Senate Budget and Fiscal Review Subcommittee No. 1 on Education

I'm going to call the Budget Subcommitee Number One on Education to order. We will be welcoming Senator Skinner for today. As the third Member of the Committee, I'm assured that the other two Senators are on their way here. And when there's a pause after they arrive, I will call the role to officially establish a quorum.

This is our 7th hearing of 2024, and for those of you that might not be paying attention, we have not taken decisions, but we are airing every, every single part of the education budget. The major pieces we've done thus far are UC, CSU, student aid, Proposition 98, and we've done just through most things. And by the time the Governor puts out his may revise, we will have aired out every single budget proposal he has in the education field.

And our goal is, with the revised budget coming out, when the revenues are clear, and we're watching every day now as the income taxes are counted, we hope that we have sent messages on what we think should be changes or what we think are important. So then when we go into that last sprint of negotiations between the middle of May and the middle of June, we have given an idea of what our positions are and where we want to go.

And there have been some interesting things, just also, FYI, which is that, for example, we have libraries also in addition to, to education in this budget Subcommitee. And there was a request to pull back library money, and it turns out the grants had been made, people were under construction, and the finance Department came to the microphone and basically intimated that they would look thoughtfully at that. And in the revised budget, probably not pull that money back.

And so those are some of the things that are happening in these hearings. And today, the major topic is the community college system. There's four discussion items on the agenda that cover major budget issues. And in the first item, we're pleased to have the chancellor, Sonia Christian, here. And then items two through four, we'll consider apportionments, enrollment, and student housing, respectively. We'll also have representatives from the chancellor's office, the Department of Finance, and the Legislative Analyst.

And I should say that we will take public comment, but it will be after we hear all four items, and I will assess how many people are here to decide if we're going to limit it in any way.

And I would just let anybody know that feels like they're watching, they couldn't make it, or they actually have 10 minutes of comments, and I'll probably give them one or two, that you have the ability to write the Committee Care of the Budget Committee, or go onto the Senate Budget Committee's website and engage through that. So with that, we will move on to item number one, which is the community college system update.

And we will have Sonya Christian, the Chancellor of the Community College System, Justin Hurst from the Department of Finance, Paul Steenhausen from the Legislative Analyst Office. And I know there will be additional people from the community college chancellor's office in the Department of Finance to answer questions. But before we move to item one, we have a quorum presentation, and I will ask to please, call the roll.

[Roll Call]

Thank you. We have a quorum, and it's Senator Wilk's defense. He came here and went back to his office, so we know that he is coming back. So we will go in the order that I mentioned, and we'll begin with the Chancellor. And I know that you have taken office since the last budget cycle, and this is your first hearing. We really appreciate you coming. Look forward to hearing from you, and everything will be just fine. So welcome to the Committee.

I appreciate that Senator Laird and Subcommitee Members, and before I get started, we were sort of hanging out outside, and David O'Brien, a Vice Chancellor to my right here, had the proceedings of the Senate Floor. And I truly appreciated the comments that both Senator Skinner and you, Senator Laird, made on Delaine Easton. And two years ago, I was on a boat ride at a wedding in Puerto Vallarta and got to have a conversation with her. And what a remarkable woman. And so I appreciated that.

Also want to recognize a team of community college colleagues who are right behind me. I was surprised to see who we call our regional leaders. We've got eight regions for the community colleges, and these are individuals that lead your workforce and economic development. And they're out here, you know, to let you know they really support all of the commitments in workforce for the community colleges. I have a few prepared remarks for the Subcommitee that would be great.

And I want to welcome Senator Wilk and let him know that when he wasn't here, I at least acknowledged that he had been here earlier and tried to be first. And so, yeah, so we have. It's always good when his microphone's off. We have a full complement, so please proceed.

Thank you. It's almost 10 months in my role as the chancellor of the California community colleges. And what an honor. Previously, I was the chancellor of the Kern Community College district in the Central Valley, and prior to that, President of Bakersfield College.

After completing my bachelor's degree at the University of Kerala in India. I came to California as a foreign graduate student, fell in love with the California Community colleges, which I then referred to as a uniquely American invention. I believe we have a remarkable system of higher education in California, the UC's.

The CSUs, and the community colleges that put equity and excellence at the center of all that we do. Vice Chancellor Wrenna Finche and David O'Brien and I are looking forward to discussing. The key issues facing our system, our students, our communities, our economy, and our. Workforce at today's hearing. And I want to thank Chris Francis for working very closely with our office in the due diligence.

Well, our enrollments are up. We are back to over 2 million students, with the system showing approximately an 8% growth after an all time low. During the pandemic of 1.8 million, our enrollments have seen an increase of over 200,000 students. Thank you to the support of the Legislature and Governor Newsom for the recruitment and retention funding.

It has truly been a game changer. With California's unemployment rate creeping up and the landscape of future work rapidly changing with the greening of industries and the impact of generative AI, our colleges have mobilized.

We are moving quickly in anticipation of the skills and abilities that are needed for the future workforce, to meet the workforce needs of our industries, and also to take care of our workers, who are, needless to say, stressed in the face of the tsunami of changes to jobs they've been in for years. How do they reskill? How do they retain their livelihood for their families?

The answer the California Community Colleges our Board of Governors approved Vision 2030, a roadmap for California community colleges, in September last year. It retains the framework of the vision for success, which you're familiar with, notably keeping the metrics of getting students to completing a degree or certificate with equity, Vision 2030 has made a few additions. It has reintroduced the importance of access, specifically access with equity. The pandemic brought to light the equity fault lines that already existed.

The vast majority of students who disappeared during the pandemic were from minoritized communities. Vision 2030 doubles down on equity and access and calls on the California community colleges to take education and training to those Californians, 6.8 million with a high school diploma but no college credentials, who are stuck in low-income jobs, getting them on pathways toward a credential that leads to a highway job with the necessary support services and safety nets to make this vision of economic mobility a reality.

In our Vision 2030 demonstration projects, we are partnering with labor like the United Domestic Workers and the United Healthcare States Workers as well as with industry partners to expand opportunities via non-credit instructional on ramps and apprenticeship programs. This is why we so appreciate the funding for our ongoing programs like Strong Workforce and the multi year funding for the California Apprenticeship Initiative and the English Language Learner Pathway in healthcare.

We hope to keep these funding levels for next year so we do recognize, we truly recognize the revenue shortfall for California and the tough position you are in. We deeply appreciate that there are no reductions proposed for the California community colleges by the Governor in his January budget. We hope to keep his proposed 60 million investment in expanding community college nursing programs.

We are finalizing a demonstration project that solves for both increasing the representational workforce, so growing our own rn from our communities, as well as addressing the shortage. The demonstration project is shovel ready so we can start implementing right away. We appreciate the Governor's support for continuing to Fund affordable student housing, which is critical to addressing the housing insecurity experienced by our students. Lastly, we hope to keep the proposed 0.76% COLA.

We thank Governor Newsom and his team for his commitment to California community colleges even during a time of revenue challenges. Given our ambitious outcomes driven agenda of Vision 2030, there are a few budget priorities that are approved by the Board of Governors that I must highlight to you. Even with the current revenue outlook, the California community colleges need a statewide common data and technology infrastructure.

Currently, we have 73 technology platforms with capabilities varying vastly from district to district. Some are resourced at high levels and others are not. The chancellor's office gets the data about six to eight months after the fact in order to advance the transfer agenda, and we have an ambitious agenda and in order to let the data flow from our system to the CSU and the UC's to deploy interventions for our students at scale in a timely way to make a difference to the outcomes.

I believe we don't have a choice but to develop a system wide infrastructure and with the rapid advancement of machine learning and AI, which is becoming ubiquitous as well as for security reasons, as bots are getting more savvy in attempting to breach our systems, it is clear that implementing these technologies 73 times at our 73 districts is ineffective, inefficient and not equitably experienced across our colleges, even a small commitment to this agenda would be hugely helpful.

We have also prioritized implementing credit for prior learning as a mainstream opportunity available for our veterans, working adults, apprentices, etcetera. Currently, credit for prior learning is applied at the margins of our operations and has not been mainstreamed. We have two focus demonstration projects, one for veterans and the second for apprenticeship programs. The idea here is not to treat on the job training and college as two mutually exclusive enterprises.

Learning is learning, and the learning ecosystem must be expanded to be able to recognize learning, whether it occurs in the classroom or on the job. We are pleased that the Governor is working on a statewide career education plan with a cradle to career data system. A quick word on potential bond measures before I wrap up my remarks.

There might be a climate bond in our future, and if we do have that, I would call your attention on the issue of climate action and the role of our system and our campuses that we are prepared to play in helping California mitigate some of the worst effects, such as wildfires and power outages. In the event of a climate bond, we have shovel ready proposals for local community college microgrids to enable them to serve as critical community hubs during emergencies and natural disasters.

And this is a place the community naturally converges to when emergencies happen. We also have a second proposal for the climate workforce development by investing in the necessary climate related laboratory and securing the necessary equipment and infrastructure for instruction. In the event that there is an education bond, we have a list of projects where our campuses can significantly benefit from upgrading our facilities to address safety concerns, as well as modernizing our facilities to keep up with current technologies.

For example, addressing climate and sustainability goals to reduce greenhouse gas emissions. Now, mental health has always been a priority for the California community colleges, and we have a proposal which co locates mental health services with the housing infrastructure development for the unhoused in the mental health bond that passed in March. Generally speaking, just a message to you for any large scale infrastructure development and development with equity. Remember, your community colleges are the answer.

We have 116 campuses and 80 centers across California and can serve as easy to access hubs. So that concludes my remarks, Senator Laird. And happy to answer questions when the time is right.

Thank you very much. We appreciate it. And we're going to hear from our other two panelists before we get to questions. So we're going to move to the Department of Finance. Welcome to the Committee.

Good morning, Mister chair and Members of the Subcommitee. I am Justin Hurst with the Department of Finance, and while I will be covering the Governor's Budget proposals for the community college system in more depth on later items, I will begin by noting that this Governor's Budget reflects continued support and fiscal stability for the largest system of higher education in the nation.

It also reflects continued support for the multi year roadmap, which focuses on equity, student success, and enhancing the system's ability to prepare students for California's future economy. This is accomplished through investments such as fully funding a cost of living adjustment mentioned earlier and providing support for the system to continue its growth funding following the pandemic. I will be happy to answer any questions at this time or on later panels.

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

Thank you. Good morning. Paul Steenhausen with the Legislative Analyst's office. There are a number of potential items you might want to discuss in issue one. I'll focus right now on the budget, but happy to answer any questions you might have on other issues. So at a previous hearing, this is February 29, you heard in this Subcommitee about the overall Proposition 98 funding proposal for schools and community colleges and our recommendation that the Legislature consider different and likely additional solutions given the budget problem and revenue estimates.

Now, the Governor's Budget did not include in his proposed budget in January a potential solution of identifying any unused or unallocated funds from past budgets that could be used as part of a budget solution. And our office went ahead and identified hundreds of millions of dollars of unspent funds. In many cases, they're unspent because of insufficient take up by colleges. Some of these are newly created programs.

Colleges just didn't have the opportunity to expend the money or colleges didn't earn the money by claiming it, whether it was growth money or a part time faculty health insurance program and some other programs that were newly created so the Legislature could take funds, unused funds, unallocated funds from prior budgets to achieve one time savings to help with the state budget problem.

With the Proposition 98 problem and doing so, it also minimized disruption to colleges because that money hasn't actually been claimed by the colleges or gone out to the colleges yet on a grant basis. We would note this recommendation is in line with the early action budget package earlier this month, which authorizes the Administration, with Joint Legislative Budget Committee review, to suspend undisbursed past year one time appropriations. So depending on revenue estimates it may revision, the Legislature may find itself needing to find ongoing solutions.

So beyond just identifying one time unspent funds, in thinking about any ongoing solutions that might be needed, we recommend the Legislature attempt to preserve funding for core priorities, including core instruction, support services, aid for financially needy students. And to the extent existing programs are ongoing and an operating surplus exists, there's an opportunity there for the Legislature to generate achieve one time or ongoing savings.

By coming up with options now, the Legislature will be in a much better position to balance the budget and protect its core priorities. Its core priorities and the college's core priorities. Thank you again. Happy to answer any questions.

Thank you. We're going to come back to the Committee, and lately I've been asking tons of questions and I'm turning to my colleagues. I think in this case I'm going to make a couple of comments, ask a couple of questions, go to my colleagues and come back for anything that, that we haven't talked to. So everybody has a fair chance. And in the comments, Mister Steenhausen beat me to it. But I was going to mention that we had a complete and exhaustive hearing on Proposition 98, as he mentioned.

And I think the best way to summarize it is sort of the statement I've been making, which is that because the Governor has a proposal that the Legislative Analyst has called the maneuver that involves $8 billion in this year and future years, and I have been quoting Winston Churchill that democracy is the worst alternative for governments except for all the others, and that I think that the proposed maneuver by the Governor is the worst possible alternative except for all the others.

I just sort of have that as a global statement. But we just aired that out in detail, and then I wanted, before getting to questions, to also address that's not on our agenda because it's going more through the policy route, the issue of bonds, and we have a limited capacity. And it's very interesting because I think that there's three that are competing, housing, climate and education.

And then within education, there's a difference between the houses and maybe internally with Members on each side about whether an education bond would be k through 12, k through 14, or include UC and CSU. I happen to be a partisan for it, including higher education. And the real debate is what we can do within the capacity of the bonds and the climate. One, I just have district issues as a district that got slammed as hard as almost any by the atmospheric rivers last year.

We have lots of things to do, and at the same time I sit on the State Allocation Board as one of the Senate representatives, Senator Wilks is another. And we ran out of bond money in the last education bond. We ran out two or of three years ago, and we have been putting in one year allocations out of the General Fund to keep school construction moving ahead. We're not going to be in a position to do that this year.

So unless there's an education bond, school construction will be really strongly challenged. And so there are those of us that really just see a tough time choosing between those three, given the housing crisis as well, but, you know, for me, education and climate sort of need to happen, but then within the capacity, we won't be able to do everything we need to do for either one. So we have some real difficult discussions coming ahead.

Then on a couple of questions I wanted to ask on the nursing that was mentioned by the chancellor, maybe start with you and see if it's. And I know there's people here from my home district of Cabrillo where I sat on the board of trustees. And when I was on the board of trustees, I hear it's lessened a little bit.

There was such competition because half the nursing students would be from outside the district and half within that people would move to our area in order to wait for, for a couple of years and be on the waiting list and count as residents. And we contracted with the hospitals locally to just add additional slots over and above what the college could provide to maximize what was done in nursing slots. And chancellor, you said you're ready to go. How is that structured? If you had that money tomorrow, how would it be structured to move ahead on the nursing education?

Yeah. The project that we have developed and in fact, the regional coordinators and particularly from the Bay Area, really the thought partners and pulling it together. So we're trying to solve for two problems. One is getting numbers out there. We generate about 4600 associate degree nurses per year, and in three years, can we put out about 8000? So that's sort of the goal that we're working furiously. We are about to finalize an MOU with a Board of Registered Nursing. We're also working with HCAI. I'm not sure what HCAI stands for, but.

Oh, she's walking into the acronym.

Okay. Okay.

No, we have a policy.

Yeah. And rock is you're doing fine. Yeah. Okay. Thank you.

And I know rocks real name. That's not an acronym.

Okay. Yes. And so the solutions that we're putting forward in this particular project to accelerate the outcomes in three years, it's almost. Like doubling the output is to look at first incumbent workers. So if, because we're trying to solve.

For individuals who are in the community, to stay in the community and reflect the communities they serve. So we're looking at incumbent workers within hospitals and developing an MOU with hospital partners locally, regionally. So that's one part of it. The second is clinicals are always the problem. So we're expanding the clinical opportunity by looking at evening and night rotations and expanding our simulation. I mean, the simulations, Senator Laird, it's crazy. Like five years ago, the simulations were those mannequins.

Now with immersive technologies and these goggles. Google Goggles and Apple, you can actually. Be able to do instruction in healthcare in a very tactical manner, which is mind blowing. So we are looking at investments in simulation for that part of the clinical that can be replaced and approved by the BRN.

And the last issue we're dealing with is to find clinical faculty, and that we are looking at agreements with a Hospital where their nurses, who are paid at a higher level than our faculty are to be able to release from nursing responsibilities to become clinical faculty. So we've got a very concrete roadmap to roll this out. We have a person assigned to the project.

We are in conversations with the colleges. And we are ready to start moving. With the support of the Board of Registered Nursing, because going through that accreditation process to get an expansion in the numbers is also one of the factors. Where we're trying to get everything laid. Out ahead of time so we don't have any administrative bureaucracies in our way. When we get started.

That's really helpful. I appreciate it. And I don't know, just for the record, if Finance or the LAO have any comments on nursing before we move on, then the other question is harder. And that is that who knows where the budget's going? Because we're in the middle of. As I said in my opening comments, the tax revenue is being counted now, and even if it meets the governor's expectations, there's billions in a shortfall that still has to be bridged.

And you said you were grateful what was there, but that it's technically an ad, but if you have employee contracts and inflation, it's really a De facto cut because you have to absorb the increases in that. And it's not meaning what happens if you don't get any COLA at all. How do you deal with that across the system? Because that could well be on the table if the numbers are really bad.

You know, Vice Chancellor Wrenna might be able to provide more specifics, but this was a conversation that, when we review the Laos analysis, I was in conversations with presidents and chancellors across the state, and you know very well a good friend of mine, Matt Whitstein from Cabrillo. Yes, the COLA is really small, but it makes a tremendous impact. And we've actually run the analysis on a student centered funding formula with a zero for COLA and a 0.76.

And you can actually see how the districts fall out in their total computational revenue that they get. So it would be hard for us. And it's not saying send alert. I know. I understand that at the end of the day, there are going to be hard decisions that are made. And, you know, we understand that my job is to help you understand the impact on the community colleges, which is your lowest cost investment, to get that workforce that you need. So that's what I would say to that question.

Okay, thank you. I appreciate that. Let me see if my colleagues have questions. Senator Wilk?

I don't know if I necessarily have questions, but I, too, was very happy with the budget when it came out. As it relates to community colleges, I'm a big fan. I was on the board of College of the Canyons for six and a half years, and when I thought I had my bachelor's, my college told me I was short three units. And I actually made those units up at Bakersfield College, which was very, very helpful.

So familiar with your campus, the data thing that's been ongoing, like, forever. I mean, if you go read the master plan, even back when they did the initial master plan, they complained about how difficult it is to transfer from community college to CSU and USC, UC. So just, you know, good. Good luck with that. I mean, I'm a real, I mean, I've been here 12 years, been the same issue every year.

So then on the, on the... on the nursing, I yesterday supported in Committee General Roth's Bill for 15 colleges to do, you know, you know, bachelor's in nursing, which I think is really needed. I mean, so my district's northern LA and San Bernardino counties, with the exception of Santa Clarita, it's rural, million people. No four year public colleges or universities, three community colleges, but no four year. And your zip code should not be an impediment to being able to secure, you know, higher education.

One, and then two, you get your aa in nursing and you have to go get your ba, you leave and you probably don't come back where I think if we're doing it on these campuses, they're more likely to stay.

So I encourage you to make sure once we get that thing done, I hope we do that, make that thing come to fruition, because I think that will really help our local communities because we invest all this money in k 12 for our kids, then they leave and then they don't come back. So no question. The only question I had was already asked by our chair, who does a great job asking questions. So with that, turn over to Senator Skinner.

Senator Skinner, welcome.

Thank you, Chair, colleague, Chancellor, and our other reps from DOF and LAO. What I'm interested in when we still, this is persistent. This is not your... Chancellor Christian you're inheriting this issue of a lower completion rate, and it's not new, and of course it does. Our white students and our AAPI students tend to complete at a higher level, but still not even up to 50%. But the point of my question is, do we understand really why?

I mean, there's, we look at those numbers and we think, okay, somehow we're failing these students. But I'm not sure, and I don't mean to say to automatically assume that, you know, per se not, but do we know yet? Is it that they, these students are, have decided some level of them to go into a apprenticeship type of program or a technical.

There's, in other words, there are many jobs out there now that don't require even the community college degree, that require instead a certification or I've been visiting a lot of new clean energy manufacturing type facilities in my district lately, ones that make batteries safe for energy storage, different ones. And they are all talking about what they need as people who have some ability to work in a lab, say, setting that it is much more. They don't need somebody with a two year or four year degree.

They just need that they have those. And in some cases, it's the skills to work in an automated setting, which it's not clear to me, and this is my lack of knowledge, rather, how much of those kind of programs we offer which doesn't require two years, or whether some of these students that are not completing that may have started at our community colleges have moved on to something like that because there are so many jobs in those categories. So that's one question.

Another question is we've, obviously, we, the Legislature, have given the community college more ability to do four year degrees. Now even the nursing program. Are you getting, are students interested? Do they want that? So I guess what I'm trying to get at is, do we, we, the Legislature can, you know, we start saying, oh, do this or do that, and it may not really be what the students need.

And if our goal is to really make sure that our community colleges are serving students needs to either go on to higher ed or, or to be able to get good paying jobs, do we feel, I mean, I love the vision plan from 2017, but do we feel that we've really honed it to do that?

There's a lot in there. Senator Skinner. I heard equity, you know, I heard, are we doing the right training and the right set of skills and the degrees and then the baccalaureate, the community college baccalaureate. So I would say equity is front and center. In fact, in the new vision, which is Vision 2030, which we just unveiled last year, the entire focus is really looking at jobs.

So that is sort of the shift from looking at, okay, getting students through, but, okay, you get that credential, and then what is going to be that job? So we are including metrics of employment and wage data and starting to track that. You know, for example, when you talk about equity, the 6.8 million was a population that was identified in a report by California competes.

And when you disaggregate the data on basis of race, you see that the majority are black and Latino communities representing that population in Low wage jobs, and a majority of them are women who are in the care economy like home healthcare workers. So there is an intentionality in looking at those communities and through certificate programs, bringing them in and getting that job, the skill set for that job, with our partnerships with industry. So let me say a word about that.

So our, although our entire focus, or most of our focus, is trying to be ahead with industry to predict the jobs of the future. Because, for example, in the Central Valley, the economy is moving from legacy energy, oil energy, into renewables. And when we do an analysis of the wages in the renewable, it's very different. And so when we're looking at those oil workers coming out, it's not only moving from oil to renewable, it's also looking at healthcare and technology. It.

So we are very much precise in looking at what are the pathways that are not restricted to a single sector, because we're looking at where are the good jobs realistically going to be available for these individuals. So that that workforce readiness is important because we're working with industry. But here's the other deal. Even though we are focused on our industry partners, we want to make sure that workers have sustainable skill sets.

So in that regard, I would make the argument that the General education is important as well. So that even though they may get into that first job, it's going to be that gen ed and that degree that allows them to become supervisors. You know, when you're 25 years old, you may be happy to get into construction trades and earn a good job, but what about when you're 32?

So the community colleges now are sort of fine tuning our thinking and saying, hey, we've got employers, but we've also taken care of our workers and getting those gen ed in various kinds of ways to kind of move up to that next supervisory job. And my last comment would be on the community college baccalaureate. I'm a believer in the community college baccalaureate because it's a game changer for place bound communities and being very familiar with the Central Valley, for example, and the Inland Empire.

These degrees are degrees that are technical degrees. So we're not looking at those that are partners in the CSUS and the UC's and independents offer, which are your, you know, degrees in the humanities and social sciences. These are technical degrees. You know, their focus is a degree in the Central Valley on automation, a baccalaureate and automation. There's one on lab technologies which you had referred to. So those, we have waitlists for those programs, and we have been working in partnership with the CSUs.

There was a little bit of us figuring out what does it look like in taking care of workforce needs and duplication? And we worked through, through that. So there's a great collaboration that's been developed with our CSU colleagues, new chancellor, Chancellor Garcia, in looking at how together we can be efficient with taxpayers dollars in addressing duplication, but at the same time, not setting aside workforce needs. That was a long answer.

I want to say, Senator Wilk, that Diane Van Hook is one of my legends in the Community Colleges. And when I started as a President, I looked up to Diane Van Hook for the work that she was doing in Santa Clarita. Thank you.

I appreciate your answer, because I don't want to discount that value of the two year degree completion or even a four year, whether it's the four year at our community college or moving on. I just wondered, and this is tricky, like, when we look at the chart that shows completion rate, that is completion for the AA, for the two year. Right.

So I wonder if we need to ask for some data that would give us a better picture, because if there's completion on other programs that we know are, I appreciate elevating the student to a better, to economic improvement on an economic opportunity, which, of course, is one of our missions.

Also, whether we can include that, it might give us a better picture on, you know, if we really, have we really failed this percent of students or have we, are we capturing some of them in a different way? So I think it might be worth it to add that.

Thank you, Senator Wilk.

Yeah, I actually want to talk about data. I want to weigh in on completion because this is one of my, I haven't been on the Community College Board for 12 years, but to me it's a student who decides when it's completed. I know back then we had a very robust auto program. Nobody finished the program because they all got hired in jobs that they wanted before they completed it.

So we're getting dinged that these students are not completing the program when they achieved exactly what they wanted to. So I mean, we always look at inputs, we don't look at outputs enough on the government side. So that's a frustration. The other thing, and I don't know how widespread this is, but we're very blessed in Santa Clarita because we got one city, one county, one High School District, one Chamber of Commerce, and it's much easier to collaborate.

So I'd say it's been just a little over 20 years ago, we put together an Economic Development Corporation. So it's one third private equity, one third from the County, one third from the City. And as a college, we partnered with the EDC and figured out what our strengths were. And we identified five core industries and we've done very well in terms of workforce training and doesn't matter what the economy does anywhere else, they continue to prosper in Santa Clarita Valley because of that collaboration.

I'm sure it's harder to do, you know, other places because just the way we're set up is pretty easy. But that's something, partnerships between industry and the community colleges to deliver actually in real time because you mentioned the rapidity of change going on. It's just, it's just staggering. But I don't, I'm interested to know how many of those are in the, in the state. And if not enough, is there anything we could do to be helpful to facilitate that?

I mean, you said it exactly right. And that's the conversation we're having. You know, the regional coordinators who are here today is how do we systematize and do at scale? You know, we have areas where there is, you know, examples of great partnership with industry and employers and how do we do it at scale and systematically, you know, sort of making that equity answer happen. By design and not by chance. So you're exactly right.

That's the work that we're doing going back to, you know, the apprenticeship. We are. We are really focused on expanding apprenticeship opportunities, again, in partnership with industry. You can't do it without industry partners. Right. And when I've been at national speaking engagements, California is investing even in non traditional apprenticeships, not just the building trades, but also looking at taking the model, which is the gold standard, and applying it to other industries as well. What you laid out, Senator Wilk, is the roadmap for the work for community colleges. Envision 2030, and we need to do it at scale.

Thank you. Then let me make a couple of comments in closing, two or three questions. One comment is our next item is enrollment, and you won't be here. And I don't know if there's anything. You mentioned enrollment in your opening comments. Anything you want to add before we get to that?

Yeah, I would say, Senator, that it's a non issue at the community colleges. I know last year we were really looking at the significant decline across the nation. Community colleges lost the most number of students. Makes sense. This is our most vulnerable population. But California has come back way better than the rest of the nation. So I have to drop a statistic here. We make up 20% of the nation's community college enrollments, and this fall, we accounted for 50% of the growth.

So I'm pretty confident that we are on solid grounds. And the plan, the Vision 2030, when we look at all of the populations, we are very much in operational details, like dual enrollment, looking at our justice involved Californians, our foster youth, our veterans. And then we have this huge influx of low income workers that for the first time, we're trying to work at scale. So I'm not worried about enrollments.

What I'm worried about is to be able to support these students and get them to the jobs. And that's where I know. And we're going to see return on investment in California when we see that the job scene happening. One last word on this.

AI is changing the workforce rapidly, and it's your community colleges that are going to be able to deliver that AI 101 so that our workers are not going to freak out when they see their jobs being impacted by AI, because we want them to feel confident in this change that is happening. And that's where I'm nervous that we're going to have the enrollments, but we need to have the ability to be able to serve the tidal wave of changes that is required in our workforce.

Well, you see, the thing that's always difficult, and you did a good job of explaining that California's come back better than the other states. But the thing that's difficult is I just instinctively have the benchmark being where was enrollment before the pandemic? Pandemic. And everybody's always excited about how it's coming back, but it never reaches that. And so that's the thing that always concerns me. And then a random question that's connected.

I was talking to one official of a community college that's not in my district, and they still have 50% of their students online and 50% in person. And there's a hunger among the students to have more in person, but it hasn't quite moved there. Are you finding that there's still the struggle in the local campuses on the online versus the.

There has definitely been a change of student behavior. So in terms of numbers, our researcher, John Hetz, just dropped some data. We're about 51% fully in person, and the remaining is between hybrid and online. So the remaining 49 is not completely online. It's kind of split between hybrid, which means they come to campus some of the time. What the community colleges are focused on is support and completion. Senator Skinner brought up the completion and then jobs.

So those are the three things we're focused on, whether that means it is in an online environment or a hybrid environment or on campus. We want to be able to meet the student needs. So, in other words, I'm not so sure that online is necessarily a bad thing. It could be a bad thing if it becomes a gap between us supporting our students.

So with some of the emerging intelligent technologies, we are trying to have the multiple modalities to be available for the students and offer to them in a much more in a proactive way, rather than a student defaulting to what might be easier, even if they might be more successful in an in person classroom. So it's a little bit more of a nuanced response rather than just saying what the numbers are.

Most colleges are trying to get students back on campus through student life and other kinds of communities so they feel connected. And so if they feel connected in community, the chances that they will be more successful.

I appreciate that. And then a comment and not needling. By this being your first hearing, you've missed many discussions and rants about the Student Centered Funding Formula. And it is just very difficult because I think that the colleges that get shorted by the formula, and that's almost everyone in my Senate district, happen to be the highest standard of living in the state and the hardest to find housing and other things.

And so while they're ostensibly somehow in more well to do areas and people think it's logical to sort of penalize them over time, they're struggling right now in finding people that can be professors or even service staff Members because of the high cost of living. And I think it'll just make it a lot worse. And there's a way to balance it out, and it doesn't.

And the thing that's phasing in, in the next few years is to just give no COLA to those schools until the cut catches up with them. And I think that will be painful. And I have always been fine with letting the winners win, but the whole harmless is to allow the losers not to just be dramatically cut. And that's a concern. So I've now said that in front of you then, on the baccalaureate, there's an interesting thing.

I was meeting with one of the presidents in my district who was really taking on a CSU that was a few miles away and proposing a baccalaureate. And I said to her very directly, is this because the CSU was not taking the transfer students and it was being left up to the individual division heads, wasn't sort of able to be leveraged as policy from the top in many ways?

And so the community college students were really being left out in the transferability, the articulation and transferability of units and other things. And I said to her, she proposed a four year baccalaureate at community colleges. And I said, are you doing this to leverage the CSU because you really want it? And she just sort of smiled at me and did not answer. And I assumed it meant both.

And so I was just going to ask in that discussion that we've already been having, what have been sort of the discussions with UC and CSU about duplication and about them sort of having a different policy and acceptance or crediting units that would ameliorate some of the concern that's leading to the desire for a four year baccalaureate Senator.

I would start by saying my own personal perspective is we cannot have a scarcity mentality when we're thinking of baccalaureate detainment. Our Public Policy Institute of California put out a report when I was a new President at Bakersfield College that talked about the need for 1.1 million additional baccalaureates by the year 2030. And so immediately, as a math person, I started sort of extrapolating with, if we continued what we did as we did, we would not meet that goal so to me, there is the need.

The demand is much more than what we can even meet at this point. So that's point number one. The scarcity mentality. When you actually do the math, I think it would make it clear to everyone. It's like, let's just try to get to that, you know, the need and meet that need. So that's one point. Having said that, you know, I've been super pleased with our two offices, you know, at the Chancellor's Office for the CSU.

Their team, the academic team, has been working with our team team, and really, you know, really getting down to what are the issues? You know, what are the duplication issues, what are the workforce needs? And working it out. I mean, is it. Have all the problems been solved? No, but what I'm happy about is that there are conversations and solutions being proposed. An example is that they've come up with a quick process for baccalaureate already approved by the CSU, or green lighted by the CSU.

If another community college is proposing that same baccalaureate, why wait for a six to eight month process? Why just not green light it right away? To me, that's a huge win. They were able to come to that agreement, and so now they're really focusing on the more difficult ones where there is, you know, not full agreement. How do you know? They're deciding to sort of bring maybe a third party in to help unpack the various issues and come up with a resolution.

So my sense is, let's let that process roll and see what happens eventually. The larger question for all of us, you know, in our various leadership roles, is the single thing we need to solve is the workforce demand. California needs to be competitive economically, socially, in a civic manner, and building healthy communities. We've got to meet those workforce needs while we're working through maybe ways in which we had divided up responsibilities before, we may need to rethink how we divide up responsibilities in the past.

So I think we can do a both and as we work through it. But what I appreciate is the way you sort of framed the issues that we're working on. Thank you.

Okay, and then one last substantive question on the full time faculty. We and last year in the budget act included multiple requirements related to full time faculty. What progress is being made over those things that were put in the trailer bills last year?

I can have Brenna answer that question much better than I can. What I would say is my sense of the full time part time is more on my years of experience as a chancellor at the local district, and it's been hugely helpful for us to make strides to not only respond to increasing our number of full time faculty, but also looking at in a way of how can we represent the students we serve in our faculty composition?

And we've been able to do it with partnerships with our University of California and CSUs to build faculty fellowship programs. So when you have an individual who's doing a PhD at UC Merced, for example, or at a master's at the CSU, to be able to come back and internally as a faculty fellowship program in physics or in chemistry, so that we start building the pipeline of individuals who would apply for tenure track faculty positions. So the investments that have been made from the field perspective have been hugely beneficial.

Okay. Thank you. And you clearly have something to add.

Yes, thank you. Chair Laird. I'm Wrenna Finche, Vice Chair, Chancellor.

You might have turned it off, so you should just. There you go.

My name is Wrenna Finche. I serve as the Community College's Vice Chancellor of College Finance and Facilities, and I'm happy, really excited, to share that the Chancellor's Office is completely on track to meet all of the requirements of the trailer Bill Language from last year regarding full-time faculty. Districts are required to report their progress in increasing the percentage of instruction by full-time faculty. They report this each November, and then they report progress made in diversifying faculty. They report that annually, each June.

Currently, our staff are in the process of developing the system wide report that was required by the trailer Bill Language. Where we've got all the data in, we're just kind of going through it and formatting the report. We're totally on track to have that posted to our chancellor's office website by May 30.

A process has also been established and implemented that requires districts to report on the use of full time faculty hiring funds, including the number of full time faculty positions that have been filled and maintained with those funds. And again, our staff are in the process of reviewing all this recently submitted information to kind of fine tune how we're going to verify what our methodology will be to, to go through that verification and develop a policy.

We've been providing substantial technical assistance and guidance to the system through various guidance memos for information available on our website, which we've expanded in this area, and then also providing technical workshops both virtually and in person. The.

Well, let me just say that was actually a very substantive answer, and I really appreciate it. And the one thing is that you're posting it by May 30, and we'll have two weeks before we finalize the budget and if it turns out that there's something that is still an issue about this, we might ask you a lot about it before May 30 to try to figure out how we tease it out before the budget is landed.

Certainly glad to help.

And then I have one last question that is sent from one of my colleagues, and you worked very closely with Senator Grove in Bakersfield, and she just wants to know if you learned when you were in Bakersfield that if Kern county were a state, itd be the fourth largest oil producing state in the United States. Did you learn that?

Absolutely, Senator Grove.

Perfect. I can reflect that to her. Thank you. I'm sure that we have plenty of more things we could ask about, but we have kept you for quite a while, and we really appreciate this and know that we will have ongoing discussions, and this is a great initial presentation.

I have a quick question for the chancellor. Was Bill Thomas one of your board Members while you were there?

Yes.

And how was that? I used to work for him. That's where I came from.

No, let me just say that she already, in her comments, talked about recovery programs.

No, he was a delight to work with. We have the Thomas Roads Improvement Projects. That's, you know, we've got all this construction that connects I five to 99, and he's a force to reckon with and was instrumental in a $500 million bond.

So do you know the story? Do you know the story on that? Because I worked for a Member of Congress at the time. So they have a California delegation lunch every week, and Bill walks in, says, I got good news and bad news. What do you guys want to hear? And they go, let's hear the good news. He goes, I got $1.0 billion more for California in the Transportation Authorization act. What's the bad news? I'm taking $500 million of it.

Yes. And I'm sure some colleagues thought that was generous. Once again, thank you. We really appreciate you being here. Look forward to just a continued relationship as we try to land the budget in what is a difficult year. So thank you.

Thank you. Justin Hurst, Department of Finance. I'll be briefly covering the California Community College's Proposition 98 investments included with the Governor's Budget with regards to the apportionments and categorical programs. So much like the k 12 system, the California community college system is supported by Proposition 98 General Fund investments.

The Proposition 98 apportionment and categorical funding investments for the community colleges that were a part of the 2024 Governor's Budget include the a cost of living adjustment at the rate 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 and 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 select categorical programs and the adult education program, and then finally, and 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 for the budget year. The community colleges portion of this total Proposition 98 withdrawal amounts 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, and I'm happy to answer any questions that you may have.

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

Thank you. Paul Steenhausen, again with the analyst's office. As your agenda notes, community colleges face a number of cost pressures in the budget year. Inflation isn't as high as it's been in the past few years, but it's still above the historical average. As a result, districts will face pressure to provide employees an increase in their salaries to keep up with their own inflation. Colleges, meanwhile, face their own cost pressures. You have healthcare premiums going up.

You have colleges report operating expenses like equipment, supplies, you know, going up as well. And so were the state in a better fiscal position, our office likely would recommend the Legislature provide a cost of living adjustment as proposed in the Governor's Budget and which will be updated in May revision. As it is, though, even under the governor's own revenue estimates in January, the state has insufficient funds to cover apportionment costs in the budget year.

And the Department of Finance just discussed the Proposition 98 Reserve money, one time money that would be used to Fund the ongoing cost of e COLA as proposed in January. Historically, the state has not used one time reserves to Fund ongoing costs. It adds to the size of the problem in this year and makes balancing the budget and funding colleges in the future even more difficult.

So we recommend the Legislature reject this proposal and revisit the ability to Fund a cost of living adjustment next year, depending on the funding situation. I did want to mention another issue that's not in the Governor's Budget, but it has an impact on apportionments and will have an impact on apportionments if left unchanged. The community college apportionments formula, the scffold centered funding formula contains a number of components, such as student enrollment or student outcomes, or counts of low income students.

The state generally specifies which year these counts must be reported by the colleges for purposes of the chancellor's office, like Miss Finch, to determine how much funding the colleges are to get. The community college regulations, though it's not in law, it's in regulations, does contain a loophole that allows colleges to report two summers worth of enrollment in the same fiscal year. So it's called the summer shift, and ordinarily, doing so by the colleges doesn't result in a significant bump in funding for them.

But due to a number of funding protections that are in place from the pandemic and other funding protections that the formula has, districts do have a strong financial incentive to report two summers worth of Enrollment in either 23-24 or 24-25 and by doing so, they'll get more funding generated by the formula than they would otherwise. Even though it's not connected to actual workload increases, it's just reporting two summers worth of enrollment in the same year.

So these are not costs that are accounted for in the Governor's Budget and the costs for the formula. So given the state's projected budget deficits, we think this is a particularly bad time to be raising the formula costs and potentially redistributed limited funds to districts that take advantage of this loophole, allowing colleges to count two summers worth of enrollment in the same year. Also, distorts enrollment, makes legislative oversight more difficult.

You might look at enrollment from year to year and see it go down, but it might just be because the district decided to report two summers worth of enrollment in the first year, not in the second year, and then they can shift back and forth. It makes it difficult for the Legislature to oversee enrollment. So we recommend the Legislature close the summer loophole as part of its June 2024 budget.

Specify in statute that summer enrollment is reported only once in the fiscal year and not doubling up anymore. It would mean that summer 2024 enrollment would be counted only for 2024 to 25, and this would align summer enrollment with other components of the formula and illuminate and eliminate a loophole that otherwise would drive up formula costs, apportionment costs over the next few years. So happy to take any questions you have.

Thank you very much. And then we'll move to the chancellor's office.

Thank you. Wrenna Finche from the Chancellor's Office. I'm just going to give you a couple of quick updates. We're very, very appreciative. The Governor's Budget and the stability provided in it. Although the 0.76% COLA is small, I think of it as a diet COLA. We just saw the, you know, the new statutory figure is 1.07, so that sounds even a little bit better. And if we have a chance.

We know sometimes diets can be zero.

Sometimes.

I'm not suggesting it. Just be careful about your analysis.

So we do appreciate that. And it would come in very, very handy because, you know, as was mentioned, our districts, our colleges, our employees are all facing the same cost pressures, inflation cost pressures across the state. In fact, in 2022-23 our statewide average of salary and wage operating expenditures was close to 88%. So that leaves only about 12% left at colleges to cover other operational cost increases, including those rapidly rising utilities, building maintenance upgrades, and some essential student services.

In the last year, last several years, because we've had such large COLAs, we've seen a lot of local collective bargaining agreements reflect ongoing salary and wage increases that are going to really be placing cost pressures on the districts that's going to really worsen if their funding is to decline. So right now, our districts are all really carefully planning their multi year projections and gearing up to weather any potential funding deferrals that have occurred at other times of state revenue shortfalls. They're really thinking about this carefully.

We've run some numbers. If we had the governors proposed 0.76% COLA, next year, 26 districts would see a decline in their total computational revenue. If we keep all of their other metrics, a lot of assumptions flat. Right. And with a 0% COLA, that number increases by eight, and we'd see 34 districts with a decline.

Now, again, that's based on a lot of estimates that we're working with every district right now to fine tune what their estimates are, where we think local revenue will come in to really fine tune that. But then I also want to address the summer shift issue. The summer shift is a financial tool that's been available to districts for decades. It predates the student centered funding formula.

And by our estimates, it's actually really has a really minimal impact, maybe four or 5% of total fts in any given year. My anecdotal conversations with cbos, the chief business officials of the system, are that they're really not using it right now because the student centered funding formula has already built into it three year averages for enrollment. So trying to shift into any one year, it almost doesn't matter because we're looking at a three year average figure when we do the calculation.

So it's not that nobody is using it anymore. But I do think it's not. I don't think it's going to have the type of impact that the Legislative Analyst Office thinks it would. I also want to say that if we are going to make changes, we really should do them, you know, with multiple years, do projections, you know, have that be something that districts can plan for so they have certainty and not just take something away that they were already kind of planning to be using. You know, that they've already built their budgets around for next year.

Then let me ask a quick follow up. If it has a negligible impact, what's the problem with not doing it and eliminating the loophole?

That's an excellent question. And again, I think it really comes back to we'd want to sit down and model it out with better data with more stakeholder input. Right now, I can't tell you from the chancellor's office which districts have used summer shift and how much they've actually used it, because we don't have that collected as part of our, you know, we don't, because we don't have that common data technology platform. We're not always getting our information in real time.

So when districts report to us, they don't, they don't share whether it was summer shift or not. So we would have to do an ad hoc survey, run some modeling, you know, so my prediction of it being very minimal impact is really just based on anecdotally many.

But the trouble is, and believe me, I understand whatever the number is, 116 campuses or colleges, that there's always 10 that never return a survey. And you're trying to do the number. It makes us crazy because we're trying to get a grip on it. And if. If I were an advocate, I would have done what you just done, because asking for the information delays it out of this year, and we might want to have a conversation this year about doing it.

And so I think that's the. Trying to figure that out with the best data that's available would be really helpful. And I was going to ask the Department of Finance if you had any comment on the Legislative Analyst's suggestion with regard to the loophole.

Chris Ferguson with the Department of Finance. You know, I just add some historical context here, and that is when we did shift from the prior funding formula to the student centered funding formula. This came up as part of the discussion and part of the final agreement was a tacit agreement to allow districts to continue having access to this tool. It actually was part of the initial proposal to remove it. So there is some historical context there.

I would say that we can see in the data that we do have. Prior to the Student Centered Funding Formula, it was somewhat clear to tell which districts were doing it because you could see a dip about half of the districts that were doing it. You'd see their FTEs decline one year and then it go back up the next year, and then it declined the next year. You could see it, and the other half they would go up, then down, then up.

So you could see that in the data. What we heard from districts, though, at the time was it's really about having access to the tool to maximize revenues at the local level. And they try to use it to smooth out, at least this is what they would tell you. They try to use it to smooth out their revenue streams from one year to the next.

So certainly we would agree that you can see in the data, there's a portion of the funding formula right now, I believe it's stabilization funding, where you can generally assume that there are some districts that are using the summer shift, and that is a cost. And to miss Finch's point, you can also see then in the next year that some of those costs come off the books because the maximization only happens in one year, and then the next year you return to normal. What this all was designed to do is effectively mimic declining enrollment for community college districts.

It just seems like, as somebody that hasn't been familiar with this issue, that people formula shop to do their best thing, and that's always a problem. So, so I just, I. Senator Wilk.

Yes. I just texted one of my CBO's and she said that her district does it, and she says most districts do do it. So if we were to make changes, I think there needs to be a lot of dialogue prior to making any changes.

And obviously, you know, what we did in the three year smoothing in enrollment and other stuff. Maybe there's a way that because you don't want people to be disadvantaged in the first year by decision they make, not knowing that the rules will change, but never. And the LAO.

Thank you. Just want to add, we agree that districts engage in multi year planning. They're doing planning all the time. They built a set of plans around the Governor's Budget, all sorts of scenarios. The districts are going to do the same thing at May revision and have to come up with multi year plans based on May revision. So we just encourage the Legislature and the Administration.

Best case scenario would be have something to signal something soon so that districts are able to put this into their, into their calculations and in their planning. I know some have reached out to our office because we did write about this in, just a few months ago in our February budget analysis. So we did hear from districts that actually said, thanks for the heads up. We're going to take that into account when we build our plans. But having something more formal as an intent or a signal or something at May Revise, I think would be even more helpful for.

Well, I think this conversation has been really helpful. And now you all need to talk and see if there's ways to deal with some of these issues, then. My other question for finance, and maybe Chris should leave the microphone there is really, if you're taking one time reserves to do ongoing costs and doing it the next two years and there's still projected deficits in the out years, there's a piper to be paid when we get to maybe the year after next, why is that a choice, as it proposed to figuring out how to live on our revenues now without reserves one time money, propping up ongoing expenses?

Yeah, I would say there's three dynamics that we're looking at right now that we can see in the multi year projection. One is we do see growth in the guarantee in the out years based on the projection that we produced at the Governor's Budget. Is that necessarily sufficient to fully cover what we would be using reserves for in the budget year? Maybe, maybe not. It depends on what the other cost pressures are in any given year.

We also have, though, in the toolbox, based on the Governor's Budget, we have additional reserves of roughly 3.85 billion that could be used in future years in the event that we get into a situation where we would need to do that. And then lastly, the last tool that we still have in the toolbox would be looking to deferrals. I think it's a combination of all three. Give us a sense that we think we are in a good spot. I would say to Mister Steenhausen's comments.

When planning, though, in higher education, it's usually a year out. It's not the year that you're seeing right away. So the course schedules, the course catalogs for 24-25 are already out. They're already available. The course sections for fall are likely determined at the local level already, so it's somewhat disruptive to move immediately if you were. But I do agree that if we're seeing something in the longer term horizon, you'd want to signal maybe for next year that you have to look at something.

Just make a couple points first, that this needs to happen soon because the bump in funding, the additional cost to the formula as a result of the summer shift is going to happen if districts can count summer 2023 and summer 2024 enrollments all in 23-24. So kind of, there is, there is a time, if the Legislature were just to wait another year or two, kind of miss the opportunity to rein in the costs of the formula. Just wanted to make another point.

And let me say that's a very fair point. And it's, I said have a conversation, but I really meant have a conversation and soon.

So, yeah, the finance is nodding its head just to mention one other thing with regard to apportionment costs, and just a reminder that in 2324 there was insufficient funding under the Prop 98 guarantee to fully Fund the apportionment costs, including the cost of living adjustment in the current year. As a result, the state ended up using $290 million in one time funds to Fund this ongoing apportionment costs, including the coal. Again, that's in the current year, in 23-24. And so we just remain concerned about that growing.

The Governor's proposing to now use 486 million in one time reserves to Fund apportionments. And of course, the concern, I think, with a lot of us right now, is that what revenues really are going to come in, you know, when we say meet, when we see may revision, when we see our Office's new estimate of revenues, and to the extent it's not as kind of optimistic as what the Governor proposed in January, Legislature has that much bigger problem to solve. Just to comment on that, then.

Any questions from my colleagues on this item? Great. Then we appreciate this. This has been a good discussion. And we're going to move to item number three, issue number three, which is enrollment. And we have had significant conversation already, and it's the same three people. And if you're going to make opening comments, be discerning about things we might have talked about already.

Thank you, Mister chair Justin Hurst again with the Department of Finance. I will cover an investment that I have not spoken to before, so hopefully that is helpful. Specifically, I'm going to be talking about the enrollment growth investment that has been included with the Governor's Budget. So specifically, the Governor's Budget proposes a $29.6 million ongoing Proposition 98 General Fund investment to to support a 0.5% enrollment growth within the student centered funding formula, and that is for system wide enrollment growth.

The Governor's Budget has historically proposed investments for supporting system wide Enrollment growth within the funding formula for apportionments, but we view this as largely a technical investment. They're crucial for supporting community college districts that are experiencing increases in Enrollment, and without this investment, they wouldn't be able to grow their full time equivalent students. And that's really all I have that's new for you. So happy to take any questions.

Thank you very much. LAO.

As you heard from the chancellor, enrollment is rebounding at the community colleges, and mostly actually in California. The rest of the two year colleges and other states are increasing their fall. 2023 enrollment was a bit higher than the previous fall, but not nearly as much as in California. And one reason for that? There would be a couple reasons for that. One of them could very well be the unemployment situation in California, which is higher than the rest of the country.

Over the past 18 plus months, unemployment in California has gone from 3.8% to more than 5%. It's, I think, 5.3% right now, which is among the highest in the country. And historically, when you look at demand for community college education, that tends to coincide and correlate with unemployment as individuals decide to retrain, go back to college during tougher economic times.

Colleges have undertaken a number of strategies to bring back students using funds from the Legislature, including phone banking, calling students who started an application but didn't finish, calling them up and saying, we notice you've done this. How could we help? Can we get you into the colleges? That seems to be a successful strategy. So there are a number of several issues and considerations before the Legislature regarding community college enrollment.

As your agenda notes on page 19, the Legislature provided about $27 million in enrollment growth funding in 22-23. The chancellor's office has finalized enrollment data for that year and found that there was some growth, but just over 8 million of the 27 million that was provided was not earned by districts. So that $8 million is available to the Legislature to to revert and use as budget savings for the state, which is good from the state's perspective.

Anyway, based on the latest estimate from the chancellor's office, districts are on track in the current year to earn all of the $126 million in enrollment growth provided by the Legislature in the 23-24 budget. And then for 24-25 the Governor's Budget has this proposal for the additional money for growth. Ordinarily, the kind of enrollment data that colleges are reporting would strongly suggest that providing enrollment growth would be a reasonable thing to do, a reasonable base augmentation.

Unfortunately, based on state revenues, state revenue situation, the budget deficit Legislature has to take a very hard look at this proposal. You know, historically, the state has tried to contain spending, new spending at a time of budget deficits rather than increasing it. And so ultimately, the Legislature will want to weigh the benefits of providing more access to individuals to community college education. On the one hand, with the need to find General Fund savings to address the state's budget problem.

So assuming updated revenue estimates at the May revision continue to suggest a significant budget problem for the state, we recommend the Legislature not provide any growth money for the colleges for the budget year. Thank you.

Thank you very much.

Chancellor's office Wreena Finche Chancellor's office I want to be appreciative yet again that the Governor's Budget included a proposal to Fund growth for our system. Again, as the chancellor mentioned, we have enrollment growth is just rebounding so well, and we absolutely think it's the right thing to do to actually Fund colleges for the students that they're serving.

As it stands now, in 23-24 we've had several districts, we have 14 districts that have reported growth that has exceeded their funding cap for their growth funding formula, resulting in about 5000 fts or close to 30 million not being funded. So these are students that are being served by our colleges and they're not even being funded for serving those students.

We've seen tremendous growth from fall 22 to fall 2023, about an 8% increase, and we're seeing preliminary data showing again another 8% increase between spring of 2022 and 2023. And even more encouraging is that in September of 2023, the update that we received, we've seen a disproportionately high enrollment growth among historically underrepresented and marginalized student groups, meaning enrollment of black and Latino students, students with disabilities and those over 35 years of age are all growing at a higher rate than the General population.

These are our working learners. These are the people that we want to upskill in the, in the workforce development that we were talking about earlier. I want to point out too that the growth figure the unearned growth from 2022-23 when we have unused growth dollars. The student centered funding formula allows us to apply that to apportionment in General. But even in 2022-23 we've got a little bit more of a surplus. We're looking for the whole SCFF.

We're working closely with the Department of Finance and looking at a little over 30 million that is going, going to. To be reverted automatically for that in 23-24. I shared already that, you know, the growth funding wasn't quite enough to cover everything. So we're a little short for that. So we're hoping we can, you know, shift from one year and repurpose that for the next year. And with that I'm really happy just to take any specific questions.

I just have one question and it's when we saw the chart of the rebounds, there were a few and just a few that had sort of rebounded to pre pandemic levels. Are there any best practices you learned from what they did that other colleges can learn from?

Yeah, thank you for that. So, you know, one of the. And one of the things I have to point to again is the tremendous investment that the Legislature and the state has given us in retention enrollment dollars and recovery block grant funds. You know, we're doing everything we can think of and more to really, you know, to bring students back and make sure they're brought back in a way where they can be successful and succeed.

The COVID recovery block grant was used for activities that directly support diverse student groups such as quality investing in quality distance learning, reengaging students like those phone banks that Mister Steenhausen mentioned, removing barriers to re enrollment, closing the digital divide by providing laptops and hotspots, providing direct emergency grants to students, and supporting basic needs for programs such as food programs and housing. So we've been strategically focusing resources to reengage those individuals who may have become disengaged or dropped out because of the pandemic.

The retention enrollment outreach funds that have been provided have been really helpful again to really help districts and the state as a whole engage. You might have seen our I can campaign or heard it on the radio. If you've flown in and out of any airport, you've probably seen I can go to college signs, you know. So we're really. We've got the message out there that community college is a resource. It's available and we're here to support you.

Some other interesting district practices include packaging financial aid along with emergency grants and philanthropic support right at the district level, covering forgiving student debt, covering textbook costs, increasing the food pantry hours, providing childcare stipends, again, the laptops and hotspots, and then emergency housing vouchers when they're ready, the call centers that were mentioned. One area that I really think is interesting is improving student advising by creating work study student navigator programs. So you're basically doing like a buddy system where students are helping other students.

Let me just say this list is really helpful, and I hope you're sharing it with everybody in the universe so.

That it's on our website. Actually.

Perfect.

And in your packets.

Perfect. Let me ask my colleagues if they have any questions on this item. Senator.

First of all, the I can campaign is awesome. Meant to tell that to the chancellor. I think it's really, really well done. So I want to commend you on that. The thing about sometimes we be pennywise and pound foolish.

So my experience when I was on the Board of Trustees is when unemployment rate goes up, enrollment goes up, and people want to enroll because they want to get retrained so they can actually get a job and provide for the family and pay taxes to us. So unemployment rate, you were kind saying it's one of the highest. It is the highest at 5.3. And again, it was just today, so it's not necessarily a trend. But federal Reserve, their numbers came out today.

GDP was much lower than expected and inflation was higher. And again, that's just one quarter. But if that were to continue, I think we're going to see a swell of people wanting to come into the community college system. So I think we need to factor all those things in as well.

Great. Thank you. Appreciate your comments and appreciate the discussion. So thank you. And we're going to move to the last issue, issue number four, student housing. And there's a finance switch out here with Alex Anaya Velazquez. But other than that, we'll still have Paul and Wrenna. And whenever you're ready, we'll start with the Department of Finance.

Good morning, chair Members. Alex Anaya Velazquez with the Department of Finance. I'll be providing a high level overview. afternoon. Correction. Yes. Thank you. All good. I'll be providing a high level overview of the California Higher Education Student housing grant program. As you all may recall, the 2023 Budget act reverted prior and plan General Fund support for the 16 projects at the community college level and included intent language of pursuing a statewide lease revenue bond or other statewide financing approach.

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

And as you may recall, the Governor's Budget included messaging that the Administration is pursuing a statewide lease revenue bond for all 13 projects, while including current year investment for support of the three additional projects. In regards to the trailer Bill Language of the state wide lease remedy bond program and its technical aspect, this is forthcoming at the May revision. This concludes my remarks and I'm happy to take any questions at the appropriate time.

We don't have major concerns with the basic approach of funding three projects with cash and others with lease revenue bonds. Our main issue is the Legislature is yet to see any details on this what would be a new lease revenue bond program for the state? From talking Administration our understanding is that the Governor and Department of Finance have been reviewing each of the 13 projects to ensure that they are in fact eligible for funding under lease revenue bond program.

And if a project is not, the state will need to consider a different financing option. As table three of your agenda notes, there are projects that are in various phases of development. Projects that have already were told a year or two ago that they received a grant. Some are spending that that grant money now, others are using their own reserves to do some planning and some drawings. So not surprisingly, colleges are a bit anxious to know what the plan is.

So this is all just to say the Legislature and colleges could benefit from as much time to review the proposal and proposed language. So we'd encourage Administration to share the details and their proposal as soon as possible. So it's going to be very fast between may revise and actually enacting a budget, as you know.

Thank you very much. Community colleges.

The chancellor's office has been working closely with Department of Finance on starting to get into the complexities of the statewide lease revenue bond. Of course, we have not had a chance to see the final may revise trailer Bill Language about this yet either. So, you know, our system does, you know, has, has many questions as well, but is very appreciative of continued funding. Our long term goal for student housing is for our system to have a bed available for every student that needs affordable student housing.

You know, we're, we have fewer number of beds per student than any other system, but we probably have the greatest need with close to 20% of our students experiencing housing security of some kind in any given year. So, you know, I don't need to repeat, you know, the status. You've got that in your agenda, the status of every project. But the projects that will be going forward are experiencing some challenges. Cost increases again as inflation continues while they wait to get started.

And probably the biggest challenge is really the uncertainty about exactly how the statewide lease revenue bond is going to roll forward. So we're again, just looking forward to learning more about it. Thank you.

Great. I think this is so laid out in the staff report, and we have had such animated discussions about it on the road here. And I don't know who is familiar, but basically in the first year, it was supposed to be three years, and it was oversubscribed in the first year, so it got to three and a half billion, and that was UC, CSU and community colleges. And there have been some analytical pushes to, because of budget shortfalls, hold back on it.

And I think the Legislature has just insisted that we move ahead, that the housing crisis is so acute, and particularly in some markets. And as the staff report reflects, there are only roughly 15 community colleges that did housing, but they all tended to be rural, where people would come in remotely and need a place to stay overnight because it was just too long to regularly commute.

And there was even one time when it was suggested that it be held because community colleges needed more time to have the experience to do this. And it was sort of a catch 22. They're not going to get the experience if they don't get to move ahead. And I think there was the savior of the bond financing, and yet we still don't know.

And we need to know because the bottom line is we want the projects to continue to move ahead and we want it to continue to work. And I know the UC stepped up for the three joint ones and offered the bond financing, and one of them is in my district and I'm intimately familiar with, and I feel like I've been personally playing whack a mole. Every time I think I have an issue done, a new one pops up.

And whether it was the public private partnership, whether it was the bond financing, whether it was the fact that the transportation part of the EIR needed to be redone, whether UC thought, zero, this violates our contracting out thing, and we have to start reporting to afscme if we do this. And so they have budget trailer Bill Language to satisfy the last issue. And the EIR is in process. And I think that they're ready to go to bid the minute they satisfy those things.

And it's just very important when there's suggestions that let's just stop every project that hasn't issued the bond. Some of them are so tantalizingly close and have been attempting in good faith with all these obstacles to move ahead and do it. That I still would speak out strongly for. Could we just get them done and move ahead? Where there have been grant awards, I know there'll be discussions and I know there will be other realities that might enter in.

But I think it's been, as a Subcommitee, our disposition to just keep moving and get them done. And some people have stepped up every way along the way. Some people have occasionally have to be pushed to step up. Some in a good faith way, say, let's pause. But I just think it's our sentiment that we just want to keep moving until we get these projects done. And on the revolving Fund, that is a really good idea. The Legislature adopted it.

It's being postponed in this budget because the few, the grant money that just hadn't gone out the door. The small part of the three and a half billion is all or mostly in the community college section. And so I just look forward to the time that we can get back to the project list that's listed here. And I met with one of them. It was just heartbreaking. They finally already. But they just didn't get here in time when the three and a half million was at issue.

So, chair, I'm sorry I have to leave.

I totally understand. So I think that is just the overall comment. Senator Wilk, do you have anything on this? Before we move on?

I want to just add before I leave.

oh, okay.Senator Skinner

I very much appreciate being able to be part of this discussion. I really appreciate getting up to speed on what's happening in our community colleges, something I've been very passionate about for years. And to get the data that you've provided has been really helpful. And the comments from DOF and Lao on the housing front, just echoing Archer's comments, we know, look, we have a housing crisis. We've got an increased number of people becoming homeless. A lot of students are living in their cars. If we can get student housing, that helps us in that.

So thank you very much and thank you for being here today. We really appreciate it. Well, no, we do. That's good. Okay.

In fact, our former colleague, I was admonishing him when I was coming up because I'm going, where are you going? He said, I'm no longer on the Committee, so this is a great addition. So I just echo your comments. We just need to start just moving on this stuff. I mean, we've just done all this piecemeal stuff.

I remember when I was in the Assembly, we made it so students could actually go and use the showers on community college campuses, we had a proposal that didn't get through to allow them to park overnight. And the housing crisis is real. And I think out of all the student populations, I got to believe it's the community college students that are most challenged with housing. And we need to plow through this and get this done. Done well, but done as quickly as possible.

I really appreciate those comments. And I had said in, I think last year at this hearing that when I have not been on the Community College Board for 22 years, I never heard of people that were unhoused. And when I ask at every college in my district, the answer is it's between one and 4% are unhoused.

And there's just this distinct level of housing insecurity that is substantially above it because I always thought with the community in community college, they were all community based, family, friends, away that they dealt with. That's just not the case anymore. So thank you for your comments and thank you for participating in this hearing. That completes the four issues that we were going to hear. Let me take an informal poll. How many people wish to address us in public comment that are sitting here?

1234-5678 is what I nine. I see. So she was in the doorway. I registered her hand being up. So we are sort of past our adjournment time. So let's do if all of you'd come to the podium and try to limit your comments to 1 minute, and then we will allow you to revise and extend your comments. So welcome to the Committee.

Thank you. Chair Tiffany Mok. On behalf of CFTA, Union of Educators and Classified Professionals, I'll quickly say that of the unspent funds in the community college budget, we're specifically looking at the part time office hours and whether we can increase enrollment in that. Since faculty contact with students is so critical to their success right now, it's reimbursed at 50%. We're proposing 100%. Given that there was $90 million provided in 2021 that wasn't spent to the extent all 98 is frozen, we'll look at that.

But as of, you know, looking at the finance letter yesterday, I couldn't figure it out. So second full time faculty compensation Fund. We are hoping that we can find a way to ensure that the money that we have, we spent 450 million between 2018 and 2021, that we have that funding actually show progress for 75% of the faculty being full time. Right now, there are a number of districts who have decreased despite our allocation of funds. So we're looking at that.

So thank you so much and we appreciate all the comments.

Thank you very much. Appreciate your comments, Chair Laird, Members Austin Webster with W Strategies. I'll try and be brief so that the two of you can get out of here. On behalf of the California Community College's Extended Opportunity Programs and Services Association, we want to urge the Legislature to adopt a COLA. As Senator Wilk mentioned, inflation is still relatively high, higher than expected, and COLA's help us adjust those increased costs throughout the states.

And then on behalf of the California Community Colleges Association for Occupational Education, which represents all the workforce educators throughout the state, we would like you all to reject the LAO's proposal to essentially revert some of the funding related with strong workforce funding. We're working with the chancellor's office to accurately identify how much money is actually being spent at all the regions. It is nowhere near the amount of money they think it is.

And if you could wrap up and wrap up by telling us what your name is. Perfect. Thank you very much. We appreciate your comments and we're sorry that these are brief. Welcome.

Hi, Anna Matthews with the Faculty Association of California community colleges. Talking about enrollment. There's a really need to support the students that we have, and categorical programs really bridge a lot of those gaps at the community colleges, particularly for our marginalized students. A lot of these categorical programs, unfortunately did not get a COLA this year. If we could be able to get them a COLA, that would be really helpful. Appreciate actually having an open conversation about the student centered funding formula.

And, you know, we believe that any functional funding formula should not have clear winners and losers. So I'm looking forward to keep working together to try and bridge the inequities there. And thank you for all the work that you all have been doing with community college student housing. Thank you.

Well, thank you, chair and Member Mark Mcdonald, on behalf of Los Angeles, San Diego, Antelope Valley and a number of other local community college districts on the COLA, I would encourage you to adopt a COLA because unlike k 12, community colleges don't have a deficit factor and may never get that COLA back. So it's a permanently lost purchasing power that we have on the summer shift.

I will agree with the Department of Finance that the Lao proposal is summer of 2024, that is this summer. That does not give districts any time to adjust and make planning. So we would encourage you, if you're going to do that, have a long term conversation, maybe do it next year if that's what you want to do. Thank you. Thank you. And thank you for sitting out to hearing. I want to play poker with you because you could never hide your facial expressions during the hearing.

Welcome.

Good afternoon. Doctor Crystal Nacio. I am from the Inland Empire. I'm the regional chair there and Senator Wilks area is in my region. So I just wanted to address, actually, something Senator Skinner said. So could you please tell her when you get a chance, all of our Regional Centers, so all eight centers have a very active role in employment of our students.

Each one of us have regional people that go out and assist, but every college has an employment engagement person and a job developer that's looking at that, in addition to industry program advisory committees that have our employers at the seat to tell us what they need. So the last thing about that is that there was a comment about completion rates and things like that.

CPL or Credit for Prior Learning will be very motivating to students from their industries to come to our campus, get credit for what they actually have done, their life experience, and not have to waste their time. The last thing is contract education. It is a big, big component of what we do. We allow employers to come to us, ask us what their training needs are, and we fulfill them. So the system infrastructure is already in play. So thank you very much. Appreciate you.

We appreciate your comments. Welcome to the Committee.

Hi, good afternoon, Rebecca Colleen, on behalf of the Community College Facility Coalition, appreciate you mentioning the state school bond. That's very important. CCFC supports AB 247, which is the K 14, $14 billion bond. Our North Star is really a viable bond that voters will pass. So that's our reasoning. Second, on student housing, we support the higher education student housing grant program. We are neutral on the revolving loan program, reason being that the grant program is going to really drive that deep affordability.

We urge you to focus on successfully getting those 19 previously authorized projects across the finish line. We very much appreciate your leadership, especially Senator Laird, your leadership on this issue. But the details matter. So we urge you to do whatever you can to get the details on the lease revenue bond language as soon as possible, because that could make or break some of these projects. Thank you.

Thank you. Appreciate your comments. Welcome to the Committee.

Good afternoon. Sabrina Means, on behalf of Cerritos College, requesting that the Committee continue its hard work and commitment to fully Fund the student housing projects that were approved last year. Also on behalf of Allen, Hancock, Cuesta and Santa Barbara colleges, requesting the Subcommitee maintain the 60 million proposal to enhance community college nursing programs.

Good afternoon, Mister chair and Committee Members Malik Bynum with UDW AFSCME Local 3930, representing over 171 home care, 171,000 home care and child care providers across the state. Rare appearance for us in sub one, but wanted to uplift the joint proposal that we have with the community colleges team that you heard here. Graciously championed by Senator Becker Fund the ongoing partnership between UDW and the chancellor's office.

This partnership is dedicated to enhancing secondary educational opportunities for our providers and their families, with the focus of uplifting underrepresented adult learners. While the first year of this program is already funded and underway, our request is for $5 million over the next two years to fully realize this partnership and to continue empowering these care workers. With that, we respectfully ask for your support on this throughout the rest of the budget process. Thank you.

Thank you. Good morning, chair Laird. Molly Mcguire with the Campaign for College Opportunity. We want to take this opportunity to celebrate the increases in enrollment seen at the community colleges. And regarding the LAO's recommendation to revert unallocated and unspent funds, we would just ask that those decisions be informed by the organizations that have been monitoring progress on those previous investments, and we could provide context as to possible cuts or reversions as they're contemplated. Thank you.

Good afternoon. Kyle Hyanwente, the Association of California Community College administrators. While not on the agenda today, we want to express our support for the governor's Proposition 98 maneuver, which would shield students and staff from devastating budget cuts. We believe it's important to keep k 14 districts whole during this difficult and unknown budget time.

We also would like to echo the comments of previous speakers about the importance of applying a COLA to the student centered funding formula and the corresponding categorical programs to combat inflation. And finally, want to express our support for the $60 million in the governor's proposed for nursing programs. This is vital to combat the state's nursing shortage. Thank you. Thank you. Welcome. Good afternoon. Andrew Martinez, Community College League of California want to thank the Administration for their proposed budget. Recognize that you have tough decisions to make.

We appreciate the COLA as we build back our enrollment. Those dollars are really critically important for us. And echoing what Kyle just shared as well, we are also supportive of the nursing as well. And I appreciate your comments about the worst of best decisions on the maneuver. So thank you so much.

Good afternoon, Chair Laird and Senator Wilk, thank you for hanging around this long. I'll try and be brief. David Neben, on behalf of the Pasadena El Camino and Santa Monica colleges. Our colleges are in the midst of that very tail end of the enrollment recovery right out of the pandemic, however, as the hold harmless provision is about to essentially just drop off, we're looking for just a very, very slight amount of reprieve so that we don't have to cut any course availability or staff, especially the full time staff, right before we hit that pre pandemic level of enrollment recovery.

So we're just looking for a tiny little bit of additional room. And then Chair Laird, something that you had touched on earlier today in the hearing on the baccalaureate issue. There's still a couple of programs that are in a bit of a quote unquote, holding pattern from last year. We haven't gotten any additional information at this point. We're not trying to expedite any processes.

We really just need some information from the CSU system so that we know how to pivot or if we need to scrap and restart into a new application for this current cycle. So appreciate your time. Thank you.

Thank you. Really appreciate your comments. And I know that the amount of time for public comment was really brief. And let me remind everyone, you can write us with written comments, or you can go to the Senate Budget Committee's website and engage there if you wish to add, or somebody's watching and didn't get to make comments at all, we would love to hear. And we're getting near the crunch time. Let me thank everybody that stuck it out. Let me particularly thank Senator Wilk, who was here first, and the Senate Budget Subcommitee One on Education stands adjourned.