changing. With unemployment growing in the state and with us staring at the fourth industrial revolution, irreversibly changing the nature of our work and education. The funding at Calbright that we currently have is needed to really be able to meet this moment.

Thank you. Thank you. Appreciate your abbreviated and concise comments.

Good morning. Michelle Mckay Underwood, on behalf of the Association of California Community College administrators. So, two major points. One, we support the governor's approach to sort of minimize harm through the Proposition 98 maneuver. So we know that's not on the agenda today, but it's very important for the structure moving forward. And second, really want to elevate the student nursing proposal.

We know that we can do this in the most cost efficient way, and that'll send nurses out into the field where they don't have to think about the crippling level of debt and they can do the most good, as opposed to just being able to pay off their debt. Thank you.

Hello. My name is Michael Stewart, and I'm the academic center President at Calbright College. And I'm here today to advocate for continued investment in Calbright's college, which is quite literally changing the lives of California's most vulnerable and underserved students. As someone who has personally written letters of recommendations for calvites graduates. I have witnessed firsthand the transformation, transformative power of this, this innovative, skill based college. Many of these students were once left behind by the traditional education system. Thank you, sir. Sorry.

If you make early comments, we're making them more abbreviated. You're welcome to stay afterwards to make a longer statement. Thank you. Thank you.

Anna Matthews with the Faculty Association of California Community Colleges. Looking forward to discussing the student centered funding formula today and the ways in which it fails to meet the needs of our California community colleges. Thank you.

Thank you. All right. With that, we'll begin with our first. And again, there'll be public testimony at the end. You'll have a little bit more time at the end if you wish to make a longer statement, but appreciate helping us focus on some of the discussion that we're having today. And the first one is the student centered funding formula review and apportionment proposal.

So if I can ask the panelists that we've invited to please join us, Gregory Smith, chancellor from San Diego Community College District, Tawny Dotson, from Yuba College, and Mario Rodriguez, vice chancellor from Los Rios Community College District. And if you have your preferred order of speaking, go right ahead. Otherwise, Mister Smith, you can go first.

Good morning. Chair Alvarez, Members of the Committee, thank you so much for the opportunity to be here with you. I want to address some of the questions that I saw in the materials for the meeting, starting with the strengths and weaknesses of the SCIF. I think that most people would agree that the idea of aligning funding where student need is and having some incentives for success is something we should be thinking about. The challenges that the SCIF implemented, though, is the way that it operated.

In 2018, the base funding for our credit students was cut by a little over 26%, and now we have to earn that funding back through the supplemental allocation, which relies on qualification for financial aid, and through that success metric. The financial aid piece is the biggest challenge for larger urban high cost of living areas.

So from 2018 to 2022, the median salary in San Diego increased from about 75,000 per household to just shy of 100,000, which is good news, but has not kept up with the cost of real estate increases, inflation in that area.

So when you make that much money in your household, you're not going to qualify for a Pell grant or the California Promise grant, even though your housing needs, transportation, and food needs may be greater than somebody making half as much in a lower cost, more rural part of the state so the student doesn't get the financial resources, and then our district doesn't get that additional funding.

As a result of the SCIF last year we received $292 million in funding to serve about 37,000 full time equivalent students. Under the old formula, we would have had over 307 million for that same number of students. And so you can see how it has reallocated resources in our system disproportionately away from high cost of living.

So I think a tweak that would be significant would be to change the eligibility on the supplemental metric so that students with a household income that exceeds Pell eligibility but still doesn't cover basic needs qualifies for additional funding. So we can provide that.

And I think the final thing I would say on this is one of the illogical components of the skiff to a degree is that having that funding tied to student financial need ostensibly would mean that we're getting more resources to help students with their basic needs needs, but that funding is subject to the 50% law. So we lost apportionment for credit enrollment that we were meant to then be redirecting towards serving basic needs.

But half those Fund, those funds have to go back into the classroom, so it doesn't allow us to address housing, food and transportation and security. So as we look at the possibility of cuts, deferrals, sweeping funds from prior years, where that will hit hardest, will be on the basic need supports that we provide students. It's going to be the persistence part, not so much access.

We can still offer the classes, but the students who need additional supports to show up to those classes, that's going to be the heaviest impact. So, as we've offered before, if the conversation does need to include deferrals and cuts, please let us be partners in helping to identify funds that would have the least amount of impact on the students with the greatest need.

Good morning.

Thank you. I'm so sorry. Good morning. My name is Doctor Tawny Dotson. I want to start by just thanking you for the opportunity to be here today and provide a perspective that is from a rural, small to mid sized community college. I certainly also want to thank you for the work that you're doing to provide us with the kind of stability and predictability that's important in order for us to continue to provide the outcomes that you are looking for from our work.

I want to share that my perspective today is not just as a rural community college, but I've served in two other states as an educator, Oklahoma and Washington. Notably, Washington has the student achievement initiative allocation model that is focused on student outcome metrics as well. And so I've worked in multiple systems that have implemented that successfully.

Yuba College and the Yuba Community College District fared well when the SCIF was implemented, largely because some of the demographics that we serve, we have the highest pill rate eligibility in our region. Our community that we serve in Yuba, Sutter, placer and Butte counties is amongst the lower socioeconomic status in the state. We have a high majority students of color, high majority of students who are parents, first time generation students, et cetera.

We also have an agricultural based community that we serve and so we have a high CTE portfolio amongst our academic programs. And so a lot of the student success metrics that you all have implemented in this GIF we are successful at because that's the work that we do to make a difference for our students overall.

Unfortunately, during COVID those are some of the students that were this most significantly impacted by the mitigation things that we put in place for COVID-19 and many of them had to put a pause on their educational journey in order to be the breadwinners for their family or to navigate some of the impacts that were there. As we have tried to recover from the COVID-19 impacts on our enrollment and we're doing that well, we've seen a 14% year over year increase in our enrollment.

Strategic about how we do that. We believe that this gift sends us a message from you all on what it is you want for us to focus on, and we've used that as we've implemented initiatives and strategies to recover. An example is we focused on completion for students who had to take those pauses using things like our herf and COVID-19 block grant funding to incentivize them to return to school, and it's been successful for our organization as a whole.

In fact, in the 22-23 year we saw a 24% increase in completions, more than 200 associate degrees than we would have expected, and more than 500 more certificates, which was a 266% increase. We continue to see the student success allocation model provide us with support in focusing on those students who need it most in our community.

As we move forward, we certainly believe that it provides us with the stability and predictability that we need in order to focus and have clarity on equitable outcomes moving forward. I would caution us on making changes without ensuring that educators and practitioners have an opportunity to participate in the design without testing and modeling those impacts, because changes to it can be widespread and long term and we certainly want to make good decisions so that we can continue to see success moving forward. Thank you again for the opportunity to be here and to be a thought partner today.

Thank you.

Chair Alvarez, Members of the Committee, my name is Mario Rodriguez. I'm the Executive vice chancellor of Los Rios Community College District right here in Sacramento. So before I lead into the comments, which are going to be primarily focused on the agendas, page 11, the top two paragraphs, which represent the concerns of districts like ours that are growing and restoring pretty rapidly, give you some context, maybe, about Sacramento. So Sacramento last year was the largest serving MSA in the states.

It's been competing with Fresno and Bakersfield for the last about decade. We're the number one county in the state for the Bay Area people that are leaving the Bay Area in search of more affordable housing. Over the past decade, we've seen over a 10% increase of high school students in our Sacramento county. So that, coupled with the reforms we're doing on our campus, a lot of times with the support, support of this Committee and this Legislature, we've been strong implementers in placing our students appropriately.

We have really heard the call from our current chancellor, Chancellor Christian. Pre pandemic, we only about 2% of the FTS we served was from high school students through dual enrollment. Right now it's at 5%, and we have plans over the next few years to get to about 10%. We have one of our institutions that is over 70% of the credit instruction being taught with open educational resources, meaning free textbooks, which is a huge barrier for our students.

The other three colleges in our district are over one third. So we're doing all the work. We have all the students that are coming, and what we're seeing in this formula is there's an inequitable allocation of districts like ours that are restoring and possibly growing. You know, this summer year over year, we're looking at a 20% increase in full time equivalent students already. And that's on a base of a restaurant of a full, fully restored summer.

Already this year we've seen a 15% increase in our Pell grant students. So the students are there. The question is going to be that in the most recent years, the state's been able to do both things, support districts like ours that are restoring and growing and maintain these really long term, hold harmless provisions that are in the current law right now. And the question for us is, that's great.

We love that idea when there's enough money, but in a time like we're seeing, probably coming our way. Pretty soon here, we're going to have them start making trade offs. That's going to be the question, I think, from places like Los Rios, districts that are fully restored and near growing our desires as a state, prioritize and recognize that there has been a shift in demographics in California. Places in the valley that have a little bit cheaper housing prices are going to be capturing those students.

Urban districts like ours as well. So we would just ask that the state consider that. And I think President Dotson's comments about thoughtful and planned implementation of whatever changes, I just want to echo that as well. I think that's key. Sometimes things happen at the very last minute and then we have the past budgets a few weeks later and it's kind of hard for us all to adjust. So modeling and being thoughtful about whatever changes are made, we'd echo that comment as well. Thank you.

Thank you. I have some questions, but we have another panel on this specific issue. But to my colleagues, do you have any maybe clarifying questions for this panel, or would you want to wait till we have the other panel? Wait. Okay. We'll probably ask you to come back here after our panel. The next panel, I think questions will be directed at both of you. So if I could have the Department of Finance Legislative Analyst Office and the California Community College Chancellor's office come forward, please. Why don't we start with Department of Finance and then do the LAO and then the chancellor's office. Welcome.

Thank you. Good morning, chair and Members. My name is Justin Hurst with the Department of Finance and I'll be covering the California Community Colleges Proposition 98 investments that were included at the Governor's Budget. The next time that these investments will be updated will be during the May revision process. Much like the k 12 system, the California community colleges are supported by the Proposition 98 General Fund investments.

These investments reflect continued support for the system's multi year roadmap, which focuses on equity, student success, and enhancing the system's ability to prepare students for California's future. The Proposition 98 investments for the community colleges included at the 2024 Governor's Budget include the following programs. The first investment is a cost of living adjustment of 0.76% in the amount of $69.1 million for apportionments accomplished through the student centered funding formula.

This adjustment is important for sustaining the support provided to community college districts that is consistent with increased cost pressures in education delivery. There is similarly a cost of living adjustment, also at the same rate of 0.76% in an amount of $9.3 million to support categorical programs and the adult education program. Included with the Governor's Budget is also support for a 0.5% enrollment growth in the amount of $29.6 million.

This is a technical investment that will enable districts to grow their full time equivalent student numbers when a district is experiencing increasing enrollment and then finally to adjust to changes in the Proposition 98 guarantee while continuing to provide stability to the community college system. The Governor's Budget utilizes the Proposition 98 rainy day Fund, otherwise known as the public school System Stabilization account, to provide these investments and mitigate harm to community college districts.

The funds withdrawn from this account will be used to backfill the reductions incurred by adjustments to the Proposition 98 guarantee in the current year, as well as support the student centered funding formula in the budget year. The community colleges portion of the total proposed Proposition 98 withdrawal amounts come to 235.9 million in the current year and 486.2 million in the budget year. That concludes my overview of the fiscal picture for the community college system. I'm happy to answer any questions that you may have at the appropriate time.

Thank you. The Lao's office, please.

Good morning, Paul. Good morning. Paul Steenhausen with the Legislative Analyst's office. Last month you heard a discussion about enrollment, so my comments will focus on apportionments, cost of living adjustment another issue that wanted to call to your attention. As your agenda notes, community colleges do face a number of cost pressures in the budget year. Inflation isn't as high as it's been in the last few years, but it's still above the historical average.

As a result, districts are likely going to continue facing pressure to provide employees with salary increases. Colleges face other cost pressures, including pensions, healthcare premiums, equipment supplies and other costs. We're the state in a better fiscal condition. Our office likely would recommend to you to Fund the cost of living adjustment as proposed in the Governor's Budget. As it is, though, even under the governor's own revenue estimates in January, the state has insufficient funds to cover these apportionment costs in the budget year.

And you just heard the Department of Finance acknowledge that the Governor proposes to use $78 million in Reserve money, one time Reserve, to Fund apportionment costs for a cost of lieu and adjustment for apportionments in certain categorical programs. And historically, the state has not used one time reserves to Fund ongoing costs. The cost of living adjustment is an ongoing cost, after all.

Doing so adds to the size of the budget problem that you face this year and makes balancing the budget in future years even more difficult. So we recommend the Legislature reject the proposal. Revisit the ability to Fund a cost of living adjustment next year, depending on the budget situation.

And I did want to call your attention to an issue in your agenda related to apportionments that's not in the Governor's Budget, as you heard from the first panel, as you can see in the agenda, there's a number of components to the student centered funding formula, including enrollment and supplemental counts. You heard about Low income counts? The state generally specifies which year these enrollments and student counts are to be reported for purposes of the chancellor's office calculating how much funding is owed to districts.

The community college regulations do contain a loophole, however, that allows colleges to report two summers worth of Enrollment in the same fiscal year. Now, ordinarily, in the last few years. Doing so by a college does not create a significant bump in their funding level. But due to a number of funding protections described in your agenda, districts do have a strong incentive to report two summers' worth of Enrollment in either 2023-24 or 2024-25.

And that would result in additional costs for the state to Fund the student Senate funding formula starting next year and for several years afterward. And these are costs that are not accounted for in the Governor's Budget. So given the state's projected budget deficits, we think this is a particularly bad time to be raising apportionment costs and potentially redistributing limited funds to districts that take advantage of this loophole.

You just heard from the speaker, the last speaker on the previous panel, talk about all the funding protections that really are limiting the amount of money that's available to growing districts. And this is an example with this summer loophole, allowing colleges to count two summers worth of enrollment in the same year distorts enrollment data as well.

So the Legislature really doesn't really know what enrollment is one year or the next, because it could be the districts are just counting two summers worth of enrollment in one year, shifting it to the next. So we recommend the Legislature close this summer loophole as part of the June 24 budget. Specify in statute summer enrollment is to be reported only once in each fiscal year.

You can't double up, and it would mean that summer 2024 enrollment would be counted counted only in the 2024 to 25 fiscal year, which would align summer enrollment with the timing of other components of the student centered Fund and formula and eliminate a loophole that otherwise would drive up apportionment costs over the next few years. So thank you and happy to take any questions.

Thank you. Welcome.

Good morning. Chair Alvarez and Subcommitee Members, I'm Wrenna Finche. I serve as California Community College's Vice Chancellor of College Finance facilities. Appreciate the opportunity to share some information with you at today's hearing. And again, I want to just express that community colleges are very thankful and appreciative of the stability and the predictability in funding that was provided in the Governor's Budget. And I'm confident that we can find a really a good path forward despite our revenue shortfalls.

I first want to start by echoing some of the comments of our colleagues in the field you just heard earlier about, you know, the strengths and weaknesses of the student centered funding formula. It's really, the SCFF has really been a sea change for how our system thinks.

It really signals the priorities of both Governor and the Legislature in keeping all of our decisions with students at the center of all our design, planning, strategy, and decision making and really removing some of the barriers and then providing those incentives to doing the right thing for our students. Because the formula was implemented not very long ago, really just in 2018, with a wonderful worldwide pandemic, kind of to throw off all of our data.

You know, we do think it's a little soon to make any final judgments or, you know, make strong conclusions from the student centered funding formula and that any considerations of how we can adjust it to improve it really should be thoughtful, should be done over time, should be done with modeling, and done with a lot of input from our stakeholder groups and our college leaders, particularly also the summer shift tool that we have available to us in legislation.

It's really part of a longer term decision making process. I want to tell you a little bit about where our districts are at coming into this year. In 2022-23 the statewide average of unrestricted operating expenditures for salaries and benefits. Salaries, wages and benefits was about 88% for our system. So that leaves only about 12% available to cover other operational cost increases, rapidly rising utility costs, building maintenance and upgrades, and essential student services, many over the last couple of years because of our large COLAs.

Many local collective bargaining agreements reflect ongoing salary and wage increases based on those very rosy COLAs, which places permanent, ongoing cost pressures on our districts, you know, which will worsen as if state funding is to decline. So right now, it's very important for all of our districts to be very carefully reviewing their multi year projections for revenues and expenses and gearing up to whether any potential deferrals that may come down as they have in other years and other funding adjustments.

I want to talk again a little bit more about the summer shift tool. It's really a financial planning tool that's been long established in statute. It predates the student centered funding formula and it was reaffirmed and continued in statute by the Legislature when the student centered funding formula was established. Districts rely on this for multi year planning.

So any changes to this really need to be designed to take effect in out years so that districts can have the time to react appropriately and change their long term planning in your agenda. There's language suggesting that districts might be generating up to 20% of their fts during the summer months, subject to the summer shift.

So we don't collect specific data on this, but I can share with you anecdotally that when I've talked to leaders from the Association of Chief Business officials, those leaders, most of them were saying they're not even using Summershift, and that it's really more like a three to 5% amount of fts that we're looking at.

So, you know, I realize that's anecdotal, but it just speaks to how this really needs to be something that's thoughtful long term, with some time put into time and modeling put into it, behind it. So with that, I just, you know, I'm happy to take questions as you have them and really appreciative for the funding that we've been provided.

Thank you. Thank you all. I think I'll ask the first panel to join maybe two seats here, maybe if the LAO want to jump up to the dais here so we have enough seats. Thank you.

I'll ask Mr. Fong to kick us off, first set of questions.

Thank you so much, Chair Alvarez, and thank you so much to all the panelists for the insights and updates regarding apportionment and the Student Centered Funding Formula. This question is for the Chancellor's Office. What has been an impact of the Student Centered Funding Formula? Have we been able to make assessments, given that districts have been held harmless since the enactment of the funding formula?

And then also when we look at the student success outcomes, the different metrics, have we been able to collect that data, and how does that impact the success of students going forward?

Yeah, thank you for that question. So, as I mentioned earlier, the impact is really in how we think about serving our students. We really have put them at the center for all of those success outcomes. Thinking about how we change our operations in order to, you know, to ensure that we're getting students in the door, which you can't have a successful outcome until they're in the door.

We're doing everything we can to get them those, get them the financial aid they deserve, support their basic needs, and make sure they make it to those successful outcomes. Some of the examples of things that colleges have, are doing is being very careful about updating their cost of attendance every year. That's the cost of attendance is the figure that can determine how much federal financial aid a student is eligible for. Another area that colleges are really making strides is around student centered course scheduling.

Really thinking about when students need these courses and in what modality, whether it's an online, hybrid, or in person. We've also put a lot of thinking into what are the basic needs support specifically that students need. And, you know, you'll see that we're really focused in on mental health, on CalFresh availability, on rapid rehousing, on affordable student housing program. You know, so many, just thinking about the student as a whole person and what they need to actually make it to the finish line.

That thinking is the ultimate. As far as the metrics, I'm also very glad you asked that. We have a really great tool on our website that's called the Analysis and Counts of Patterns Across the SCFF. And that will show you, for each metric and either by a district or by statewide or a comparison, a three year trend of every metric, where it's been going, and then also the amount of funding received for that metric.

So you can take a look at that and really see where... It's in a nice visual dashboard, so you can see where districts are doing really well, where have they been making gains, and how can they double down on that. And then you can also see where they're flat or where they've been declining by each individual metric. And so they can see where they can put additional effort. That's also, for our success outcomes, it's also brought broken out by race and ethnicity.

So we have that equity component to that analysis as well. You know, we do see that overall it's, you know, kind of mixed across the state, but it's a new formula, and our way of thinking around it, I think, is going to see long term success for the Student Centered Funding Formula.

Thank you. And then in terms of the context of urban versus rural districts, how has the Student Centered Funding Formula impacted that?

Right. So I think, you know, you heard the point earlier that some of our districts are in much higher cost areas, and that is true. You know, it's a lot cheaper to get an apartment, say, in Chico, California, than it's going to be in San Diego. Right. So your cost of living is different. What we definitely encourage, as I mentioned earlier, is making sure your cost of attendance, your official cost of attendance, is updated so you can draw down as much federal financial aid.

But we do see that, you know, certain regions and certain districts are clearly easily more identifiable as regions of high need based on their cost of living. And, you know, more students show up as being in the poverty level there.

And in terms of the success formula, I know when we looked at page three, it said 11%. When the Student Centered Funding Formula was first originated and thought of, what was that goal?

We started out with 70-20-10.

Correct.

Yeah. And so, but that was to set the rates. And so once the rates were set for every individual metric, we've really just been applying the COLA to the rate itself, and then districts have the incentive to earn all across those metrics.

So in terms of the supplemental then, when we look at the 14.9%, is that something that we can see going forward? We know that's based on low income student enrollment, but that's something that I think will be a fix for the high cost in high cost living areas.

It's definitely something to look at. Again, we'd want to see some long term modeling and be able to run projections on it before we make final decisions.

Okay, thank you. And thank you for the context that the student success metrics are on the website. I'll take a look at that. And I know you put that in the page three as well, but I think that's, when we look at the different college districts up and down the state, I think in terms of the certificate outcomes, the transfers, the completion of transfer level courses, the metrics are being critical in terms of how this formula has impacted student success.

So I think really going forward, taking a deeper dive and really looking at the areas that have really impacted different districts that have really had the successful modeling on this and how we can continue to spread that across the state. So I really would love to see some additional analysis and data around that. Thank you, Mr. Chair.

Thank you. Let me ask a few questions, and they're going to be a little bit all over the board. So apologize, but I take notes, and questions come up. On this issue of the different regions have different costs of living. The Chancellor from San Diego mentioned something, and maybe you can respond, Mr. Smith, and then LAO and Finance maybe can help me. You mentioned something about the 50% of some funding that is set aside doesn't go to student basic needs, it goes to the classroom. Can you tell me more about that? And others chime in as you think can help me understand what that's about.

Yeah. So under law, 50% of our general unrestricted funding, our total computational revenue has to be spent on instructional related expenses. The majority of that, as you heard Vice Chancellor Finche talk about the compensation costs, over 88% of that is going to be instructor salaries, benefits in the classroom, instructional assistance in the classrooms, and classified professionals. But we cannot spend those dollars on non-instructional purposes.

So when the Student Centered Funding Formula shifted some of our funding to be directly responsive to the number of students who are qualify as low income, we still have to spend 50% of those dollars in the classroom. The challenge is for those students isn't in the classroom, it's outside. And so it really limits our ability to make full use of that funding and meet the full intent of the Student Centered Funding Formula to drive resources where the greatest needs are for students.

Thank you. And that general unrestricted funding rule of the 50%, that existed prior to SCFF?

Correct.

Okay. And was it ever discussed, I don't know who was part of discussions with SCFF that's in the room left here. But was that ever sort of contemplated? Maybe the LAO's office?

Sure. Paul Steenhausen, again with the Analyst's Office. This law, this 50% law actually dates back to 1960, so it's been on the books a long time. 50%, at least 50% of apportionment funds, general purpose or unrestricted funds, have to be spent on salaries and benefits of in-classroom faculty. So that goes in the numerator, the denominator is all staff salaries and benefits, including counselors, including technology, utilities, all those costs.

And so the issue is that districts seem to be struggling more and more with making that 50% mark. And if they don't, they're actually assessed a penalty, a financial penalty. Most districts are right around 50% now. And so the issue is if they had an additional, say, million dollars, this is what Chancellor Smith was kind of referencing. If the district were to have an additional million dollars funding, and they were at 50% already, half of that has to go to classroom costs.

Even if they determined that, boy, we'd really like another counselor. It would be great to do, you know, something more with student support services. So this is, and to answer your question, this has been an ongoing discussion. It's really an issue. You hear a lot of union, faculty unions, faculty on the one hand, and you have administrators and support staff on the other. Very contentious issue.

I've been on and off of this assignment for a number of years, and there have been a number of workgroups and committees within the community college system. Have not seen anything that everyone can agree to. But again, it is statute. It is statute. So Legislature has that ability.

Thank you. That gives me great context. It also sort of puts it in context of this. I think at least three of you said we need to do long term modeling, analysis of if we are revisiting SCFF. I think there's perhaps a tone in the agenda and among a lot of you that I've spoken to over the last several months that it is worthwhile us considering revisiting. And so I think this all sort of is of interest as it relates, it relates to that.

I heard the concern of you don't want to be surprised. The Legislature never surprises you with last minute deals on funding. I don't know where you get that idea from, but that takes me to the issue of the summer enrollment. I do want to ask about this because I understand we don't want to surprise folks, certainly in the immediate, but the recommendation from the Legislative Analyst's Office is on essentially implementing this for summer of 2025, not for this next year summer.

I know the Chancellor's Office, California Chancellor's Office expressed that there's some anecdotal data. I don't know if the LAO or Finance has any additional data on how many districts are using this summer, let's call it a loophole maneuver, whatever it is. Does Finance have any data on that?

Chris Ferguson with the Department of Finance. We don't have any specific data on it. Anecdotally, when we were creating the formula, it looked to be around 60 to 65 districts in the state were using this tool to maximize revenues. They had been doing so for multiple years with about half in the stability protections in every other year. So definitely have seen it as part of the discussions around the Student Centered Funding Formula. It was a specific intention that we not undo that as part of the formula. But certainly we're always open to conversations around what that could look like, if that's the will and the design.

Okay. I'd be interested in the decision of not to close the loophole or correct it. Does the LAO have any further to add besides what was shared?

Sure. I would just like to mention a couple of things. First, if you go back to the discussions around the Student Centered Funding Formula back in 2018, there actually was a lot of consensus about doing away with the summer shift. Even among agencies. We're not aware why ultimately that didn't happen. Perhaps at the time, it was thought that the summer shift wouldn't have as big of an impact under the Student Centered Funding Formula. As your agenda notes, for most enrollment, it's a three year rolling average.

And so maybe the thought was at the time, if districts move some summer to one year to the next, it's going to be kind of diluted the impact because of this three year average. So that's possible. But what my point was in my remarks is that, because of the funding protections that are in place, because of the unique place the colleges are right now, there actually is a pretty strong incentive for colleges to use the summer shift. They're going to see a bump in enrollment.

I've talked to a number of districts that are planning or hoping to use it. They kind of realize that they're getting funding for students that are actually not there. They're just kind of gaming. Gaming, I mean, it's legal. They're not doing anything illegal, but they're sort of gaming it to maximize revenue, but it's not tied to actual students. That said, I've spoken with districts who are planning to use it. The Chancellor's Office can't tell you how many, though, because they...

Because districts actually don't report that to the Chancellor's Office. You kind of have to be a little detective and look to see, hmm, that's interesting that this amount went down or this went up. And so you can kind of back kind of infer it, but it's not something that we have hard data on.

Okay. At the minimum, I would suggest, as our Consultant takes notes, reporting requirement in this year's budget to at least identify what this is and then potentially include it as part of discussions, Student Centered Formula, to the finance. I'll ask one more and then turn it over to colleague. I do have a few other questions, but maybe just a general statement before I ask this last question so I don't forget. Utilization of reserves for ongoing expenditures.

Definitely not something that I think is good to do given the multi-year issues that we have, so I think that's something to look at for the budget. The last one, which is related to all this. Again, I'm going a little bit in circles here, but the districts receiving, as noted in the agenda, and I've seen some of the data from the Chancellor's Office myself, that there are districts receiving some close to $20,000 per student and some districts receiving under $10,000 per student.

So if you just use that as a metric, the funding formula just doesn't seem to have any kind of parity, if you will, and maybe he's not delivering the results in terms of the support students need. So I guess the question is to the Chancellor's Office, I assume you've had a chance... And LAO, welcome... Sorry. Finance, welcome to also chime in. Is it just a function of the formula and hold harmless, or why do we see these large disposal disparities from districts, literally twice as much in one district versus another in terms of support that districts are receiving?

Yes. Thank you. I would say that the cause of that really has more to do with the pandemic and the pandemic specific protections that we put in place. Certainly the hold harmless plays a part, but for several years, we had an emergency conditions allowance where we were funding districts for the level of FTS they had in 2018 to 19. Right. And they were serving significantly fewer students. So as districts grow back, you're going to see that disparity... I think you're going to see that disparity shrink. But we still, because of that three year average, we still have a lot of districts being funded for students they never served. So therefore their per actual student funding is a lot greater In that case.

Does that then mean, because I want to answer or at least acknowledge the question of the districts that are growing, Los Rios being one of them, that if this shift is occurring and this averaging out is correcting itself, if you will, that then funding is going to be made, more funding will be made available to districts that are actually experiencing growth? Will we actually see that happening? Is that your expectation to the districts themselves would be the question.

I can answer. So I think that will possibly happen. And some, it's going to be two things. I think the reality is the pandemic did create some reductions in enrollments, but not all that's coming back. And the reason it's coming back is because of population changes.

And so I think part of the answer is, yeah, once the pandemic protections run out, the emergency conditions allowance runs out, you're going to see additional resources made available by the state that they can reinvest in the apportionment, in the Student Centered Funding Formula. But part of it's not. Part of it's the fact that people are leaving high cost areas and moving to lower cost areas.

And so the question I think for the state is it's going to be over time, how to with a smaller pot for community colleges and Prop 98, how do we allocate those resources to make sure they're supporting where students are not where they were. And so that's kind of, so I think partially it's going to help, but there's also a part of it that's the hold harmless is still going to hold people...

And I'd like to provide some more detail on that too. So, you know, we absolutely believe that fully funding districts for the enrollment growth that they actually receive and they work so hard for, it's the right thing to do. But I think it's unlikely that every high growth district is going to be able to collect full funding for enrollment growth in every area. This is because of the way the Student Centered Funding Formula is designed.

It ultimately depends on the amount of growth funding specifically provided in each year's budget from the state and whether a district is experiencing growth that exceeds 10% of their prior year base FTES. That 10% cap is set in statute as part of the growth formula. So I really want to share an example of how growth funding was impacted in this current year in 23-24.

At our apportionment cycle in February, the State General Apportionment and the growth funding that was provided was not enough to fully fund our full district's TCR. So they have a short total computational revenue from the Student Centered Funding Formula. They have a shortfall of about 3.5%. It's about $310 million. And that's due partially to all a lot of growth in the system and partially because our estimates of property tax are lower right now this year.

So some of these estimates, as they become actual factors, will resolve themselves. But the fact is we have several districts. We actually have 14 districts that reported FTS growth need beyond their growth funding formula target and over that 10% growth cap that's currently in statutes. That was about 5000 FTS, or 29 million, where our districts are doing the right thing, but our system constrains them from being financed.

I understand that, but I'd asked Finance to give me a little in context. We do have districts that don't have that growth. And yes, the apportionment is still occurring. And so help me understand how we're going to ensure that those that do have growth, even if they don't, aren't eligible for that increase. How we're going to create more equity in terms of financial equity, in terms of being able to achieve the type of, to receive the type of supports that they need to ensure that that growth has... You understand what I'm trying to say here, so help me.

Yeah, I think in law there's a long term plan to transition away from the hold harmless and transition all districts to the core funding formula elements. And the way the state was intending to do that was by ending the application of a cost of living adjustment on the hold harmless provision. So over time, the rates on the core funding formula would increase, but the hold harmless would effectively stay static. So over time, every district would grow onto that core funding formula.

So that too will help shrink that gap between what you're seeing today. It is correct that the pandemic did have impacts on what that gap looks like depending on the district. And I think the other thing that I would say is, in terms of growth within districts, that growth metric is a moving target in any given year. So even pre-SCFF, you would see years in which some districts grew above their cap and years when they did not hit their cap.

And I think it's just a struggle in terms of knowing who's going to show up in any given year. So it's going to vary. But the state is and has a plan in law, like I mentioned, to try and transition everyone to that core funding formula with the same rates, the same application of cost of living. The other piece that I would add in here is in terms of equity.

As we think about regional cost of living adjustments or other items that have been mentioned, we have a limited pot of resources within the guarantee. So to the extent you focus on something like a regional cost of living adjustment, that's fewer resources toward potentially the equity components of the funding formula. So that's just something to consider as, you know, the conversations progress in the future.

Got it. Thank you. Mr. Muratsuchi, would you like some questions? No. Okay. Thank you all. This has been very important conversation. Really appreciate your presence and answering those questions. We will move on to issue number two, which is the proposal on the nursing program. There's a proposal in the Governor's Budget to provide 60 million in one time Proposition 98 General Fund to provide additional support for our community college nursing programs.

We have Assembly Member Soria with us, who I know has been very interested and involved in this, and I asked her if she'd like to make some comments before our panel begins to help us set the tone. So I ask you, Ms. Soria, to come forward and join us here. Yeah, if you'd like.

And then we'll go to our other panelists from the Department of Finance, LAO, and the chancellor's office. Welcome.

Thank you. Good morning, Chair and members; I'd like to speak to you today not only to advocate for the Governor's proposal for 60 million to support the nursing education in the community college system, but I had actually asked that amount be increased. We're proposing, or we're requesting, $100 million to properly support the expansion of our community colleges to explore providing bachelor's degrees in nursing. Just for some background on the issue.

You know, I've been working on this issue since last year with the closure of Madera Community Hospital in my district, and over the several months have been working on AB 2104. And this issue became very apparent to me when in Madera Community Hospital was relying on 40% of its nurses as travelers, which was a factor in ending up making the hospital go bankrupt.

And so what we know is that we do have a nursing shortage in the State of California, and it has obviously, several implications, not just for my region in the Central Valley, but regions across the state. If we look at the shortage and the shortage that we will have that is projected by 2030 is actually 44,000 nurses. And so, as I mentioned, we've seen the impacts already impact hospitals like mine in my district.

That hospital's inability to secure appropriate staff, leading to dependence on traveler nurses, was just one of those factors. So regions like mine are probably the most severely impacted by the nursing workforce shortages, and just want to make note that in my area, another just issue that is compounded for the shortage in which we think community colleges are really set to meet this moment is that our CSUs and our UCs are way too far from rural communities.

In particular, in my district, where students have to travel at least an hour to go to Fresno State, or even more, in the northern part of my district in Merced County, have to go all the way to Stanislaus State for a nursing program. This makes it so our students are having to either go to a private university, which is, you know, three times the cost of a state program, leaving many of our students in debt, or actually not having the ability to go to, you know, a nursing bachelor's program at any of the UC or CSU, just because these programs are significantly impacted. And given those limitations, it makes, especially in my community, which is more underserved. It doesn't provide that venue for our students.

And so we believe that the community college system is ready and waiting to serve these students, and we know we have the need, in terms of the workforce, the shortage that is projected by 2030. This legislative body has been committed to expand access to care. But if we don't have the workforce that is needed, we're not gonna meet those goals that we have set for our entire State of California.

And so I don't think the 60,000 - the 60 million which is being proposed by the Governor, much less 100 million, is a small drop in the bucket. I think that it is a very necessary investment, given the fact that we see the number in terms of shortages in our community.

And this would really help us create that first step, to create these pathways to increase access to these programs, these bachelor programs, especially now more and more students are being required to pursue a bachelor's in nursing versus just an associate's. And so we believe that AB 2104, which is the policy component to this, and very grateful that it was approved in our Assembly Education Committee, Higher Education Committee, that we do advance these investments in our current budget because the need is there.

We don't want to see any more Madera community hospitals close as a result of the workforce shortage or see many of our rural clinics, which are also are in need of nurses, especially in those more rural areas, that they either can't open new sites or have to close sites because we don't have the workforce that is necessary. So I just want to appeal to you guys that this is a very important issue.

I know it is one-time funding, but that one-time funding will really help community colleges that are selected as pilot programs to begin to develop these programs so that we can meet the needs not just of today but of the future. So, thank you so much, Chair, for the opportunity to just make my case that this is not just for the valley but really a state issue that we all need to confront, and the community colleges are poised to help us in accomplishing that.

Thank you. Appreciate you being here, and thank you for your advocacy on this. We are going to get into the panel now and into the details. I want to put a specific, just context to this conversation to the panelists just because I'm conflicted about the information presented before us. There's a report in 2023 that nursing programs report, they have the capacity and plans to increase slots, which I assume is a response to the need.

But then also, the LAO presents data that is found in Figure 11 that the amount of applicants and those that are enrolled are going to maybe meet the need in the future. So there's sort of conflicting information here about what that shortage is. And so I definitely want to thank you Assemblymember

I definitely want to ask the panelists to try to give perspective on that as you give your presentations as to why this program or how this program addresses those concerns and also concerns about the issue that I hear about placements and being able to make sure that there's placements for individuals to actually practice and get the hours they need to be able to eventually receive the degrees. Those are two things that I constantly hear about concerns about nursing beyond just having nursing programs available.

So, we'll start with the LAO. This is a Governor's proposal, and then we'll go to the - sorry, the finance to governor's proposal, then to LAO, and then to the chancellor's office.

Thank you, Chair and members. Justin Hurst with the Department of Finance. I'll very briefly go over this investment. Consistent with the 2023 Budget Act agreement, this Governor's Budget proposes an increase of $60 million one-time Proposition 98 general fund to support CCC community colleges nursing programs. The 2023 Budget Act included language for funding the 60 million Proposition 98 general fund each year for the next five years, starting in this budget year 2024-25 for this specific purpose, and this would be the first year of that investment.

The related trailer bill that has been released by the Department of Finance mirrors this language that was included in the 2023 Budget Act at this time. This nursing proposal was a Senate ad in that budget act. So, the Department of Finance is hoping to receive and review conceptual language from the Legislature. Regarding your follow-up question on placement, I would defer to the chancellor's office for that. So that concludes my overview, and I'll answer questions at the time.

LAO.

Thank you. Paul Steenhausen, again with the analyst's office. As your agenda notes and has been widely reported, the state is in the midst of a nursing shortage, largely caused by COVID-19 pandemic, which caused a number of older nurses to quit, to retire, or go into another line of work. It caused also nursing programs to experience enrollment declines. They reduced their enrollment, their cohort sizes for physical distancing. There wasn't enough clinical placements. You had students that were accepted but declined to enroll because of personal other reasons.

So, that was a cause of the pandemic, and you do have this governor's proposal to provide $60 million one-time to expand nursing programs. Again, this would be Proposition 98. Our office took a look at the State of the nursing shortage because the pandemic has waned, thankfully, and we have heard about nursing programs starting to re-enroll students and get up to their original size and, in fact, expand their enrollments.

We looked at a University of California San Francisco report forecasting report that they do for the Board of Registered Nursing. Every couple years, there's a fall 2023 report that UC San Francisco did, and then they just updated it, updated their forecast in February. What they found, and you referenced it, Chair Alvarez, is that new enrollments in the community colleges and other nursing programs have recovered. They have rebounded, and they're actually growing.

Nursing program administrators at the community colleges, at Cal State University, nursing programs and other programs are reporting that they're growing. They're adding new enrollment slots, and based on enrollment projections by UCSF, the supply-demand gap is expected to close by 2028 or even a year sooner by 2027. So that's good news. As your agenda notes, however, regional gaps may persist. You have some areas of the state, and this is actually in your agenda. This is an older report, but this is on page 17, figure 1.

You can see that in some regions, you have supply actually above demand, and in others where the opposite is the case. That is the case with a place like the Central Valley, for example, where you have demand and the supply is not keeping up with that demand. In that case, the Legislature actually enacted a program, a couple different programs, to address these kinds of regional needs. The biggest one is the strong workforce program, and the strong workforce program gets annual money every year.

It's about $290 million that goes to community colleges and regions and the purpose is to promote regional coordination to address workforce gaps and also to fund the higher cost of career technical education programs like nursing. And as you'll hear in the next agenda item, the strong workforce program has a lot of unspent money. Colleges are actually not able to spend their money they're getting in the current year. They're still spending money from 2020 to 21.

So based on the data we've received from the chancellor's office, colleges and regions, including the Central Valley and other areas, have money, should they need it and want to use it to increase enrollments beyond what they're already doing in nursing programs. So given that the data suggests that the statewide shortage is temporary and that other state funding is available to boost enrollment to address regional needs, we recommend the Legislature reject this proposal by the Governor for more nursing money for the colleges. Thank you.

Thank you. Chancellor's office.

Thank you, Chair Alvarez and subcommitee members. My name is David O'Brien. I have the honor and privilege of serving as vice chancellor for government relations for the California Community Colleges; the healthcare staffing crisis is a critical workforce needed and a priority sector for the community colleges to address. Under our Vision 2030 roadmap, community colleges can and will play a major role in solving the nursing shortage.

With 77 associate degree for nursing programs serving nearly 30,000 students annually, California's community colleges already contribute significantly to the nursing workforce. We graduate almost half of the state's nurses and satisfy about 21% of the state's demand for nurses. Our nursing programs are very diverse and include many students of color, low-income students, and other historically underrepresented populations. After graduating from our programs, these nursing professionals are more likely to practice in ethnically diverse communities, reducing health disparities that those regions and communities often suffer.

Our students are receiving affordable, high-quality training that will prepare them for licensure and beyond. Despite the increased interest in community college nursing programs, however, our institutions are struggling to expand capacity and meet student demand. The number of qualified applications received by California nursing programs has increased by more than 80% over the last 10 years, but according to the Bureau of Registered Nursing, nearly 75% of qualified nursing applicants were denied admission into an ADN program in 2021-22.

These prospective students represent a reservoir of talent that California must tap into to alleviate regional nursing shortages and ensure equitable access to healthcare for all. According to research conducted by our Centers of Excellence, the State of California will need to produce nearly 26,000 new nurses annually. But based on the most recent two years of data, we've added only about 14,000 nurses, leaving a deficit of over 11,000 nurses.

A lack of qualified and professional nurses can have devastating consequences on both the overall healthcare system and for patients, and this is especially true as we heard from Assemblymember Soria for regions such as the Central Valley, Inland Empire, and Northern California counties.

I think it's all well and good to say that the nursing shortage is going to somehow solve itself over the next few years, but I just want to highlight for the committee that in the most underserved regions of our state, the nursing shortage is not hypothetical for the students, families, and communities that we serve. It's very real when hospitals close, in part because they can't recruit and retain qualified healthcare workers.

Whether it's in Madera or Coalinga, projections, multi-year projections don't change the fact that there are communities right now, low-income Latino communities, where an ambulance ride to the nearest hospital can take an hour or more.

So according to survey data, actually, from the most recent legislative report of nursing programs that my office issued, we found that the number of nurses planning to retire, and I say we this is actually UCSF survey data, found that the number of nurses planning to retire or leave the profession has increased substantially since 2018.

About 39% of all surveyed nurses in 2022 said that they would definitely plan to either retire or leave their profession or that it was reasonably likely that they would do so in the next two years. So, for these reasons, we are strongly supportive of the governor's investment of $60 million to grow, educate, and maintain the next generation of registered nurses through the community college system.

The Governor's budget and current trailer bill language as the Department of Finance has presented, calls on our system to focus this funding in two key areas. First is the expansion of our existing ADN programs. We believe that this may include expenses related for direct instruction, such as faculty hiring and equipment, and related efforts to increase student participation and degree attainment. Second is the expansion of our successful ADN to BSN partnerships.

As noted in your analysis, several of our community college districts have established successful what we call two plus two partnerships with four-year universities. Under this collaborative model, students earn their ADN at a community college and complete their BSN at a CSU or other four-year university. It's certainly true that this budget proposal alone will not solve the nursing workforce crisis. We agree that on the need for additional capacity for clinical placements and more qualified faculty teaching in our programs.

But one thing is clear, California's community colleges are deeply committed to serving students who don't have equitable access to the state's nursing education programs. Private institutions, as the Assemblymember mentioned, are much more expensive than our community colleges, and low-income Californians simply cannot afford this option most of the time.

I spoke just yesterday to a leader of one of our Central Valley Community college districts who shared with me that the nearest four-year university to her colleges with a nursing program charges $150,000 in tuition over the total length of the program. Meanwhile, community colleges continue to charge $46 per unit, making the total cost of receiving an ADN at a community college less than 1/10th of that at many of our most expensive private universities.

This is the role for the California Community Colleges. Mister Chair, if I may close on a personal note, as the son of a retired registered nurse who brought her infant child with her to campus as she pursued her nursing degree, private citizen Sally O'Brien in West Sacramento asked me to convey her strong support for this proposal. I'm happy to address any questions.

Please let her know we heard her loud and clear. Thank you all. Let me start the conversation with a few items. So, I didn't get any more clarity in the panel as to what the data shows. I think if we look at page 17, figure 1. I've circled two regions that clearly, at least if we all believe, and I think we need to agree on what facts we're going to look at.

But I heard the chancellor's office and the LAO both refer to this UCSF as sort of the center of information. Los Angeles and Sacramento, probably all the regions seem to be on the right path, and I think maybe we should start to figure out where we agree and disagree. Certainly, San Francisco and Central Valley identify shortages, and the others are, you know, if it all goes well, they'll break even, which would be a good thing.

So I think we need to just agree on the set of facts. If that's the case, then we can start to focus our conversation on that. I would, though, like to get more information on two things. One is on the issue of placements, because I keep hearing from nursing programs, public nursing school nursing programs, that placements continue to be a challenge.

And I'm trying to understand how, in places where, unfortunately, medical systems have closed or left or whatever happened, we're going to be able to find the placements within those communities to actually give the students the opportunity to get their practicum hours in order to complete their degree.

I haven't seen data on, I don't know who, maybe UCSF, I don't know who has information, but I think that's data that I'd like to see before making sort of a final judgment on this investment making sense in addition to what's already available, and that takes me to my second point, which is the strong workforce funding. And I know we'll talk about it in the next panel, but there is funding available there. That is my belief.

You can correct me if I'm wrong, but intended to ensure that college and districts are able to utilize those funds to respond to workforce needs. This is a workforce need. And so I think I'm interested in understanding why that shift has not already occurred and why those funds are not being used in this way to serve this important need. And then I think the last thing I think we have to acknowledge, I want to be fair to the administration.

So it sounds like the administration is meeting a commitment of a previous year budget of just putting 60 million to the budget. But there's no, from the administration standpoint, and I think I just heard for the first time from the community college system, but from the administration standpoint, there is no current vehicle of what the program is going to look like. I did hear from the chancellor's office, ADNs, and ADNs to BSNs. I did not hear community colleges offering bachelor's degrees.

So, I guess maybe you can help me understand what the thinking is if there have been any discussions.

Yes. Justin Hurst, Department of Finance. I can confirm that your assessment of the administration's proposal is correct. The trailer bill is very bare-bones. It just mirrors what was passed in the 2023 Budget Act, and the administration's intention is to continue negotiations with the legislature on that. So, we do not have a predetermined outcome on that.

Thank you. Appreciate that.

Did I hear you correct expanding ADN programs in ADN to BSN?

That's our understanding, in part based on some discussions we had with, and I believe they may be here, the sponsors of legislation last year that I believe was held as a two-year bill regarding the use of these funds because this was originally a proposal that was floated late last year.

So our understanding has been, and again, based on the Governor's budget summary, that the focus ADNs and ADNs to BSNs separately, you know, we're aware of, and the chancellor's office supportive of efforts to establish, you know, community college BSN on a pilot basis within our system.

However, our understanding has been that since this was proposed in the budget separately from the process, and that was not the administration's intent to link it to those legislative proposals, we are supportive of both but supporting them separately at this time. And I think if the legislature were to pass both, of course, we would, you know, work to -

Where is the Senate's version of what this program is becoming or will become? What can you -

There's a Senate Policy Bill, Senate Bill 895 by Senator Roth, that I understand is being heard in Senate Education Committee tomorrow. And Assembly Member Soria, of course, has companion bill.

Okay. So I think for both approaches, my questions remain. I definitely want to be supportive of growing programs, particularly in regions that need them. But I think I like to see the data on, one, why a strong workforce not being utilized for these programs, and two, I want to make sure that the issue of placements is addressed. Growing programs for the sake of growing programs where they can't actually fulfill their ultimate goal, which is achieving the degrees, is not really beneficial either.

And so I think certainly to both of those bills, I'd like to fully understand.

Taking the strong workforce piece first. We'll get back to you with some more data and some more detailed information. But basically, the way we've been looking at it is that under Vision 2030, the framework adopted by our board of governors, we're looking for a significant expansion of community college workforce programs into sort of growing new sectors of the economy in recent years. And we were thinking largely of those strong workforce funds as being part of that.

In general, we're open to utilizing whatever funds are available when it comes to meeting high-need areas like nursing. So we'll follow up with you on that, on the placements piece. My understanding, and again, we're very aware that that's an issue and a challenge. My understanding is that that data is not necessarily collected in a centralized place somewhere. At least we don't have access to it, as far as we're aware.

But there's been pending legislation a couple of years in a row really testing my knowledge of bill numbers, but I want to say 2277, Assemblymember Low. There was a bill last year to sort of add more transparency around that process of which students are getting placements in which hospitals, particularly by what industry? Cause I know there's questions about whether students from the private universities, whether there's an inequitable access issue with those universities and their financial ties to some of our hospitals.

I'll just end by saying, with enough data on those fronts, I wanna at least state that from this committee, we're interested in supporting Assemblymember Soria's approach and also Senator's approach on growing some of these programs. And so we'll look at this data in context of the bills and see how we can be supportive of growing these programs and where they're needed. So with that, I'll turn it over to our committee. Mister Fong.

Thank you so much, Chair Alvarez, and thank you, panelists, for a robust discussion on these programs. Thank you Assemblymember Soria, for your leadership and efforts around these efforts as well. And thank you to the Department of Finance for the clarification that the negotiations are ongoing as we look at putting the meat on the bones of this proposal. And as a - we know that our community colleges are impacted by nursing programs, and there's a high demand for these programs.

Anecdotally, I've talked to the President and leaders at East LA College, at Harbor College, at Southwest College - thank you. In terms of the wait period, it's two years, three years to access classes in some of these nursing programs, especially the programs have been impacted. And I'm pretty sure that up and down the state, we see a lot of need for these very important programs in healthcare and nursing. So I just want to know about that as well.

And thank you to - when we look at Pages 16 and 17 also indicate long-term shortages in the San Francisco Bay Area, Central Valley, and Central Coast as well. So we know that there's regional shortages going forward as well. And I just hear anecdotally there's a lot of traveling nurses that come to our hospitals in Southern California and the Los Angeles area. So, in terms of the work that we can do to expand nursing programs, that's something that we are strongly advocating for and the $60 million there.

So, in terms of that framework, Chair Alvarez asked a question about a strong workforce, and I'll ask in the next session as well. We see that there's $381 million left in that. And I just heard from the chancellor's office that it's possibly a lot of those funds are going to be used for emerging sectors, and I know with LA, their LA regional consultant from there, they're looking at different sectors with partnership with the LA Economic Development Corporation.

But I think at the same time, with these challenging budget situations, we kind of look at all avenues. So I'm glad that we're looking at those avenues as well. So quick question is, we know there's challenges also to expand nursing programs as well, sometimes looking for qualified faculty and clinical sites. What are some possible solutions to help address the nursing faculty shortage and lack of clinical sites? I'll just throw it open to the chancellor's office or anybody like to answer that.

I can get started. You know, on the faculty shortage, we're aware that that requires the MSN, the master's of science and nursing degree. And I know that Chancellor Christian has been working very closely with our CSU partners, Chancellor Garci1a, on talking about the role that our system plays in helping feed into that pipeline as well.

So longer term, looking at projections, more students able to get into ADN programs and then BSNs, whether that's at community college or CSU, means more students who can then go into the master's track and come back to service faculty. So the expansion of expansion is kind of a win-win-win in that regard.

I think I would say on the clinical piece again, speaking to the leaders of one of our Central Valley Community College districts yesterday, she reminded me that that can often be like a proctored leadership course taught by a faculty member. Right. And that they have adjunct faculty who, if they're able to make them full time or hire more from the MSN pool, would be available to come to their campus and teach that course and provide that experience to students.

So not saying that this proposal would solve both of those issues in its entirety, but it would help sort of feed into that pipeline that's necessary to solve that.

Thank you. Does anybody have any other comments on that? No. Thank you for that context. Mister Muratsuchi, any questions? Pass it over. Mister Muratsuchi, for some questions or comments. Thank you.

Thank you. I had an opportunity to hear Assemblymember Soria's bill and our Higher Education Committee, but some questions. Well, first of all, the information in the committee analysis, there's a point made that thousands of qualified applicants are turned away by community college programs with a chart indicating more than 14,000 applicants. I just wanted to confirm that all those 14,000 are qualified - they're qualified for the program that they apply to.

Did you want to answer that?

No, go ahead.

That is my understanding. It's the Chancellor's Office's report. But each community college program has a minimum qualifications in order for a potential student to apply. Certain coursework, they have to take with certain grades. And so, I would imagine the Chancellor's Office included those individuals who had met at least the minimum qualifications.

Typically, though, as we've, as discussion has gone and you've heard, there are more qualified individuals than actual slots, and that can vary by region and by program. But in general, if you look at system-wide, that's true, and that's been true for years. And so, what the colleges do, and they're empowered to, by statute, is they're allowed to choose those with the most qualifications in order to be accepted of the program.

And that might include the coursework they've taken and grades, but also it could be work with certain populations ability to speak another language. And those sorts of factors are taken into account so that colleges can pick people that they see as really the best for the program with the highest chance of succeeding in the program.

Okay, turning then to this table shown on page 17, showing the supply and demand, the regional supply and demand, I don't think I heard any explanation as to why it is that, especially like Los Angeles, seems to have the higher supply than demand, whereas the Central Valley has the demand exceeding the supply. What are the main reasons for that?

I can speculate. Assembly Member, I would just point out that this is a projection for 2035. So, the projection is at 11 years from now, there may be, we may have supply that exceeds demand in certain regions like Los Angeles. And just based on my experience working in the higher education system, my semi-educated guess would have to be that just has to do with the availability of more institutions of higher education in regions like Los Angeles.

You know, the Central Valley is, there's what, one or two CSU campuses, one UC campus, and certainly, a number of community colleges.

Did the LAO have something additional?

So I would agree this is a projection. That said, I have heard and seen research in the past showing different levels of supply, demand mismatches by region. So I think that's true.

You have just before the pandemic in the Sacramento area, in fact, you had newly minted nurses coming out with their associate degree or even bachelor's degree that had trouble finding a job, and they had to spend sometimes a year to find a job or go to another place, maybe more in the Bakersfield area, where you didn't have that kind of mismatch. So, in some cases, it's just a matter of where people want to live, where they go that's contributing to as well, and it does vary.

But it also sounds like you're saying that they may be migrating to where there are more job opportunities.

That does happen if somebody can't find a job, if they're able to with family and other obligations. Absolutely. Is the case where you have people who have a nursing degree have trouble finding a job in a certain region, will end up moving somewhere else, like San Joaquin County, to find a job. Again, if their personal lives allow for it, and other factors are in place as well, such as a working environment at the hospital.

But would the LAO agree that with Mister O'Brien that, I mean, this seems to support Assembly Member Soria's point and effort that if you have a workforce shortage because you have fewer higher education institutions in a region, then it would make, you know, policy sense to try to expand nursing programs in these underserved areas? So, I guess I'm asking the LAO, you know, does it make sense?

I mean, we know when we heard this in the Higher Ed Committee, for example, you know, the California State University objected to the proposal because, because they saw the duplication between the programs, the bachelor's degree programs provided by the CSUs versus the community colleges.

But if, in fact, we're having workforce shortages in part because there are fewer higher education institutions into Central Valley, it does seem to make sense to have expand bachelor's degree nursing programs to community colleges that can provide more access to the Central Valley communities.

So, currently there are, I believe, 78 community colleges that have associate degree programs, associate degree in nursing programs. I'm not, that's something that could be pretty easily found out, how many are in the Central Valley. To the extent that a region, you know, community colleges have a lot of autonomy. They have their own local boards and their local leaders that decide what is that local need.

And to the extent that you have a college now in the Central Valley or anywhere in the state that does not have a nursing program but has talked with industry and determined that they would like to have one, they have the ability already to start up a program.

But we're talking about, the Bill proposal was to allow community colleges to provide a bachelor's degree program even where it might be in duplication with a California State University.

And just to be clear, one does not have to have a bachelor's degree to practice as a nurse, the associate degree for nurse to become a nurse, whether you have an associate degree or a bachelor's degree or an entry-level master's. The individual takes the same test. It's the same national licensure test, and they have to show they have the same abilities.

And, in fact, the data I've seen shows that nurses coming from associate degree programs actually have higher pass rates than those coming from bachelor's programs. So, I think it would just, the Legislature, the Committee, would just need to better understand what that bachelor's degree is bringing, what additional attributes it's bringing. Talking with hospitals, identifying, is that all they're hiring? They're not hiring associate's degrees?

I don't think that's the case right now, but it would take better understanding whether that nursing, the set of skills one needs to be a nurse, really is aligned still with an associate degree, or whether now it does require, in fact, a bachelor's. And the data I've seen to date has not shown that. But this is an evolving profession. Of course, all the time, new competencies are required.

All right.

Assembly Member, I would just note that the data we have seen shows that overwhelming majority of new nursing jobs, as well as hospitals, are interested in hiring BSNs.

And that that is, certainly, it's not that there are no opportunities available for ADNs, but that opportunity is shrinking somewhat, and that by only being able to offer the ADN, our colleges are not, you know, in this growing economy, are not able to provide that opportunity to students who might find themselves unable to get into a BSN program or to apply at a hospital that wants a BSN.

That was a, a good point to raise. And that's something that reminds me. Something else the Legislature would need to better understand is whether, because there are a number of pathways from an associate degree to a bachelor's degree, and that's true for nursing. That's true for many, many pathways, from accounting to engineering, where you have associate degree in accounting and a bachelor's.

So, the Legislature would want to better understand, is there something about the pathway between the associate degree to the bachelor's degree in nursing that's somehow not streamlined, that's creating barriers for students, because for the bachelor's degree in nursing, students are not taking intensive nursing programs. It's mainly two additional nursing classes, not labs. It's a research class and a community health upper division class for the bachelor's plus upper-division general education.

So, legislation would just better need to understand, are there barriers right now that are somehow preventing individuals from getting that bachelor's degree if they already have their associate degree? And right now, there are a number of partnerships between the colleges and Cal State University, but the Legislature might decide that that's not enough.

All right. Thank you very much.

Thank you. Thank you to the panelists. Look forward to hearing back some of this information we've discussed. We'll move on to our next issue, which is past appropriations, a review of past appropriations, and we have Legislative Analyst Office who will kick off the conversation, followed by Department of Finance and the Community College Chancellor's Office. So, LAO, please go ahead.

Thank you. It's now page 20 on the agenda and you'll see a figure on page 21. So, over the past several years, the state has adopted many one-time initiatives. From 2021-22 through 2023-24 the Legislature approved about $3 billion one-time for more than 60 community college initiatives, and the Legislature was able to do that because of revenue growth in the state.

Because of the growth in that Proposition 98 guarantee, the Legislature was also able to provide funding for new and existing ongoing programs. In light of the state's budget situation, in December and January, our office consulted with the Chancellor's Office to identify any unused, unclaimed or unallocated funds from these initiatives and programs. The Legislature in taking a look at what are some possible approaches to addressing this budget situation. The Legislature could achieve one-time savings by reverting available funds from given years.

And to the extent a program is ongoing and there's an operating surplus, the Legislature could generate ongoing savings. And we think this is preferable to first look for funds that are unused, unclaimed, unallocated to use this budget solution rather than having to go into money that the districts already have and are spending. So that's something that we attempted to do. On figure 10, you can see a list, and I don't think it's an exhaustive list.

The Chancellor's Office would have some others, I'm sure, and some updates as well on funding that's still available. So, we'd like to point out, and this has been mentioned a few times, that strong workforce program money, there's money that hasn't been spent from 2020-21. And we just got an update from the Chancellor's Office of the 250 plus million dollars that the colleges and districts and regions have in the current year.

They've only spent about 2 million of it through the first half of the year, and that's because they haven't spent past year money. So, it's really an opportunity here for the Legislature to take a look at unspent money and potentially use it for a budget solution, and we recommend you do so. I just want to point out another example is the longstanding part-time faculty health insurance program.

For a number of years, that was about a half a million dollars that the Legislature provide ongoing money in 2022-23, the state provided a big augmentation to that about 400-fold increase to $200 million. And in the first year of that expanded program, most of that funding did go unclaimed by districts. In some cases, they just maybe didn't have enough time to organize and talk to their unions about whether to do it or not.

But regardless, this is an ongoing program, so there's a fresh new $200 million in the current year. And so, we're recommending that you revert the unclaimed money from 22-23 and use it as budget solution. And the Legislature could consider this list, as I mentioned, as a starting point, adding more information as information becomes available. And again, there might be some additional monies out there that finance and the Chancellor's Office has looked at since we did our report in February. Thank you.

Thank you.

Thank you. Justin Hurst, Department of Finance I don't have a formal presentation, but I will briefly note that the Department of Finance routinely sweeps unspent and uncommitted funding from the community colleges that can then be re appropriated for other purposes under Prop. 98. So, the Administration's goals, I will also note, are to provide community colleges with stable and predictable funding. And as the LAO has noted in the agenda and just now, briefly, these amounts may also change by the time of the Budget Act.

So it's hard to predict what the realized savings would be at this time. And that's all I have. I'm happy to take any questions.

Thank you. Chancellor's Office.

Wrenna Finche, Vice Chancellor of College Finance and Facility. Again, community colleges really appreciates the stability and continued support that was provided in the Governor's Budget. And we do work very closely with the Department of Finance on regular reappropriation drills to identify the exact amounts that are available for re-appropriation. I want to share some really good news and a fundamental truth about community college funding. The state is receiving an enviable return on investment in its investments in community college programs.

In recent years, our colleges added over 128 billion in income to California's economy, which is about 4%, a little over 4% of the gross state product. Our community colleges support a million-and-a-half jobs, or one out of every 16 jobs in California. And for every dollar that you invest in a community college student, the state can expect a return of $2.10 in added tax rate revenue in the future.

So, we certainly understand that tough decisions need to be made this year, and we would ask that the Legislature consider deferrals of future funds rather than pulling back unspent funds. When you pull back funds from districts, as has happened in recent years, it really erodes trust in the state budget process and it can alienate the communities who are really counting on that funding to be available for the programs that they care about and need to survive.

And it undoes in an instant months and years of planning for the most effective use of program funds, with students ultimately bearing the negative consequences of that. So I want to talk about a few of the reasons why we typically might have unspent funds.

It really varies by program, but in general, we're implementing and administering very complex programs and it can take a lot of time to develop plans, build buy in for those plans at the local and regional-level and state-level from many, many stakeholder groups, and then phase in a very thoughtful, strategic and effective implementation of those plans. That's especially true for some of the line items in the chart.

Zero textbook costs, the healthcare pathways for English language learner and strong workforce funds I want to share a little bit more information and some updates on unspent funds, focusing on five of the, five of our programs, including the three I just mentioned, and a little bit on the COVID-19 Recovery Block Grant and the student-centered or excuse me, Student Success Completion Grant. So just briefly, the Zero Textbook Cost Initiative. We're showing about 66 million that to date has not been distributed.

However, we're in the final phase of a multi-period implementation plan and we have a competitive grant process for those funds. So as competitive grants come in for acceleration grants, impact grants, and expansion grants, that money is going out the door every time an eligible grant comes in. We do expect all that money will be have been granted to districts by December of 2024. For the healthcare pathways for English language learners, again, we have a competitive grant process, which is our final phase of a planned strategic multi-year implementation.

And we expect all of that funding to be distributed by fall of 2025. For strong workforce we're seeing a little over 320 million unspent across the years mentioned in the report, but again, this is one that's based on long-term planning with regional partnerships, with employers, and industry leaders, not to mention our higher education leaders.

The intent of these funds is to increase the number of students in quality CTE courses and programs and pathways that achieve successful workforce outcomes and increase the number of programs and pathways available to students.

So, these are, you know, these are really long-term plans that are being made to train nurses, firefighters, construction workers, underwater welders, automotive and EV mechanics, and many, you know, many other trades that are essential to adjusting our changing climate and economy and for emerging sectors that are necessary for the state to maintain a solid workforce.

With California's unemployment rate ticking upward and the long-term effects of inflation starting to wear us down a little, I think now more than ever is the time to continue to invest in the workforce of the future. And then I'm going to circle back to the COVID-19 Recovery Block Grant, which was provided to districts a couple of years back, when they were also receiving a huge influx of federal dollars for similar purposes.

The federal funds had much shorter expenditure deadlines, while the state recovery block grant did not have that short expenditure deadline. So, colleges were really prioritizing spending down their federal dollars first, and now they're very quickly and effectively using that recovery block grant for its intended and expanded purposes. They have reported just this month to us that there's a little over 240 million remaining, but they fully intend to use it within the next couple of years for the purposes of the block grant.

And then I think I was going to also talk about the Student Success Completion Grant. So, this was first allocated with expanded allowability for former foster youth. Just last year in 22-23, Chancellor's Office guidance allowed for multi-year use of these funds. And in fact, we've actually submitted a request to the Department of Finance for trailer bill language to clarify that these funds can be used over a three-year period, which would allow for us to adjust for fluctuations in the eligible student population.

These grants are really critical to provide students with the funds they need to complete college on time. And as of a survey just this last week, we're estimating there's about 21 million remaining of the student success completion grant from 22-23. There's just one other program I want to bring to your attention. It's really a great, innovative project that's a priority for both Chancellor Sonia Christian and our Board of Governors, and that's the Pathways to Higher Education for Adult Learners.

You won't see it on your list, but we have been working with United Domestic Workers on a really innovative new partnership to develop skills, education, and training in the care economy. We do have a request into the Department of Finance and the Legislature for 5 million to fund two years, the next phase of this project. I know that UDW will likely want to speak on this during public comment, and we have been in touch both with Chair Alvarez and others about this presentation proposal.

So, you know, we, again, I just want to say we're going to continue to work very closely with the Department of Finance to identify the actual amount of reappropriate, funds available for re-appropriation. And I want you all to know, too, that our system, because we lack a centralized data platform, anytime we need real-time expenditure data, it's not necessarily going to be available down to that individual program level.

Every one of these requests is an ad hoc survey out to the system, a very manual and intensive process. But you know, we are. So, please bear with us as we gather appropriate data. Thank you. Happy to answer any questions.

Thank you. Appreciate all of your input. Maybe we should start with identifying some funding to get you a real database, to get you the ability to provide information for you to make decisions as you go. But let me ask about. So, I think all budget subcommittees, when they hear dollar figures in Bs, as Mister Muratsuchi often refers to, that's like ears perk up, because this is what we're talking about. Well over it appears like $1 billion in programs that have not spent all the allocations.

And maybe Mister Ferguson or LAO, sorry, you're Finance. I understand. I'm very sympathetic to the concern of districts in terms of reliability, and I think you are too, in terms of expectations for funding. But every year we go through the process of sweeping funds, or there's probably a better term to where we get the funds, revert funds that were not utilized by specific programs, in this case by the system. So, this is a regular occurring process, right?

It's not something that we just do in times of difficult budget situations.

Yeah, that's correct. It's a regular process. We generally refer to it as the Sweeps Drill when we're working with both the community colleges and the Department of Education. And it's really looking at those true balances that are completely unallocated. They really haven't left the agencies and gone out to districts. That's generally what we look at this year. It's a bit more intensive in that we're also looking potentially at money that may have gone to districts that is being unused right now.

So I think, you know, at least from our perspective, we definitely look at the former more than we do the latter, because in the latter case, you literally would be asking districts to return money to the state.

Okay, thank you for helping explain that. There are certainly things, as was expressed by the Chancellor's Office, that I think maybe require us being more careful in that process, like the Zero Textbook Cost Initiative. If there are things that are being implemented, totally understand that. But strong workforce program, which goes back to four years now with which was intended to serve students. We can no longer serve the students from 2020 or 2021 or 2022 or 2023. And now we're halfway through 2024.

So I would just, in my feedback as you go through this process, that those seem to be places where we can identify either reverting, sweeping, or as we discussed earlier with the program for nursing, identifying sources of funds to do things that we now believe are priorities. So that would be my feedback on this issue. Let me ask specifically on the COVID-19 block grant, the Legislature was to get a report by March 1st by the Chancellor's Office on the spending by districts.

Has that report been made available? The spending by districts on the block grant to the Legislature.

That report is going to be available very soon. It's in the very final stages of review and remediation to be able to make it public.

Okay, will that be before June?

Yes, absolutely.

Okay. Will you make it available to the Administration before the May Revise?

We can do that, yes.

I'll turn it over now to my colleagues. Mister Fong.

Thank you so much, Mister chair. And thank you for all the presentations here today. I just want to follow up on the strong workforce funds. We see that $381 million is currently there. How do you have the numbers broken up by regional consortium versus community college district?

Let me turn to my chart. So for strong workforce, and I have it broken down per year. I didn't total it by all three years. But in 2021 we have a remaining 18.1 million at districts and 17.5 at the regional consortia. 21-22, that number is 46 million for districts and 19.9 for regional consortia. In 22-23,134.9 million for districts, 89.5 for the regional consortia is remaining.

So it sounds like there's more funds at the community college district versus the regional consortia. Sorry, can you provide that chart to us? I don't think it was in our presentation.

Yeah, sorry, I did forward it to.

Oh, thank you. Thank you, Mister Moore.

Yes, I believe you're right. If we add that up, you're going to see more at the districts.

Okay. Because I know the allocation model was we went 60% to community colleges and 40% to the regional consortium, is that correct?

Okay, so are there regional consortium that are doing a better job in getting the funds out? And how can we replicate some of those strategies? We know that in California, we have over 5% unemployment rate, I believe it's one of the highest in the nation. And we were looking at creating training programs in biotech and healthcare, nursing, and many other programs. EV mechanics as you mentioned. I took a tour of Rio Hondo last year, and they have a tremendous EV mechanics training program there.

Yes.

How can we get some of these funds out more expeditiously? I know you're talking about the industry partners and building out the consortium and building up the partnerships with the workforce development boards and companies as well.

So, I love that you asked that question, because that is exactly the question we are asking ourselves internally and really doing a deep dive. We've got some wonderful folks on our staff who are doing a deep dive with each regional consortia to identify where we can replicate successes and to, you know, and see where we need to invest in more money and, you know, in other programs. So, you know, some of the. I'll share with you.

Some of the areas that I'm really excited about in strong workforce right now are in that climate action, climate action pathways area. We just had a blue economy event at Santa Monica College and Altasea at the port of Long Beach just this last week where we learned about what the colleges in the Los Angeles region are doing to really promote these really necessary jobs. We got a tour where we learned about how you can cultivate seaweed and generating, generating wind energy.

So just a lot of exciting opportunities there. We have a number of demonstration projects that we're moving forward. The healthcare pathways for English language learners is one of those, but a number that, you know, can really draw from the support of the strong workforce funds.

And thank you for bringing that context on Altasea. They're doing tremendous work down in the port, as you mentioned, partnerships with UCLA USA, some of the community colleges. And in addition to seaweed, did some stuff around, I think, alternative energy and other opportunities. So, in terms of the strong workforce funds, the regional consortium, and the community colleges, we know, we just had a discussion on the student-centered funding formula as well, and how we can increase the number of certificates and the student success outcomes.

I think it could be a win-win all the way around if we were able to help get some of these funds out on the street more quickly and expeditiously. I think I would encourage folks to continue to elevate some of those conversations and to really make sure that we're getting the outcomes that we want to see out of this strong work. Yeah. Did you want to chime in on it?

We just wanted to answer your first question as well, because we did look at the regional consortia, money, the strong workforce, we found that all eight regions had fairly large surpluses, annual surpluses. The regions with the largest ones were the Central Valley, the South-Central Coast, and the Inland Empire, Inland Empire Desert. Those have the largest. You had surpluses in the Bay Area, north, far north and other regions, but the biggest were those three I just mentioned.

Thank you. Thank you for that context, and thanks for looking at the data. I think there's a lot of opportunity to really make sure that we're trying to tackle our un-employment here in California and really help the community colleges be in a win-win situation and concert in partnership with our workforce development boards and local regional consortium going forward.

So, I would just encourage anybody listening out there that as we look at scaling-up these programs, as you heard from our Chair, that, you know, we're looking at funds that have been deposited for at least three or four years. And so those funds, how are they encumbered? How are they being planned to be spent? I think I would love to see additional information on that going forward. Thank you so much, Mister Muratsuchi.

Thank you. Following on Mister Fong's questions about the Strong Workforce Program, the chart showing on page 21 of the budget analysis shows $381 million, right? Even with my reading glasses, I'm trying to see if that's an eight instead of a five. Right? Yeah. Okay. And, well, first of all, it's my understanding that there is a community college portion of the strong workforce program and a K-12 portion of the strong workforce program. Is that correct?

Yes.

Okay. Does that $381 million include K-12 Strong Workforce Program dollars?

No, this is just for community colleges. And I'll just let you know that we've updated those figures. It's not published here, but Mark has them. 323.9 is the updated amount available at this time.

Okay, I know one governor. Our previous governor, Brown, first championed the regional consortia. As a former regional occupational program trustee, I fully recognize the importance of having these regional consortia to, to coordinate our workforce training programs with the regional employment needs. At the same time, I mean, it's my understanding that K-12 programs are already working with regional programs. And so, I'm still trying to understand why the community colleges haven't been able to roll out what our K-12 programs have rolled out.

I don't know if the LAO has any information. Am I correct that the K-12 programs have been successful implementing regional programs, if not working with regional consortia?

So, is your question whether the high schools have their own regions?

So, there is the K-12 Strong Workforce Program component. And it's my understanding that that requires working with regional consortia. And maybe Finance knows this also, but.

That's right. The community colleges work with the schools to award these grants, the K-12 Strong Workforce Program. The idea is to increase the alignment between high school career technical education programs and then the feeder that feeds into the community college programs. So that's the, that's the point of having this. And the purpose of having this, this program, the K-12 Strong Workforce, is that alignment piece.

Okay, well, I did have a Bill last year, AB 3. I had a Bill last year that, that was proposing to shift the Strong Workforce Program dollars for the K-12 from the to be administered, to be moved from the Community College Chancellor's Office to the Department of Education. I know that Department of Finance has historically opposed that.

Mister Ferguson, I wanted to see if the fact that there is over $300 million in unspent strong workforce program dollars might lend itself to support my argument that it should be moved over to the Department of Education to be spent rather than the Chancellor's Office.

No, I think my comments from one of the prior hearings would still stand. And I would say that there are two similar focuses, yet different approaches in the two programs, in that the similar focus is career technical education programs and workforce development programs on a regional basis. The difference being that one is focused on school programming and one is focused on community college programming.

It is likely that given the return to in-person instruction and community college campuses is part of the reason that you're seeing some of those prior balances, because a lot of career technical education, vocational-type programming, workforce development programming is on campuses or housed on campuses. So, I would speculate that's probably one of the core reasons that we see some of those prior balances, because those are the pandemic years.

And we know, and we had to push last year and the year before, we had to push districts to return to in-person to have more enrollment gains. So certainly, I think that was part of the reason that you're seeing some of the balances in the programs. I would expect colleges to begin spending down those resources now that they've definitely shifted away from a predominance of hybrid or online options.

But certainly, the focus remains on coordinated programming between our schools and our colleges, and certainly, understand that there are two different approaches, whether it's colleges or K-12 education.

So you're saying that because there's. Well, community colleges have been slower in getting students back on campus than our K-12. That, that may be part of the reason.

Yeah.

Okay. Thank you.

Thank you so much, Mister Muratsuchi. And just one final question. When we look at the shift in funds from the 60% model to the community colleges of 40% at the regional consortium, have we seen an improvement in some of the community colleges spending their strong workforce funds? And if yes, which are some of those colleges, and how can we share the best practices with other colleges, community colleges across the state? Because I think there's a lot of good work being done in this space.

And as Department of Finance mentioned, the challenges during the pandemic. So, I really want to see how we can continue to uplift these programs, but also meet the targeted hiring needs of different industries and to make it a win-win for the student center funding formula in terms of the certificate outcomes and things like that.

I agree. Thank you. Yes.

The question is, which community colleges are doing it better and how can we share those best practices?

Yeah. So I don't have data by per district, but as I mentioned earlier, you know, that's something that we're really looking into and drilling down, looking for excellent examples that we can lift up in this area.

Thank you. So, we'll get a follow-up report on that.

Absolutely.

Thank you. Thank you so much. Any further questions? Seeing none. Thank you so much, panelists. Appreciate it.

Thank you. Thank you so much. Next up, we have item issue number four, Calbright College Update. We'd like to invite our panelists up. Ajita Talwakar Manon, President, CEO of Calbright College Amy Costa, President, Calbright Board of Trustees Adi Aguinaldo, Vice President, Calbright Board of Trustees Alicia Rangel, a Calbright student welcome.

Thank you.

Welcome.

Welcome. Thank you and good morning, Member Fong and Members of the budget Subcommitee on Education Finance. As you mentioned, I'm Ajita Manon, President and CEO of Calbright College, and I want to thank you for the opportunity to be here today. For over 20 years, I have dedicated my career to fighting for equitable opportunity and stronger outcomes for underserved communities. And I know that you have, too.

Before Calbright, I had led this important work across American higher education, on Capitol Hill, at the Department of Education, and as President Obama's higher education advisor. Our actions, from historic investments in community colleges and Pell grants to simplifying the FAFSA and launching the college score work hard, were all centered around an education system responsive to the realities faced by students, especially at a time of economic uncertainty. And thats a compass I still carry.

I came to Calbright in 2020, inheriting a fractured organization, experiencing a state audit and struggling at the earliest stages of building the innovative model that adult learners needed. At breakneck speed. We turned that around to build a college that drives learner success, responsive to their needs, their goals, and with the right amount of innovative support to get them across the finish line.

I'm proud to say I now have the right team of student success, learning and instruction, workforce, technology and data experts to refine and scale our work for greater impact statewide. The Chronicle of Higher Education said it best Calbright is hitting its stride. Under my leadership, we received accreditation more than a year ahead of schedule, validating the quality of our model. Our enrollment increased to 800% to over 4000. We boosted completions 400% to nearly 600 completers.

We've ratified contracts with our labor unions, represented by CTA and CSEA leaders who are with us today. We're collaborating with UC Irvine School of Education and Behavioral designs firm ideas 42 to test student success, methods that increase program progress and their working. We've now serving students in 52 out of 58 counties in California, including 34 rural counties. We've designed and validated 17 programs responsive to evolving demands in our economy and positioned for learners without a degree. And we addressed all recommendations per the state audit.

We sit in service of the system's 2030 roadmap, upskilling adult learners in an equitable manner and as a driver of this goal. Calbright's actions are guided by the learners we serve. 70% of students are BIPOC, one third are parent learners or caregivers, 42% are unemployed, and 53% have competing work responsibilities. Alicia Wrangle is one of them. Alicia, who is here with us today, is an IT support student at Calbright and a Member of the student body organization.

She also works full time for a nonprofit at a children's hospital in Oakland, a job she landed after revamping her resume with Calbright's career services team. Her progress is based on skills, not on semesters. Just as their daily life does not fit a traditional higher ed model where students are expected to show up at 02:00 p.m. In the middle of the workday, that is what Calbright solves for, but we can't do it alone. Supporting students like Alicia requires smart, collaborative work beyond higher education.

So we've deepened our reach to connect with workforce, economic development, business, and community organizations toward the shared goal of providing more opportunities for more Californians. We're engaging partners such as chambers of Commerce and the Inland Empire Economic Partnership to better inform our regional engagement and with leaders like those at Shasta College to better serve rural communities and as a newly minted state pre apprenticeship provider by the Division of Apprenticeship Standards and an eligible training provider per the Department of Labor.

Calbright is also connecting the dots between students and employers, like working with the city and County of San Francisco to offer paid tech apprenticeships. We're also a part of the Chancellor's office initiative with United Domestic Workers, and we continue to partner with SEIU UHW on Allied Health, a priority for our state, employers, and communities across California facing shortages in the healthcare professions. Now I know you have tough decisions ahead in this budget.

Calbright is the first new community college district in 44 years, a critical public option for adult learners. We're delivering results, and we've spent the past few years building up this infrastructure to be high quality and scalable while remaining student centered. We acted in a fiscally responsible and intentional manner to carry out our statutory mandate in a sustainable and to meet the specific needs of each student as we grow.

We're now spending one time funds in an accelerated manner against a multi year strategic plan to one, invest in scalable technologies that support infrastructure to deliver the best experience for our students two, meet the growing demand for Calbright programs and three, contribute our R and D to drive stronger outcomes across the CCC system. Our resources are critical to building a sustainable funding approach aligned with the flexibility and affordability our students need while reaching more communities.

When I arrived at Calbright, it would have been easy to write us off. But we're a different college than we were in 2020. As our state's unemployment rate is topping the nation, we can't afford to strip access to flexible and free training. For Californians to do so not only harms our more than 4000 students representing each one of your regions who rely on our model, but future students seeking to access this model. Let me be clear. Calbright is the model for the moment we're in.

We're leveraging the best technology, data science, and human powered support to upskill Californians and get them back in the workforce. Thank you for your time today. I'm here today with several Members of my Executive team, our board, and student Alicia Rangel, and we're all happy to answer any questions.

Thank you so much. Welcome. Was that the final presentation? Okay. Thank you.

I think that's all the time you've allotted me. All right.

Thank you so much. Start off with some questions. Thank you so much for that presentation. A couple questions. You mentioned the capital outlay. Why is the college spending $9.7 million on capital outlay?

It's a great question and I wanted to thank you for it because it actually speaks to how we're innovating as a remote college. Capital outlays look really different at a college of ours in the broadest buckets. We're focusing on device lending, a learning management system, our technologies, and multi use office space for students, faculty and staff. And I can go in depth in each one area and talk about how critical those investments are. First and foremost, our students need to be able to access the device

they need to get to their learning material and the student support services offered through Calbright. So we offer hotspots and laptops to students because many of them aren't able to access broadband continuity, including many of our students in rural areas. We also don't have the resource, they also don't have the resources to access those technologies for learning materials and supports. And I also wanted to talk a bit about how our capital outlays were being very thoughtful with respect to our learning technology, specifically.

And I'd love to introduce you at this moment to Shannon, Doctor Shannon Mccarty on our team, who can talk a little bit more about that. She is our Vice President of learning and instruction. She comes to us from incredible experience at Rio Salado College, National University, and a number of other spaces. And she's been focused on this work for some time.

And if I can just interject. Amy Costa, President of the board of trustees before Shannon speaks. Historically, when we created the college and statute, we had always considered that there would be on site supports of some type for our students. That was always part of the estimates that were used to create the college.

I think the board, my Vice President, and myself, obviously, during COVID wanted to be a little bit more cautious about those investments, as many in government had to kind of reimagine what those in person supports might look like. And I think utilizing the data and the time between COVID and now, we feel more comfortable making those investments. With that, I'll turn it over to Shannon.

Thank you. Hello. I'm Doctor Shannon Mccarty. I'm Vice President of learning and instruction. And I would speak to the learning management system, but actually take a step back and speak to the learning management ecosystem that we are building, because we are a very different model. There is not an off the shelf learning management system that fits our needs.

And so it will require customization to really do a true direct assessment, competency based education model that requires being able to tag very thoughtfully what skills students are learning to their assessments, to the opportunities of those learning assignments, and then being able to monitor student behavior so we can intervene as needed as they are progressing in their program.

And so there's a lot of infrastructure that has to take place really looking to the data behind that infrastructure, being able to visualize that data, being able to automate and integrate interventions and strategies, but then also being able to really create a system that allows students to progress at their own time and at their own pace.

Thank you. And in the report, it also mentioned that nearly half the students withdraw. What is the Calbright College doing to lower the withdrawal rate?

This is a great question, and something student progression success is, is something that I've been preoccupied with for many years now. As a team, we're actually very laser focused on how to continuously connect, connect to, and support our students based around their needs. So with a community of learners who has traditionally fallen out of higher education because we haven't had sustained efforts to build and design for what they're needed, we're very focused on supporting progression to and then what we're doing there to see results.

And that's why, since 2021, we've actually experienced decreasing withdrawals in a way that has been very significant for us and very uncharacteristic for this community of learners across higher education. And with that, I will bring up Don Orth, who comes to us from Apple, is our Vice President of student services and success to talk specifically about across the student lifecycle, the many activities and actions that we're taking to support not just enrollment of students, but also their successful progression and completion.

Thank you. Good morning, Committee. My name is Don Orth. I'm Vice President of student services and success. Let me lift that up a little bit. And so, withdrawal is something we look at a lot. And really, ultimately, we're trying to meet students where they are. Our average student is around 40 years old. They may be decades away from formal education. And about 40% of our students don't have kind of a successful online education experience.

So there's a lot of, kind of scaffolding we need to build to help get them ready for learning online with Calbright or any other institution. So there's several things we're doing. I can give you a few examples of how we are working to lower withdrawals. One, starting from the beginning, the onboarding process is critical. Students don't always know they love the promise of Calbright, but they don't always know what it looks like.

So we spend a lot of time making sure we match our students with the supports and the structures they need to be successful. For instance, if they're not used to online learning, we provide digital literacy kind of work and scaffolding to help them build those skills needed to learn online. A second thing we do is look at basic needs. We try to understand basic needs and wellness. These can be barriers to success.

If students aren't balanced and don't have the basic needs just for living, they're not going to be successful, kind of in their learning experience. So we match students. We make sure they have what they need to be successful. One other thing we've done, and this is in collaboration with UCI and Ideas 42 partnership. And this is kind of research work that we do. We've introduced the idea of. We've introduced scaffolded timelines. These timelines basically match students the time they have to learn.

They're very busy adult learners, and so we basically ask them, how much time do you have to learn? How much time do you have to dedicate to this work? And then we partner with them to make sure that we guide them through, because there's a lot of competing priorities. And so we want to make sure that they have the support they need in the time they need to complete. And the last piece is counseling career.

About 80% of our students say that they come to Calbright looking for career change, either to upskill or change careers altogether. And so we work really hard to bring our career services and counseling team in to work with students right from the start to prepare them for career changes such as resume work, practice interviews, and preparation for jobs. And I wanted to pass it to Alicia. Maybe you have some experience with our, with the career services group.

Hi, everyone. I'm Alicia, and I'm very new to this type of situation, but I'm very grateful for the opportunity. I would like to say this opportunity wouldn't have been given to me if I didn't, you know, start working with Calbright, being a student at Calbright, and just all in all, getting the experience to work with people, like, so knowledgeable, so incredible in this type of work that Calbright offers us, which is, I'd like to say my job I currently hold is very dear to me.

Nonprofit at the UC Benioff Children's Hospital in Oakland. Before I worked there, I worked at a dog daycare. So you could see, like, where the. Where the difference is in that job and then this job that I hold now. And that is thanks to an instructor that helped me in the career services, specifically with writing my resume, because I feel I came to another state from a very small town in Texas. So I came here knowing absolutely nothing.

I didn't know how to write my resume. I was only 18, and I'm from a family who, I'm the first person in that family to really go to college and get to experience something like this. So just being able to finally get that help and information that I needed to fill in that gap that I was already missing is a completely 180 on how my life ended up within this last year of being a student at Calbright, specifically tutoring the resume writers, career services, counseling.

There are so many resources that I was offered within my first day of just signing up, somebody was calling me, somebody was emailing me, telling me, hey, let me help you with the rest of your application. Let me help you with your onboarding. I'm like, again, I'm the first people in my family to ever go to college. So it's kind of like, zero, what is, what is onboarding? What's this kickoff? What's all this?

You know, all these people contacting me from a school, and I had very little experience in a community college or college setting. I know it's a lot more faster paced in person. It's a lot more. People are intimidated to go to the counselors, people are intimidated to be in that type of setting, whereas Calbright offered it to me right in my hand, like right in my computer.

And that's something I was very grateful for, because, first of all, I was in California with no money, working at like a little dog daycare. So it was just a complete, big flip, a complete change for the better. And I just want to appreciate the people who helped me write my resume, too.

And just to kind of close this out and connect the dots in a way that I think is really important. Don gave some very specific examples to give a tangible sense of the types of interventions that were engaged in supporting Alicia as a recipient and participant in those activities, shared a little bit about, contextually, her experience. But I want to connect the dots on something else, which is we look at it very systematically across the lifecycle.

So when we think about the dollars that are invested across the student enterprise and with respect to student facing activities, it is not a matter of throwing spaghetti at the wall. We methodically look at ways to pilot, scale, and test interventions and to then to not just quickly implement them for a small group of students, but across the board. We talk about the deep work and partnership work with UCI as a primary way.

We address things like withdrawal rates or slow progression for our students, largely because what it allows us to do is to have the capabilities in house as an organization to be able to do things like understand our students, tell us they need to have flexibility, but also flexibility is a double edged sword, and they need structure. And so putting ourselves to the task of solving the challenge of the balance between flexibility and structure, we implemented scaffolding schedules.

Now, we did that over a couple month period, and within six months, they were across all of our programs. And this is the. The rate and the pace of the change and improvement and the direct impact that that has on progression and outcomes is what we're doing to address withdrawal rates. But it also is why we're unique as an institution. And these lessons are not just unique to Calbright.

These lessons have the benefit to solving this challenge that is being experienced system wide and across American higher education. And I'll just highlight, this is a problem other states are having as well.

And when I speak to Republican and Democratic colleagues in other states who are trying to solve the specific challenge of the more than 40 million Americans with some degree, no college, without access to a meaningful entry point into the labor market, you know, we're in good company in California, but most importantly, we're leading in this space. And folks are looking to us to be able to share out what we're learning more broadly.

Thank you so much. And thank you, Alicia, for your testimony. I have a question for the LAO. If the LAO can come. Come up to the table plates.

Sorry to bring you up. Thank you. Just a quick question. As we heard, in terms of the budget deficit, some of the spent funds, and some of the categories that we just went through, and some challenges around a completion rate, do you think the other 115 community colleges can do what Calbright is doing?

Do I think that - so, Paul Steenhausen with the Analyst's Office - you're asking if other community colleges can do what Calbright's doing.

Correct.

So currently, the actual programs that Calbright offers do have duplication with some programs offered at the other colleges. Cybersecurity, for example. Now, so the content can be similar. The way Calbright is teaching it through this competency based education approach is somewhat different from these colleges. The colleges have a much more traditional approach. With the semester you start and you go 17 and a half weeks, and you have midterms and finals and that sort of thing. Calbright has more of an open ended approach.

And I think that it remains to be seen which is the best approach, because if you look at the semester approach, kind of the downside to that is you can't necessarily accelerate with a semester approach. You can't say, well, I'm ready to take my final right now. They say, well, no, you get to wait for the end of the term. So that's a downside.

An upside, though, to a semester approach is you have classes at a certain time, or you need to get your work in by a certain time. Even if it's a, even if it's a credit course that's online, they might say by Sunday at midnight, you must get your work in. Otherwise you get an F. Calbright doesn't have that kind of approach in general. And so that can be good, because you might have some motivated students who have time on their hands that it can accelerate.

They might tell you it's got some challenges as well, because you need that student to progress. It's best for that student to put in the time. I mean, ideally put in 10-15 hours a week. Five isn't very much. That student's going to take an awful long time to finish if they're only devoting 5 hours a week to a certain program, and that can extend on for months, and then life gets in the way. So I think that's something legislatures should be thinking about, is the competency based education, the pros, the cons. Does it make sense to require the students to move at a more, at a swifter pace? And that which approach is really best from the legislative point of view.

Thank you for that. I appreciate that context and I'll pass it over to the President, but also in the context. So I think the LAO will touch upon it. But how do Calbright's courses differ from the more traditional campuses and the competency based approach?

Yeah. So the competency based approach is fundamentally different, largely because it is also combined with asynchronicity. And what that means is, when I keep saying flexibly paced, it means that students can progress based on the time they have available and balancing the life realities that they have.

Alicia can have her job at the children's hospital and still manage her coursework in a way that is disconnected from having to have her show up in the classroom, either virtual or physical setting, and that flexibility is significant and important. The other piece of that I think that has to be mentioned is that when we talk about a traditional model versus a competency model, we're also talking about time spent in a seat completing requirements versus a demonstration of mastery.

So what positions students in a model like this best for actual workplace success is that they get practice in our institution, not just acquiring new skills, but demonstrating what they can do to the employer, for employers and prospective employers. So that becomes an important part of distinction. But I say that really valuing my sister community colleges. And so what I mean by that is we have to figure this out in the system, and that's why we're excited to be a community college within the system.

I think it is very clear that the reason that we took the approach that we did in terms of the structural design of the college was very much about having a differentiated approach that was designed around the customized needs of the learners. And I think you brought up a great point, Paul, which is, how do we do that on balance and still adhere to the scaffolded support that's needed. Right.

How do we not do what MOOCs have done in the past, which is suggest that democratizing access to the content is going to be enough. And we do that through a very support forward model. We do that through a model in which there is both optimized technology, but also real human touch and interaction to support a student through to that goal. And we do it the whole time, allowing them to sort of practice with the technologies that for some folks, they have never had exposure to.

And if I may, and I just want to kick it up, like, to more of a 30,000 foot view for your consideration, is higher education is really at an inflection point in the country, and that's driven by demographics, specifically here in California, as well as the pandemic, changing student expectations and frankly, desires around higher ed. And I don't necessarily think that there's going to be a duality between the traditional road and competency based.

I think California has a long and strong history of being innovative in higher ed, of being, you know, really kind of the model in the country and frankly, the world. And I think we're continuing to do that by offering students, given the diverse amount of students that we need to serve in this state, several options that are public options and that are priced for full participation by all Californians.

Thank you so much for that context. President, go ahead.

I did notice something in the analysis that I do think it's important to consider and clarify, especially with regards to Paul's comments, that there's some overlap in content areas between what we do and what other colleges may also be exploring. I want to be very clear, every time we create a program, we do an extensive analysis on the labor market need and current production in the system.

So where there is a scale mismatch between the certifications that lead to particular types of job roles and the availability of what the current system is currently producing, that becomes a very important kind of baseline understanding and important thing to balance with respect to making sure that we're always complimentary and always adding value to what the of the system is doing and producing. I think it's also important to remember we're also expanding the access to skills and certifications in areas of the labor market that are not just relevant today, but that reflect what the changing conditions of the labor market are.

I was actually connecting with some labor market economists and micro economists last week, and we were talking about what's happening in the labor market itself in terms of the dynamism in the labor market with the onset of new technologies and the ways in which the skills requirements in the actual hiring market are shifting and changing. And so in higher ed, we like to look singularly at programs, and we think the program leads to a very specific job. And in fact, what we're learning is that there's a set of skills that has to be cultivated, especially for our students to have an access point that is not just about the single certification that they have, but prepares them to navigate a series of different labor market opportunities.

And to put that in more concrete terms, when you look at the cluster of 17 programs that we have designed and validated, what you will find is in there areas of the economy that are growing and they are in positions that are new technology, and the certifications themselves are actually calibrated to skills demands in the labor market. And so we go through a very extensive process around that. And the one part that's standing out in this moment is a recent action that our faculty Senate took to really integrate a set of durable skills as a part of the experience that students get in every program.

And why that's significant is because if you ask labor market leaders or insight providers, whether it's Lightcast or LinkedIn or any of the folks sitting on large amounts of data and understanding about where skills are going and what the right access point is for skills, you will find that these are the skills that our students are going to need the most practice having in order for them to be able to directly access that job in the hiring market.

And so we're not just paying attention to that. We're moving that research. We're moving in a very tactical and actionable way. And in a way, I think that we're happy to share out. We don't feel any pride of ownership over what we've created. It's really important for us to be able to continue to share that out with colleagues in the system. And in a lot of ways and in a lot of places, we're already doing that.

Well, thank you for that context, and thank you for sharing those best practices. I think it's critical to, you know, we're trying to uplift the experience of all college students in California. And so the work that you and your team have provided here today. So appreciate that context. But then, thank you so much, Mister Chair.

Thank you. Thank you for the presentation. I have a few questions, and if you haven't already noticed, I tend to jump around a little bit. So pardon that, but as questions come up, I like to make them. One that just absolutely catches my attention is on page 28 of our report, and it has to do with the budget from Calbright. I don't think this is typical, but that's why I'd like to get some response. The academic salaries make up 3 million out of the total expenditures of 17 million.

Granted employee benefits, you'd add those, too, but those two combined aren't 50% of the annual budget at the 17 million annual expenses. And then you used, I think, prior year balance for the $50 million budget, which, again, academic salaries only accounts for a fraction of that. And then there's this very large $23 million expenditure on other expenses. And I'd like to understand, one, why are the salaries such a small component of it? And two, what are these other expenses that are not outlined in the budget?

Absolutely. I'm happy to go into both, and I'll take them in the order I think I heard them in. The first one you mentioned is the proportion of salaries that are spent on a narrow definition of what conditions academic success, which is faculty, specifically instructional salaries. I think two things. One is that is an area where we actually have not yet, you know, a lot of institutions, I heard you talking about it in the item previously.

A lot of institutions are having great difficulty in balancing a 1965 rule and consideration and definition with respect to what the needs are that they're trying to meet for their students historically. We have sought - in a large part of the way that they typically do that is through other categorical funding, which we do not currently draw down.

So while we're in this period of our development on an ongoing side of things, we're focused first on building and designing the model that is going to best condition student success. And what we know that is, that definition from 1965 actually needs to look and evolve to accommodate all of the things that condition students success. And that's particularly unique in a digital environment.

If we're talking about successful outcomes for underserved communities in online experiences, we have to be talking about support first, and we have to Fund the model that way. And additionally, I think we have to continue to acknowledge that what is student facing looks different.

So let me ask, where are you in the process of identifying that model and what that model looks like?

So we have an operating model around it. I think we're continuing to look at how do we apply technology to scale it in ways that are most cost effective. I think we're looking at ways to refine the student throughput and to continue to improve the throughput. And we see a direct relationship between the interventions that we take, like ones we took in 2023 and the effect that they have six months later, and moving the needle on that. So we're continuously working towards that.

So your non academic salaries, I'm assuming, because this budget is very limited in terms of what the details are, at least what we have before us. That's where you're spending a lot of the resources on support systems for students. That are helping you make this model that you described help you be successful.

Yes, our direct, technology supportive students, you heard Don say and mention the fact that a number of our students come to us without any prior experience with or access to digital resources. And so that is programmatic time and investment that goes in for our students. Our student, our tech division actually spends a lot of time directly supporting our students career services is not counted in the current definition of narrow academic salaries, et cetera, et cetera. But.

So let me ask, how many students were enrolled in the year that you spent the three and a half million on salaries and 8.4 million on non academic salaries?

I can get you the specific number, but I believe it was around 3000 something. But I will circle back and get you the exact numbers for that budget here.

And in our report, we've got a sort of summary of what's been accomplished to date, and we've got issuance, I think, of 556 certificates.

We're actually just under 600 today.

So around 600 certificates. And in earlier questions by one of my colleagues, you talked about how you focus on programs that are not, perhaps being offered - market driven programs. Are all of the certificated programs, then should it be our understanding that they are not being offered by community colleges today, at least not in an asynchronous way.

Not in the format we're doing it and not with the access point we do in the way we deliver it. No.

So all of those certificated programs are not offered asynchronously? Is that a word.

It is.

And at any community college in California?

No, not that we're aware of. And it should be important to note that actually, pursuant to our statutory legislation, the Chancellor's Office does an annual report to the Legislature with respect to the evaluation of duplication. And one other related point is that this was a matter for investigation during the course of our comprehensive state audit a couple years back. The Auditor themselves confirmed that the structure and nature of our program differentiated it significantly from anything that's currently offered in the system.

So that's how many have been issued. But according to a report, you only have three programs available. So how many certificates - are all the certificates offered only in those three programs.

So we'll talk about the implementation cycle. So there is three programs that are currently open for enrollment. Cyber will, including Cyber, will be four over the summer. Data analytics, which is in a pilot phase and will go from pilot six months later to broad open access. That's how we launch all our programs. And then we have 17 that are actually already on a launch timeframe. Right. We have the launch codes in the timeframe for when they were launched over the next 18 months.

And you're probably wondering why that pause exists between when we first designed and validated those programs and opening them up for enrollments. And the cycle of that was takes time for two reasons, both of which are a little bit out of our institutional control. One, during that period we went through a process of accreditation which requires us to actually pause on the launching of new programs for the period where the accreditor evaluates us. We achieved our accreditation in the summer of last year, as I mentioned in my remarks, a year ahead of schedule. Now we are going to the place where with our 17 new programs after they leave us.

And I explained that maybe comprehensive process by which we design and validate those programs to make sure they're relevant and structured to set up students for success, they are passed through our board and following passage to the board, go to the Chancellor's Office for approval and then go to the accreditor for approval before we can launch. So a number of those programs are in a different stage of that pipeline. Finally, we are moving to, as Doctor McCarty mentioned, an LMS and a content management system that is keyed into our launch sequence for the coming year. And so you will start to see, you know, within the next 18 months, the launch of all those 18 months.

Let me try to focus us on in the next 12 months. Not that we don't like to think long term, but this is a budget discussion about the next year. So in the next year, how many of the 17 programs will actually be up and running with students eligible to be enrolled?

I do not have that in front of me.

Is it one or two programs or is it like five to 10 programs?

It'll be five to 10 programs for sure. I can get you the exact kind of sequences there.

Okay. If you're essentially tripling, quadrupling, maybe more, the number of programs, I'm assuming you anticipate to serve more students.

Yes. Part of our enrollment growth, we're hoping will be contingent on the launch of the new programs.

Okay. And yet the draft budget that we have before us continues to maintain your academic salaries and your non academic salaries at the same rate. How is it that you're gonna grow without any additional expenses?

It's a great question. So we are unlikely to see a significant change in our academic salaries in our ongoing kind of steady state budget with the launch of these new programs. And part of it is how we launch new programs. So the one time funds, as designed by the statute, are used to create new programs to understand what the needs and requirements, including subject matter, expertise, are going to be.

As we get to that point, then we begin to understand what full time faculty hiring is going to be important to, to put into place on a permanent basis. And that becomes very important because as you know, once those positions are created, they are in for the long haul. And so you've seen -you have seen a growth in our faculty ranks over the past several fiscal years, kind of consistent with that approach and strategy. But we don't lean into the full time hire before we have validated a program is going to stay with us and grow and demonstrate the outcomes that it needs to demonstrate.

I'll just share with you.

So we'll see eventually a growth in those academic salaries on a more permanent basis. Absolutely. There will be more faculty hires.

Yeah. I wanted to share with you that you're telling me you're launching up to 10 new programs and your budget is not changing from one year to the next. That leads me to then think at some point, either the budgeting here is way off, or the expectation for the Legislature, which funds this and for state, which funds this, is that this program, the cost for this is going to continue to grow.

I like to know what the programs are that you are thinking of launching prior to adoption of this year's budget, what programs you're looking to launch, when they will be launching, how many students will be served in those programs, and an updated budget to be reflective of that. Because if we're going to make this commitment, we need to know what the commitment really is. And I'll just tell you right now, it's not very clear what that commitment is.

It's just allow us to continue to plan and to try to bring on board programs that we've been planning for now for some time. And so in a year when resources are incredibly limited, not just this year, but on the out years, making those commitments or potentially creating a situation where you are committing to doing something that we might not be able to afford is really, will be very difficult for us. And so I think it's time.

There's been, there's been time, and I understand what's happened in the last few years, and I know that there's been some very - elephant in the room. People have been very direct in how their feelings about Calbright. I came to this really without any strong feelings one way or the other. But I do think, as you've heard me question others in terms of their programs, what is the value? And at some point, you've got to make a decision that there's value there or there isn't.

And I think the time has come to make that decision. Understanding what, you know, if we can expand access, I'm all about that. Students who wouldn't have otherwise have access in programs that otherwise don't exist where the demand exists. Totally supportive of that. But we need to know what that is and what that return on that investment is going to be. And it can't be. We're still studying, we're still modeling, we're still figuring out. We've got to know what that is.

And I think the time has come for that. So that's what I'd ask of you in terms of data. You heard me ask data on nursing programs. We're asking on all this because we need to know how we're going to, yes, address the crisis this year, but also really looking to the next year and how we're going to address the crisis that, unfortunately, will continue. So those are, I think, my only questions on this item.

Appreciate all of you panelists and look forward to your response before we take budget action. So with that, we come to the end of the panels, and as promised, we now have an opportunity for agenda comments, not, sorry, public comment on items that were on today's agenda. Certainly interesting your feedback on specifics, on ideas, on further questions that arise. To you who follow this, I will ask if you have already made a comment.

We gave you that opportunity at the beginning, so please let others who have not made a comment make a comment now, and we'll give you at this moment, all of you, 1 minute to share your comments. So please state your name and proceed.

Thank you. Chair Alvarez. My name is Larry Galizio. I'm the President and CEO of the Community College League. And just going back to the funding formula discussion, you made a very astute observation. You asked about 50% law. 1961 was actually, when that statute was created, it was really focused on K-12. I would just encourage you to continue to look at it. If you were going to create an automobile, let's say a Tesla in 2024, you wouldn't put an eight track tape in it. So appreciate - we're eager to continue that conversation and look forward to working on the funding formula. Thank you.

Thank you.

Tiffany Mok with CFT - Union of Educators and Classified Professionals. Wanted to state that to the extent we are opening the discussion on the 50% rule, we are very open to discussing that. It was contemplated and adopted for many reasons and discussed during SCIP. We also wanted to just say that, you know, to the extent that you have those, that the statistics show that there's been a decrease in faculty funding and that we want to ensure that we have student supports.

But the students go there for an education and that education is as worthy as all the education that we've provided students in the past. It is the only factor that keeps classes small so that students can have that individualized experience that is ever more important as we grow in this world of AI. Moving to other topics, CFT also - to the unspent funds, works to reduce the barriers part time educators face in meeting student demands and needs. This includes working towards including students to have access to part time faculty office hours which are not currently reimbursed beyond 50%. We hope to have that reimbursement at 100% level. We also further hope to increase the number of full time faculty that students can access generally.

Thank you very much.

Anna Matthews with the Faculty Association for California Community Colleges wanted to thank the Legislature for their support of nursing bachelor's degrees. Regarding the SCIP, there is a lack of parity inherent within the formula. There are clear winners and losers, which is not something that should be the case for a functioning funding formula. The supplemental allocation does not reflect the consistent poverty rates across the state, and the success allocation reflects only a very narrow scope of what the California Community Colleges do outlined in their mission. Regarding the FTES metrics, the average student at community colleges takes 88 to nine units, but an FTES is equivalent to 15 units. So we're having to split one student's worth of funding between multiple high need students. So thank you for bringing up this issue.

Thank you.

Chair Alvarez and Members. David Hawkins with the Community College Independence Faculty Union. First of all, Mister Chair, thank you for your comments on Calbright and the question for additional information . In regards to the 50% law, there is a state audit that will be issued in in the fall that's looking at 50% law compliance. They're also looking at growth in administrative positions and salaries. The Administration, Chancellor's Office, and District Administration complain about they don't have money for programs. We think it's rather absurd.

First of all, the 50% law, if you incorporate categorical programs, we're talking 37% of the budget that's going into instruction. Secondly, during a period when we've had a decline in student enrollment, administrative full time positions unrelated to student outcomes or student services increased dramatically during the same period. Finally, your own analysis reports on it. You have budget reserves. One out of every four districts right now has budget reserves in excess of 40%. In the past four years, the total amount of reserves is has increased by over $1.0 billion.

Thank you.

Thank you.

Good morning, Mister Chair. Malik Bynum with UDW/ASFME Local 3930 representing over 171,000 home care and child care providers throughout the state. Rare appearance for us in sub three, but we're proud to be here to echo the comments made by our chancellor's office partners and uplift our joint proposal to fund the ongoing partnership between UDW and the Chancellor's Office.

As you heard, this partnership is dedicated to enhance enhancing educational opportunities for home care providers, child care providers and their families with the focus on empowering underrepresented adult learners in ways that aren't just wages and benefits. With the first year of this program, including funding from the strong workforce program, we're here to request $5 million for year two and year three of this partnership to fully carry it out. And with that respect, request aye vote.

Thank you.

Or your support for this proposal as it moves through the budget process. Thanks.

Thank you, Chair and Members. Mark Mac Donald, on behalf of the Los Angeles, San Diego, Southwestern, Contra Costa Community College Districts. Thank you for teeing up the conversation on the funding formula. I really think that's going to be the conversation for the next year that we're going to need to focus on. On the summer shift, community colleges aren't compulsory, so we don't know what our student demand will be until after we have faculty to cover those positions at the end of the year. So really, I agree with you, Chair, that this needs to be a long term discussion and not something that's done while or after districts make their budgets. Thank you.

Thank you.

Chair and Members. Good morning, or good afternoon. Ryan Storm, on behalf of the Cal State University system, I'm here to talk today about issue number two, nursing proposal. We thank the Administration and the Legislature for the language related to the $60 million for community college nursing that includes community colleges and CSU partnerships.

And we have provided the Committee staff with language to strengthen the progress of those partnerships as they have been a proven strategy to improve nursing pathways with 13 CSU campuses and 33 community colleges, those programs already in place, and we're looking forward to working with the Administration and Legislature on this issue in the future. Thank you.

Thank you.

Good morning. Chair and Members. Stephanie Goldman, on behalf of the Student Senate for California Community Colleges, representing all 2 million community college students, including Calbright students. Calbright provides a unique learning experience that's otherwise not supported by the system. We're seeing parents, full time workers, and other student populations who cannot attend traditional colleges benefit from it. The alternative to Calbright is not a brick and mortar, but rather a predatory, fully online for profits. Beyond Calbright.

While our students are primarily focused on affordable student housing in some form of implementation of Cal Grant reform this year, we also support the nursing bachelors as it would benefit significant number of students by making us becoming a registered nurse more equitable and accessible to low income and especially students in rural regions. Community colleges educate the largest, most diverse higher education student population in the state, and it's imperative that we continue to be fully funded even in times of deficit. Thanks.

Thank you.

Hello. Good afternoon. Wendy Brill-Wynkoop, President of theC. I wanted to note that the 50% law only applies to unrestricted general funds and other funds, categoricals are that are earmarked for initiatives from support services and other student basic needs are exempt from the 50% law. The 50% law protects our primary goal of instruction, low class sizes, high quality teacher student engagement, and also helps improve student outcomes.

We have concerns as faculty about unlimited administrative growth if we didn't have the 50% law, and we prefer to wait for the audit and a study to look at it before there were changes to the 50% law. And then quickly the districts could expand competency based education and asynchronous model if there were the same rules that apply to Calbright as apply to the California Community Colleges in the non credit space. There are some attendance accounting issues that keep us from being able to expand, so it's something you might want to consider. Thank you.

Thank you.

Chair and Members. Austin Webster with W Strategies on behalf of the California Community Colleges Association for Occupational Ed, which represents all the workforce, instructors and administrators throughout the entire system. We're supportive of the Administration's proposal for funding for allied health and nursing programs. We would also just to comment on some of the conversation today about the unspent fundings in strong workforce over the prior couple of years. I want to caution the Legislature as they look at sweeps.

Many of those dollars are already allocated for, and we're just waiting for the chancellor's office to distribute them out to our colleges and programs. And then on behalf of the Academic Senate for California Community Colleges, would urge you all to continue providing funds in support of the open educational resource initiative, potentially looking at maybe even zero textbook cost program as a fund shift for that opportunity. So thank you very much.

Thank you.

Thank you. Chair and Members. Ashley Walker with Nossaman on behalf of Citrus College, North Orange County Community College District and Mount San Antonio College. We are supportive of the budget proposal for nursing, as well as the bills that work in tandem with that budget proposal. We appreciate the discussion about the funding formula.

We are concerned about full implementation of SEF, of course, and we urge consideration of using a three year average for colleges who are declining for enrollment but using current year numbers for those who are growing. And we'd also like to urge retaining all strong workforce funding, as has been noted by many of the other commenters. Thank you for your consideration.

Good morning. Sabrina Means with Capital Advisors on behalf of Pasadena City College and El Camino College. We appreciate the Legislature's early budget actions that made no significant cuts to community colleges. However, there's still issues that are affecting our district districts, most notably the expiration of the student centered funding formulas hold harmless provision. This provision has protected many colleges from fiscal insolvency. As we emerge from the enrollment declines caused by the pandemic. We urge the Subcommittee to work with the Administration to find a solution that will mitigate additional financial distress from the hold harmless sunset. Thank you.

Hi Molly Maguire with The Campaign for College Opportunity. We want to echo the comments of the Chancellor's Office regarding the reorientation that's taken place as a result of the student centered funding formula. This was always the intent of the formula, and we appreciate that this structural change has resulted in a new way of planning and prioritization. An underlying assumption to the funding formula is accurate inputs. So to the extent that the summer loophole skews enrollment numbers, we would agree that this loophole should be addressed. And finally, we appreciate the discussion that took place this morning regarding the role of the 50% law in diverting funding away from non instructional supports like academic and transfer advising that we know are tightly tied to student outcomes. Thank you.

Hi, good morning. Carol Gonzalez here on behalf of Ed Trust - West to share their appreciation for the cost of living adjustment for community colleges to help keep them afloat. On behalf of Long Beach City College, they really want to ensure that there's a revenue bond for the student housing projects, especially as Long Beach has applied over the last three years. They're really eager to provide that opportunity, but understand that can't happen.

Until so the first 13 projects figure out their solution for their funding. So they're really hopeful on the topic of nursing. Long Beach has an associate degree program on their campus, and they've seen firsthand the need to provide baccalaureate degrees, and they really encourage you to support the Governor's proposal on that. And then Hispanas Organized for Political Equality just really wants to emphasize the Cal Grant reform and how that will impact a lot of community college students and their pathway to transfer. Thank you.

Thank you so much.

Members Kevin Gordon with Capital Advisors group representing Allen Hancock College, Cuesta College and Santa Barbara City College. We really wanted to just point out a couple of concerns that we had with the Legislative Analyst recommendation to reject that augmentation that was going to be focused on nursing.

We think it's vitally important. You guys get, and you've heard plenty today about the critical shortage that we have in nursing across the state, being able to sort of demonstrate that community colleges are really the backbone for the supply in nursing and the progress that's being made relative to the issue of bachelor's degree. These funds are going to be targeted in innovative ways to try to answer some of those challenges. Thank you very much.

Thank you.

Good afternoon. Nick Romley here from Capital Advisors Group representing the Cerritos Community College District today. Just want to echo some comments from earlier thanking the Legislature for avoiding large cuts to community colleges during the early budget action items. I want to raise one issue of particular importance to our district today. That's the state funding mechanism around the affordable housing process projects for students that was part of the 2023 Budget Act.

Our district was judged to have one of the most cost effective and sustainable projects of the 21 that was submitted by the Chancellor's Office. Going forward, we would hope the Legislature would act on that funding mechanism. We stand ready, the project is shovel ready and we would like to move those students into that housing as soon as possible. So we'd ask the Legislature to act soon as possible. Thank you.

Thank you.

Good afternoon Mister Chair and Mister Fong. We - David Nevin with Capital Advisors Group on behalf of the Santa Monica College. We are going to echo the same comments as earlier that we really appreciate the Legislators commitment to making no significant cuts to community colleges in the early budget action. Ideally, we're hoping it stays that way through the May revise and through the final Budget Act.

One issue that we still see percolating up to the top is the student center funding formula hold harmless provision that's set to expire much with some of the comments made by some of my colleagues earlier. There are some districts that are facing some growth right now coming out of massive pandemic related declines, and the sunsetting of these provisions would drastically harm Santa Monica College on the way back up towards reaching those pre pandemic levels. So we just would request that for the sake of equity of the students and being able to continue hiring and employing the same number of faculty, just to take another look at that.

Thank you.

Hi, I'm Anya Elder, the chapter President for the classified Chapter 53 for CSEA at Calbright College. I've actually have had the pleasure of being at Calbright since its inception, and it's been phenomenal to witness our growth over the last few years. I really want to underscore the purpose again of why Calbright was created, and that really is to serve some of the most vulnerable populations here in California who've been left behind in many ways from higher education.

We also know that in times of fiscal trouble, these same populations are typically the ones that get the short end of the stick. It's really important that as a state, that we're able to continue to. To serve these students, but also to be able to create new pathways for future growth in our state and our workforce. Thank you so much.

Thank you.

Hello. Michael Stewart, Academic Center President at Calbright and actually the IT instructor for our student, Alicia here. So I've seen her growth, I've seen her success, and I've seen her move through the course. And just like with Alicia, Calbright's mission is to take the non traditional students to achieve their goals and contribute to our economic and social fabric of our great state. Right. And because of that, I implore you, as stewards of the California budget, to continue to support Calbright as educators. Our mission is to create more equitable, inclusive, and prosperous future for all. Thank you very much.

Thank you.

Hi. Good afternoon. I'm Binh Do, Director of Research, Data, Strategies, and Effectiveness with Calbright College. And I wanted to take this moment just to note and thank our community college partners, including Compton College, with whom we conducted a research study last year. This particular research study was an addressable market study that allowed us to better understand, coordinate with our sister college, understand what the California learners specific needs are, and whether or not there are higher education and skilling opportunities that meet their needs. We also did a regional industry and employer market needs, and together are working to design solutions that work for all Californians. Thank you.

Thank you. Thank you all public for your testimony. And with that, we're adjourned.