Senate Budget and Fiscal Review Subcommittee No. 1 on Education

Committee number one on education will begin in sixty seconds. The Senate Budget Subcommittee one on education will come to order. Today, there is one issue on the agenda which covers the May revision proposals for higher education. We will invite the Department of Finance, the Bureau of Private Postsecondary Education, and the LAO's office to the witness table if you would like to join. And then we will go ahead and move through item, by item.

I believe, the first item we have, May revision proposals in Bureau of Private Postsecondary Education. So whenever you all wanna get started.

Good morning, Madam Chair and fellow Members. My name is Taylor Schick, the chief fiscal officer for the Department of Consumer Affairs, and I wanna thank you for having us here today. The Bureau for Private Post, Private Postsecondary Education has one proposal included in the governor's May revision for your consideration. The Bureau is requesting one time backfill of $10,000,000 from the General Fund to repay a 10,000,000 loan taken from, taken this year to support recent litigation against the Bureau.

By utilizing the General Fund to support repayment of the loan, it will sustain the bureau's admin fund while providing time for the legislative sunset review process to assess the bureau's fees, fee structure, and implement fee increases needed to support ongoing operations.

This backfill would allow fee discussions to focus solely on what fee levels are required to support the bureaus ongoing operations and restore fund solvency without being impacted by the cost resulting from the litigation. The fee levels proposed by the bureau in their sunset report assume approval of the general fund backfill. And without it, the increase to the bureau's annual fees would need to be greater to account for repayment of the loan.

The proposal also includes provisional language to provide the Bureau with flexibility to adjust its budget authority in 2026, 2027 to address a pending legal expense associated with the litigation that is expected to be finalized, this upcoming year. Additional provisional language is being requested authorizing repayment of the loan to be made without interest.

This is an update from the proposal presented at the April 9 hearing. The main changes are moving the year of the backfill, from being effective from 2526 to fiscal year twenty six twenty seven and adding the two provisional items. I do have representatives from the bureau in the audience, and we are happy to answer any questions you may have.

Thank you. I know that this is all one item, so I think what we'll do is we'll just continue to move through each item. So if that's it for your presentation, I think we'll go ahead and move on to the University of California, the Foster Youth Support Services. Oh, yeah. Did did you wanna offer any any comments?

I'm not sure, Kevin.

John Parsons, Department of Finance. Nothing additional.

Lisa King with the Legislative Analyst's Office. Good morning. We did have some comments on this proposal. So as the department indicated, you heard our version of this proposal at your April 9 hearing. We do continue to have some of the same concerns you raised at that earlier hearing.

Specifically, the bureau has already received a special fund loan that recommend, again, shifting some of those costs to the general fund as regulatory agencies are intended to be self sustaining using fee revenue to cover their costs. We do understand that rejecting this proposal could mean that Bureau charges higher fees to the private post secondary schools it regulates. We don't, however, think these fees are likely to be a major factor in determining tuition charges at these institutions.

Separate from the general fund proposal, we also have concerns with one component of the newly proposed provisional language it may, and that is the component that would exempt the bureau from paying interest on the loan it has already taken out. This is, to our knowledge, the first time that a loan between DCA special funds would be provided interest free.

To date, these loans have been paid back with interest to ensure that the fee payers for the lending fund are made whole. So if the legislature is interested in this proposal, it may want to consult with counsel to ensure that providing an interest free loan is allowed under proposition 26, which limits the way that fee supported special funds may be used. Thank you.

Okay. For this specific item. Okay. Yes. Senator Archuleta.

Good. Thank you. Thank you for coming, this morning. Thanks for your patience, every one of you. We're excited to hear from each and every one of you.

My question, the $10,000,000 we're talking about, judgments, litigation, is is that enough? Is it does that pretty much do it? The $10,000,000, it's amazing how that's an exact number.

So the litigation was finalized. There were two award judgment payments made in this fiscal year, which totaled about, roughly $10,000,000. So those are the final judgment payments. There is one final payment that is yet to be resolved, and that's for the attorney fees that were accrued on appeal. We do anticipate that that fee amount would be substantially less than any of the payments that have already been made.

That's the one we're requesting the provisional language to allow us to adjust our budget in the budget year in 2627. However, we don't anticipate any additional costs related to this litigation.

So other than that, it'll be picked up so we don't have to come back and ask for another million or what have you?

Correct.

Okay. Thank you, Madam Chair.

Are there any other questions, Senator Ochoa- Bogh? What is the amount in interest that would be saved and how would that translate to impacts on fee levels? If we were to about potential issues surrounding leaving interest from special fund loans?

So the estimated interest that would accrue on this loan, assuming, we are able to get the 10,000,000 backfill and repay the loan in, this upcoming July, the estimated interest that would accrue on that loan is about $245,000. We don't anticipate, that amount if the bureau were to pay that amount. Any change to the proposed fee levels that they have requested in their sunset.

Alright. That is it for my questions, on this item. I think we'll go ahead and turn it over now to the University of California.

Thank you, Chair Perez and Members of the subcommittee, Seija Virtanen for the University of California. The university is grateful to governor Newsom for his sustained support of the University of California over the years. Even in challenging fiscal years, the governor and the legislature have recognized the value of higher education and have invested in the university. The May revision proposes the same level of ongoing support for the university as the January budget introduction. The provost 7% base budget increase covers most of the compact funding.

The May revision includes budget bill language specifying that UC campuses grow by 2,968 FT California undergraduates in 2026-27. We welcome this language as it increases clarity on expectations related to undergraduate enrollment. The University fully expects to meet this goal. Due to our growing enrollment and core funds expenditure growth, the University continues to request the legislature approve the full compact funding. I want to thank Senator Archuleta and Senator Ochoa-Bogh for signing the letter to support the compact and elevating higher education funding need to your colleagues.

In the current year, the university took many steps to contain costs. Campuses are implementing aggressive cost containment measures, including a hiring freeze, the permanent elimination of positions, administrative cuts, operational consolidation, reduced travel and operating expenses and efficiency initiatives. If the compact funding is not received, these cost containment measures must go even further, including academic impacts such as fewer course offerings, larger class sizes, reduced discussion sections and teaching support and ultimately slower time to degree, and constraints on faculty hiring and retention.

In addition, student support services would be reduced, including advising, tutoring, financial aid services, library support, and other student facing programs. The university remains concerned about federal actions that could cut research funding, Healthcare funding impacted by our academic health centers, and student services and financial aid.

This volatility makes it difficult for the university to cover unexpected expenditures should enrollment and revenue collection turn out differently from assumptions. The May revision includes the governor's proposal for $1,500,000 in one time funds for the First Star program. This program works with current high school students who are in foster who are foster youth to provide them with education, mentoring, and life experiences that encourage them to attend a four year university.

The program is a long term commitment to these youth to guide them to a life of achievement and service. In the current year, UC received $1,800,000 in one time appropriation for First Star.

Those funds have been provided in part to UCLA, which has an existing First Star program, and to UC Riverside to establish a new First Star program. Thank you for your time and I'm available for questions.

So, my understanding the only difference in the May revise is that $1,500,000 one time general fund increase to support the First Star Academy youth cohorts at the UC campuses. Obviously, supporting our foster youth is incredibly important. I was wondering what is annually the number that of students that have been served under prior appropriations for the program?

The current year appropriation of 1,800,000 is the first state appropriation to the First Star program. Previously, First Star at UCLA was funded with donations and they had about 60 students annually from local high schools who participated. The expansion from the current year appropriation, about 600,000 will go to UCLA and they are going to, triple the size of the program. So it'll be, about 120 additional students at UCLA, and then 600,000 a year to UC Riverside over two years.

So that makes up the six hundred, six hundred, six hundred is how you get to the 1,800,000.

And it'll be they'll start at 60 students at UC Riverside as well.

And then did DOF or LAO want to comment at all?

No additional good morning, Alex Anaya Velasquez with Department of Finance. No additional comments, but happy to answer any additional questions you all may have.

Good morning. Florence Bouvet with the Legislative Analyst Office. Our recommendation regarding this proposal would be for the legislature to reject the spending proposal and this recommendation is based on few considerations. First, the need for state funding is not clear.

As was just explained, UCLA ran its academy for fourteen years without direct state support through a mix of philanthropic, non profit, and local funding sources. Second, funding would go to, only few campuses as was, again explained, earlier. Sec third, few foster youth students have benefited and will be benefiting from the this initiative while the UC system currently has some system wide outreach programs that serve a much larger number of underserved students, including, foster youth students.

And, those outreach programs are available at the 10 UC campuses, not just, the three that would, be opening academies, under the the the current initiative. And that concludes my remark.

Thank you.

Excellent. Did my colleagues have any questions? Senator Tropic.

Yes. Thank you. Actually, you've made a really good point because I have something I have another comment in another when we touch on a in another area today. But my I've I've been kinda curious because it's my understanding that we already had those programs that serve our underserved that serve our under served students at schools. I'm always a little hesitant to add more programs with which add more admin costs.

And I was going to make the same comment in in another in another area in our in our in our agenda today. But I always feel that we should support what we already have in place and continue the ongoing funding for those particular programs and adding new ones, which you have to add more admin cost to it, yielding less funds for directly to the students.

And so in my mind, my rationale is why not fully fund what we already currently have in place, which encompasses those students as well. And then that allows us to actually really have more funding that goes directly to the students rather than creating something completely new. So what's the rationale starting something new versus really reinforcing what we currently have in place?

Alex and I with the Department of Finance. Just to add a little bit of detail, I'll defer to the University of California on the existing program, but the First Star Academy's program is not necessarily a new initiative. They have received funding as stated by the LAO on the agenda, previously in the current year, the 1.8, but they've also received additional funding through the California State University budget a prior fiscal years ago. So they've been established across multiple campuses.

And I think a difference between the existing programs versus the First Hour Academies is that they are also meeting students more specifically at the high schools, specifically foster care students, and they're enabling them to be prepared for college, to get into college, graduate, and then find a career after they graduate.

So the focus of the first door academy is just starting at the high school level rather than at the college level.

So, I'm sorry the Chair, the Legislative Analyst Office would like to comment.

Just to to follow-up on what finance just mentioned. UC currently has a program called the early academic outreach program, which already works with high schools and provide preparedness services to help them, and and that includes also foster youth students who qualify for that outreach program automatically.

And so UC already has a program that does reach out to high school and and help the students understand and their families what are the college readiness requirement in terms of the courses requirement, the test they might have to take for college and entry in in some circumstances.

So in other words, according to the legislative analyst office, this would be duplicative of a program already in place that already reaches out to our students in high school to prepare them to get into college and give them what whatever it is that they need, the support that they need in order to be able to successfully transfer into college.

Yes. Broadly speaking, it's our understanding that the the the two in this initiative overlaps significantly with the current existing program. They do have few specificities that differ slightly from the outreach program I was mentioning. But overall, I think there's enough overlap for our office to recommend the legislature to reject this new initiative.

And and so because we already have a week what is the program that you said that we already have it's called?

It's called the early out academic outreach program. It's it's part of a broader set of program that UC has. They have overall 13 programs that are helping, students. But this one is the one that has the closest overlap in terms of, reaching out to high school students, to enhance their college preparation. And it's focusing specifically educationally and economically disadvantaged students

and forced to youth are specific Within that within that demographic. I I get it. So and every campus has that already? Correct. So this and if we wanted to have even and even more if we so there's you said those two programs is are the ones that match the most to the one that is being proposed to start a new one.

So if we wanted to and redirect, you know, some of the funding to the early academic outreach program right now, if needed, they could always add the additional service to meet whatever it is at the whatever it is that their first academy the first our academy youth program has. I mean, if if needed. And if there was something that was not covered, that could already be done with the current program that we already have in every single campus.

That's our understanding.

Okay. And the other question is, when it comes to the First Hour Academy youth cohort, we don't have that one in every single campus. The goal is the goal, intentionally would be to start one new in every campus.

The extent of the proposal would allow the University of California with the new funds to sustain and expand expand the program within UCLA or UC Riverside and additional campuses if the UCOP or the University of, would choose to guess that is correct.

Okay. So I'm gonna go back to my previous comment, and it's just been my philosophy. You know, we've been here I've been here in this committee for six years and I just it's one of the concerns that I continuously express is that we continue to add more and more programs without reevaluating what we already currently have or fully I would just say that I understand they tend it always sounds and makes us feel good to start new programs to meet new needs.

But if we already have programs that actually meet that the needs of those demographics, generally speaking, I personally would think that it would probably be once again, the word, and I just keep thinking it in my head. It just yields more benefit to the students if we fully fund what we already have rather than expanding and working towards more administrative cost in new programs rather than focusing what we already have that obviously is working.

And if it's not working, let us know. We can reevaluate those programs and say, okay, maybe we need to redirect the funding. But why not fully fund what we already have, ensure that they have robust funding to meet the needs of our students. And if there's additional service that those programs can provide, allow them to make those decisions with what we already currently have. That's just my personal opinion just because it gets so convoluted.

We have so many programs. And then it also makes it difficult for students to try to navigate where do I go, which word it it just it makes it very convoluted. And I think we need to streamline, enforce what we currently have, make it so that they fully have what they need financially, and and and work that way rather than continue to begin more and more programs and expand more and more programs. That's just my personal opinion.

And I'm looking at especially be with the budget and how it's working and where we're cutting and what we're doing.

I just think we have to work smarter, a little more strategic rather than just, you know, continue to just expand. Let's focus on what we have and make them strong. That's just my personal opinion.

Yes. Senator Archuleta?

Yeah. Well, thank you. It we mentioned seven or eight years. I'm seven or eight days. So this is all new to me.

But education isn't through my my my grown children and what they've gone through. But I will tell you this, I I think it's imperative that we give every child an equal opportunity. And with this, early academic learning program reaching down into the high schools and giving them the sense of being able to compete when they're lucky enough to get in the UCs. But they gotta be pretty top notch students, even even the ones who are from the foster kids.

You know, obviously, when they join that program, you know, the First Star Academy.

But they are the best of the best, or they wouldn't even get into the UC system. Right? So does the program also help with remedial aid and and financial aid and the whole thing, the whole gamut to keep them there and to be able to fulfill their dream to go on and be competitive in life?

Thank you for the question, Senator Archuleta. The program works with, current high school students for four years to make, rep make them prepared to apply to university. Many of them do get into, UC and some go to CSU from the program that's been operating at LA. They have a 100% college going rate. Once they are at UC, we have a program where students who are in foster care as teenagers, receive waiver of their tuition.

And we also have additional financial aid because they would have very low income. We have, our institutional financial aid that provides them, with house money for housing and living assistance and also the Cal Grant accessibility grant for former foster youth will give them additional funding.

So at the interview process, this is when it comes out that they are fostered?

In in order to get into the First Star program in high school, they have to be currently in foster youth.

Okay.

Most of these students, are either there. Yeah. They have no parents and no relatives who can take care of them often because those parent are incarcerated.

Yeah. And, obviously, our budget's reflective of their care maintenance and their future. And I appreciate that. So, obviously, I'm looking make looking to make sure that we we fund the program and and keep these young people motivated to stay in school.

Just really quickly to Alex and I with the Department of Finance. Just building on UC's comments, a a little point on the early academic outreach program, otherwise known as EOP. As somebody who participated in that program, I I believe also some of the restrictions of the program can sometimes be, GreatPoint or GPA to become part of the EAOP program.

So just compared to the First Start Academies, they're expanding their focus on foster care students, and I believe there's not necessarily a requirement of GPA to receive their aid and guidance to be prepped for college. So that's the difference between the EAOP as well compared to the First Start Academies.

Ma'am?

Sorry. My understanding is that as a foster youth, you automatically qualify for EAOP. So maybe it's different for different underserved group of students.

Okay. Thank you Madam Chair.

So a couple of things. One, my understanding is the First Star Academy youth cohorts that have existed at the different UC campuses, they've existed in some form for over a decade. Is that right?

At the UCLA campus only, yes. Since 2011 and I believe CSU has some first start. But

But right now, we're just focusing on the UC.

Yes, that's correct.

To the other UC campuses and how long those programs have been in existence?

We received our first state appropriation for First Star in the current year and UC Riverside is in the process of starting their program and will be admitting the first cohort this coming fall.

And I I just wanna highlight that because this is, you know, work that has been ongoing for some time. The other thing I'd like you to highlight, so and you mentioned this already. UCLA, I think you said, has a 100% college going rate for the students that participate in the program. Is that right? Did I catch that correctly?

Okay.

That that is correct. They it's a mentoring program. They provide the students with tutoring, and the students are highly motivated to change their life circumstances, and they currently have a 100% college going right.

And so what has been the college entry and degree completion rates for these students? Because, you know, to me, when I think about the investments that we place into education and particularly into higher ed, right, this is one of the most fundamental things that we do is making sure that students actually get their degree in a timely manner. And so knowing that there's a 100% college going rate from this program is huge. That's a huge sign of success.

So what does that degree completion rate look like?

And what does that look like for other campuses?

For for the UCLA cohorts that have been going through their program, I believe it's in the high nineties for college graduation.

I believe when we were informed of the statistics, it was roughly in the high ninety five to ninety nine percent of completion rate.

Amazing. And so that's the case overall for all the programs or just at UCLA? Because I understand UCLA has been in existence longer, so you're just gonna have more data.

Right. I I think from the administration's perspective, when we were looking at this proposal or proposing this request, we were looking at the work that was being done at the University of California Los Angeles because that's what this request is building upon on. So we looked at the data and we're seeing lots success and that's why we wanna sustain and expand the work that's already being done.

Okay. Excellent. Well, good. I think that those are incredible numbers. I mean, a 100% college going rate having a degree completion rate of ninety five to ninety nine percent.

I mean, if we had that for all of our underserved students, low income students, black and brown students, we would be leading the country in terms of baccalaureate degree completion. That would be incredible. So, that's the kind of success that I certainly wanna see. I don't have any other questions. I don't do you have one more?

Senator Chobog?

So just two follow-up questions. Our current programs, do we have any data for the success the same data that, our chair has asked about the current programs that we have serving our students that the LAO mentioned. Do we have any success data for those particular programs for underserved underserved students?

I believe the University of California does have some success data for the broadly, what are called the SAPEP programs of which the EOEP is one. The I would have to go back and get those. I don't have them in front of me.

Okay. We'd love to have it to see whether or not and how compare the comparisons of of those programs were because now now we start getting into the nitty gritty about, you know, which pros are more successful, which is what we've been asking is if they're if they're successful, great. Let's continue. If they're not successful, let's reevaluate what we have.

So I think that's important that we bring that information forward as we're comparing what programs are supposed to be continuing, what we're gonna get what we're gonna start anew and evaluate what we currently have.

Number two, with regards to the funding, this is a one time funding. In the past, it has been funded through philanthropy, basically. What is the plan moving philanthropy, basically. What is the plan moving forward after you receive these fundings this funding to start these programs? How do you what's the plan to sustain these programs ongoing?

Once the programs are started at the new campuses, those campuses are supposed to fundraise to ensure that the programs can continue, and the intent is for the programs to become self supporting through fund fundraising. And yet

this funding, the 1,500,000 is also going to UCLA to help it?

A a portion of it may go to UCLA. We're going to have an internal process to see how many campuses are able to start robust programs at this time. And depending on the interest and ability of campuses to prove their, that they have, sufficient numbers of foster youth near the campuses, that they can set up the programs and that they can fundraise, we may provide some funding to UCLA or

And how successful has UCLA been thus far in in self sustaining its program?

They've done quite well. They set up their program and sustained it for well over a decade just on donations and are now looking to expand the program that they currently have.

Okay. And it is the intent of UCLA and and UCR to eventually just use this funding to expand the program and then be self reliant?

That is correct.

Okay. Thank you.

Alrighty. That is it for this item. We're going to go ahead and move on to the California Community Colleges. And we'll start with the student centered funding formula, cost of living adjustment.

Philip Osborne, Department of Finance. I'll start with a few higher level talking points about the May revision changes and proposals for the community colleges. As part of the total withdrawal of $407,100,000 from the from the Public Schools Stabilization account, what we call the rainy day fund, the 44,000,000.5 44,500,000 of that will be attributed to the community colleges and will be removed at May revision.

May Revision provides an ongoing increase of $197,700,000 Prop 98 general fund to reflect a change in the SCFF cost of living adjustment from 2.41% to 4.31%. Of this 4.31%, 1.44 is discretionary and 2.87% is mandatory.

This increases the total proposed cost of living SEFF adjustment in 26-27 to $438,300,000 The May revision also requires community colleges to offer employees up to 14 weeks of paid pregnancy disability leave. A portion of the discretionary COLA increase of $146,400,000 is intended to be used to reimburse new community college costs related to this new requirement. May revision includes an ongoing increase of 122,800,000 prop 98 general fund as a result of decreased offsetting local property tax revenues.

It also provides a one time increase of $9,700,000 of Prop 98 general fund available for use over three years to support the adult learner demonstration project. This program provides comprehensive services to assist low income adult workers to help move them into stable and higher paying jobs.

The program is off is operated by the nonprofit United Resources Center in partnership with the California Community Colleges. As a side note, the 2024 budget act provided previously provided a $5,000,000 one time Prop 98 funding for use over three years to support this project. To reflect a change in the cost of living adjustment from 2.41% to 2.87%, the May revision includes non coing increase of $6,100,000 Prop 98 general fund for select categorical programs and the adult education program.

This increases the total cost of living adjustment for the categoricals provided in 26-27 to $36,700,000. The specific categorical programs include adult education program, extended opportunity programs and services, disabled student programs and services, the apprenticeship programs, CalWORKs student services, the mandate block grant, and the campus childcare support.

May revision includes an ongoing increase of $2,000,000 of Prop 98 Channel Fund to maintain the governor's budget proposal to fund point 5% enrollment growth in 2026-2027. This increases the total amount provided to support the point five enrollment growth to point 5% to $33,900,000 The mayor vision also maintains the governor's budget addition of 1% ongoing growth beginning in 2025- 26, which then cascades into 26-27. The 1% ongoing growth equates to $55,000,000 ongoing of Prop 98 general fund.

May revision also includes a one time 607,000 Prop 98 general fund increase for the student support block grant, which is a flexible block grant for community colleges that they can use for various purposes such as supporting student basic needs and counseling services. This increases the total amount proposed in 26-27 to $100,600,000 As a side note, $60,000,000 of one time Prop 98 was previously provided in last year's budget.

The May revision maintains the governor's budget proposals for one time and ongoing Prop 98 for various programs and purposes. This includes a $120,700,000 one time to address deferred maintenance costs and needs $40,000,000 $41,000,000 of which 5,000,000 is ongoing for the common cloud data platform, 38,100,000 ongoing for the Calbright College and 37,000,000 of which 2,000,000 is ongoing for continued support of the credit for prior learning initiative.

The May revision maintains the governor's budget proposal to provide a one time increase of 736,900,000 in proposition two bond funds to finance 10 new projects and 29 continuing projects at the community colleges. The May revision adds some reappropriations for certain design phases of some of the projects. That's my presentation.

I'd be happy to answer any questions.

Lisa King with the Legislative Analyst's Office. So while there are a number of moving parts in the community college budget at the mayor vision, the majority of this new spending is really in one place, which is the proposed 4.31% super cola for the student centered funding formula or SDFF. As you develop your proposition 98 package over the next few days and weeks, we recommend you start by providing at least the statutory portion of this cola, the 2.87%.

Providing that portion of the cola would help districts keep pace with increases in their core operating costs while giving them some flexibility to address local conditions. After providing the statutory portion of the COLA, we think you have several reasonable options for what to do with the remaining ongoing funding in the community college budget depending on legislative priorities.

One option is you could approve the May revision proposal to provide an increase for SAEFF above the statutory COLA. As you heard from the Department of Finance and as you discussed yesterday, that proposal is also linked to a new requirement to provide paid pregnancy disability leave. Another option is you could redirect some of that funding toward additional enrollment growth of the colleges beginning in 2026-27.

We think there's a case to be made for this as more than half of districts are already above their current year enrollment targets and there are some factors that we discussed earlier in the spring that could contribute to additional enrollment pressures moving forward. You also could consider using a portion of the one time, pardon me, ongoing funding for cost of living adjustments for additional categorical programs.

You'll likely hear from the chancellor's office about rising costs in the student equity and achievement program. And finally, one other option for these ongoing funds is you could choose to redirect some of them for one time priorities, such as the student support block grant or deferred maintenance. In yesterday's hearing on proposition 98, you heard one of budget resiliency for the colleges moving forward. I'll be brief on the topic of one time spending.

The main new proposal on this front in the mirror vision is the $9,700,000 for the adult learner demonstration project.

We recommend rejecting this proposal primarily because our view, districts already have significant incentives and funding under existing programs, including the student centered funding formula to conduct these types of activities. And I'll conclude with just a quick note relating to apportionments costs. Under the May revision, current year apportionments costs for 2025-26 are $52,000,000 higher than estimated in January.

The May revision does not include an adjustment for those additional costs and so in your package, we would recommend including that $52,000,000 one time in 2025-26 to avoid a shortfall in current year apportionments. Thank you.

Happy to take questions.

Good morning. Imran Majid, Director of Fiscal dvocacy for the California Community College's chancellor's office. We wanna first begin by thanking the governor's administration for maintaining the core investments included in a January proposal that would advance our Vision 2030 priorities. This includes, as we heard from Department of Finance, credit for prior learning, common cloud, deferred maintenance, dual enrollment, and the student support block grant. We view these proposals as essential for expanding career and workforce opportunities for our working learners and adult students.

In terms of the specific May revise investments, we certainly appreciate the administration's proposal on paid pregnancy disability leave by providing flexible resources tied to the implementation of this policy. For context, about 55% of our faculty and classified staff identify as women. This is not just a gender equity issue, but a workforce recruitment and retention strategy, especially in light of the state's declining birth rates. We also appreciate the May revise proposal on the adult learner demonstration project.

When I think about this program, I think about people like my mom, who has been an in home supportive services worker for most of her adult life, and yet to this day still cannot read or write in English.

This pilot is about ensuring that the home care and child care workforce who are predominantly women of color and low income understand that, yes, college is for them through flexible scheduling, stackable pathways, work based learning, and wrap around supports. As was discussed earlier in the spring, our community colleges continue to face significant needs around enrollment growth. Our college CEOs never wanna be in the position where they have to ration access.

While we originally requested funding to support 3% enrollment growth across the 25-26 and 26-27 budget years, with 2.5% for 25-26 and a half percent for 26-27. Our latest data and projections show that the system has a need for 3% enrollment growth alone in twenty five-twenty six.

In light of this information, we would ask you to consider funding for March enrollment growth across both years instead of the original 3%. This will lead to a cost of about $221,000,000 ongoing with $89,200,000 provided it may revise, which would mean investing approximately 132,000,000 for the 3.5% enrollment growth. In addition, we would ask for consideration for the two policy changes that we highlighted earlier in the spring.

The first being to allow credit, full time equivalent students to be calculated using the higher of the three year average or the amount in the current year starting in 25-26. This will lead to a cost of about $97,000,000 over three years.

We would ask the legislator administration to also consider eliminating the 10% cap on funded FTES growth starting in 2526. This would carry a cost of about 36,000,000. So looking at the total cost of the 3.5% enrollment growth along with the two policy changes would cost approximately $357,000,000 with $89,200,000 provided at May revise. This would mean an additional $268,000,000 in additional resources additional resources that are needed.

Lastly, as my colleague from the LA already mentioned, we would also continue to elevate the need for cost of living adjustment for the student equity and achievement program, which supports high impact but labor intensive services such as counseling, tutoring, basic needs supports, and targeted outreach for historically underrepresented students in higher education.

We would ask for a cumulative COLA going back to the last funding increase, and this would carry a cost of about $62,000,000 With that, we are happy to answer any questions. Thank you.

Thank you for, your presentation. I have a couple of questions. One, how did the Department of Finance arrive at the 4.31% COLA figure?

Again, Phil Osborne, Partner of Finance. We arrived based on updated revenue and Prop 98 estimates, and we calculated a figure that could be supported under the guarantee. It would also achieve a level of parity with the k 12 side. We had a small additional amount once we arrived at 4.31%, and so we took that and moved it into the student block grant, and that accounts for the full guarantee. We're just trying to max out the COLA to get to the full amount of the guarantee.

Okay. So if there wasn't no actual, like, assessment around, like, cost of living, it was just about trying to max out the COLA to try to make that guarantee. Okay.

We we believe that the the cola, what everyone likes to call the Super COLA, provides the greatest amount of flexibility to the greatest amount of community college districts throughout the state.

And then on paid paid pregnancy leave, I know this is something that's also been included for our k through 12 teachers as well. And so certainly, it was a a nice surprise to find in the budget just given its high dollar amount and and cost. But I know it's something that our teachers have needed for quite some time as well as faculty, but also recognize that it comes with quite a large price tag.

So what is the estimated cost system wide for providing the fourteen weeks of paid pregnancy leave? And I know that the 1.4% discretionary SCIF COLA, it's intended to absorb that cost, but what percentage of the 1.4% discretionary COLA does that entail?

For rough costs, we calculated an amount of the low twenties, 20 to 23,000,000. That would be the community college share, which would be well under the 146,000,000 of of the discretionary cola. And I have a coworker here who can talk more to the to the paid pregnancy disability leave.

Yeah. 23,000,000 is spot on. Good job, Phil. Yeah. So it's a I can talk about how it's calculated if that would be helpful.

It assumes about a two percent uptake among women that work at community colleges and then sort of looks at what the cost of a substitute sort of person in that place would be to sort of cover the the leave of that person and and assumes the full fourteen weeks of leave.

Great to sorry. Audrey Bezos, Department of Finance.

Thank you. Okay. Great. That that's helpful to know. And the 20 to 23,000,000, dollar cost and just kind of overall what that's that would look like.

Is it the case that some hold harmless districts are not going to be able to access that paid pregnancy leave funding?

That would be the case.

Okay. So this wouldn't apply to all community college districts, only those that are not being held harmless in the SCIF? Yeah.

Currently, our estimates with the the new larger COLA is we expect to have seven total community college districts in the whole harmless if the budget is enacted as as presented. One of those districts is what we call a base gay district, which relies entirely on property taxes, but the other six would not receive a COLA.

Yeah. Chris Ferguson, Executive Vice Chancellor of Finance and Strategic Initiatives at the Chancellor's office. So functionally, they've added this 4.13 or 4.31% cost of moving adjustment, and it's applied on the formula rates, in the student centered funding formula, which doesn't apply directly to the hold harmless. So as finance notes, if you're a hold harmless district, the requirement applies to you, but the funding that is flowing to districts on the formula, whether that's in the stability provision or the core funding provision would not see additional resources.

And basic aid districts also would not see additional resources because they are fully funded by their existing property tax base.

Would the proposition 98 guarantee capture a little more on the property tax side because of the those districts? Yes. But functionally, they don't receive additional resources either.

Well, so is that something that the administration is willing to address and look at to try to resolve that issue? Because if they don't, employees at these districts then would not be eligible and wouldn't receive that benefit. So how can we work to try to, I guess, resolve that? Because that feels like it'd be a little bit unfair to the employees of those institutions that wouldn't be eligible for this program.

So to clarify, they the requirement applies across the board. It's just whether they receive money to operationalize the requirement. So

So so they would have to fully implement the paid pregnancy leave, but they would receive no dollars for it. So it would essentially be a huge cost that the institution would incur. Okay. So how are we gonna resolve for that?

Yeah. Hi. Liz Mai, Department of Finance. I we're definitely open to conversations to try and resolve that. I think we're hearing that from both the community college side and also, the K12 side of those basic aid districts and some county offices of education that aren't necessarily fully funded through LCFF.

So definitely open to those conversations as we we move forward.

Yeah. I mean, I definitely think that's something that needs to get resolved because that feels like we're putting them in an an impossible situation. So

Yeah. It was definitely our intent for us, the administration to pay for this new requirement. So to the extent that, right, we're hearing that not all districts would be able to get that payment, we definitely want to, address that.

Okay. Yeah. I think in order for us to be able to implement this, like, that that question absolutely needs to be answered. Did you have a

Yeah. I just wanted to add one other component to the discussion, and that's just around the the timing of updating, bargaining agreements with districts and their labor partners. It will take a little bit of time to do that. The bill is constructed, I believe, goes into effect 07/01/2026 if it is a trailer bill. So they're they're just for your consideration, you know, you want to think about the timing of when it becomes active to provide for those discussions.

But that's more on like a technical basis.

Alrighty. I have a few more questions, but I'm gonna turn it over to my colleague, Senator Ochoa Bogue or Senator Archuleta.

Thank you. I seem we we seem to be spot on in some of the things we've done in the past. Funding here, funding there, and and we're right on. It looks good. But I see a decrease in the middle class scholarship program.

Can anyone address that? Because that's a 90.5 general fund reflects that decrease. What what what was going on with that? It seems like that that middle ground, that that scholarship program is essential because we sure we help everyone down at the bottom and those on top don't need our help, but the one right in the middle, they they seem to get punished and I've heard that time and time again. And, the decrease tell me about that.

Hugo Solis Galena with the Department of Finance. The reduction that in the middle class scholarship is that just reflects the adjusted estimates from the student aid commission. So the way we implemented into the budget is that the student aid commission gives us their estimates of how much how many students participated in the scholarship, how much money they're going to need for that.

And so the reduction that you're referring to is just the difference between the original estimates which were provided back in October versus the estimates that were provided in for in the spring. So there's no cutting of eligibility or grant size and that it's purely just the adjusted estimates.

So the notation of of the one time decrease of 90,500,000 is not accurate?

It is accurate. It's just reflecting lower estimates of usage.

Okay. So if there's when will you see the adjustment? Later into the year? Because people will now start coming to school, and then the number will change. Right?

Are you prepared?

So the figures that, the 90,000,000 the figures that we cite, it they're evolving. The for example, that the academic year still was still ongoing when we prepared the governor's budget. So those figures, the they were estimates that when we presented them back in the governor's budget. They were not entirely up, they were the best estimates that the student aid commission could provide. Now that there's more data, they were able to provide better estimates of how much money, they're going to need, to fund the scholarship.

So we're ready to adjust if the enrollment increases and and there's adjustments?

Yes. We make when there's increases in enrollment for the next academic year, we would adjust the we would get new estimates from the student aid commission and we'd be able to update the amount in the budget.

Good. Thank you, Madam Chair.

Justin Hurst with the California Student Aid Commission. I just wanted to jump in with one additional detail. A part of that decrease as you're seeing from the current year to the budget year is because the current year is planned to provide an unmet need at the 35% rate for students, whereas the budget proposal provides a 17.5% unmet need for students. So that is why there's a large decrease even though caseload has increased from the current year to the budget year.

No. I just wanted to my point is that, obviously, you all work so hard on this budget. And and I see that item per item right down the list. You've been very the governor has been very generous. And then when I saw the decrease and then the comments, we get comments, understand, from constituents that call about the budget.

They call about certain things, whether it be security, whether it be preparing for the new year and even maintenance of our of our schools or whatever it might be. We get the calls. So when I asked a question and I see the decrease, woah, then it brings a highlight here. Because when we actually vote on the overall budget, we're gonna be asking that question again. So I appreciate your input.

Thank you.

Senator Ochoa Bogh, any questions?

I'm curious. I'm going back to the cola portion of it on a just for more clarification moving forward. And I just want to make sure that we're doing it I just wanna understand it that we're doing it correctly. So I see here that according to the let's see. The May revision includes a 197,700,000 prop 98 general fund ongoing to reflect an increase in the cola from 2.41% to 4.31%.

So the total the total Super Cola is approximately 438 mill $4,438,300,000. From that, we are going to be, hopefully, using some of that funding for the paid pregnancy leave. Is that correct? Is that the the the optimal way to ensure that that funding is available to include it within that COLA, or would it be more we'd be safer to have a a a fund specifically just for family paid leave?

I'm just trying to figure out if it be included within the COLA, if it compromises the the amount or the guarantee to have it I'm trying to figure out why it's within the cola because that's for cost of living.

So Anita Lee with the Department of Finance. So, I think you heard my colleague as part of the earlier discussion talk about how, there are certain assumptions that go into the cost related to the paid pregnancy disability leave. The best estimates from the administration is that for community colleges, it'll be around 20 to 25,000,000. But we do want to make sure those costs are supported.

And so when we were thinking and preparing this package, one of the key considerations is we wanted to make funding available across the board to community colleges and to meet their particular needs.

And so, by including by by basically having that amount also cover the paid pregnancy disability, one, it covers the cost. But, two, to the extent that that funding isn't needed for that purpose, the community colleges have that money available for other needs. And so that is one of the benefits of doing it in that approach. Within the COLA? Yeah.

So it's the flexibility that I get Yes. The schools, the community colleges. Correct.

Okay.

And and part of that is when we were having conversations not only with the chancellor's office, but also hearing from community college districts, one of the things that the administration really heard was that the needs from one community college district to another looked a little different based on student population, demographics, etcetera. And so when the administration was preparing the package, that's something that we we that resonated and it's something that we kept in mind.

Okay. And then the jump, these even if it includes, say, you know, the $2,025,000,000 dollars in there, it's still quite a bit of additional funding on that. Is that is that also to create flexibility as far as negotiations at the local level? Or is that just

So I think maybe one point of clarification because I do see in the in the agenda, you were, you were asking a little bit about the total COLA amount, which is cited, which is the 400 and, 38,300,000. So I think one point of clarification is so a a portion of the cola is mandatory. So that's the 2.41 to 2.87. The 1.4 that we're talking about is the discretionary COLA, and that amount is about a 146,000,000. So I think I just wanted to Oh.

Kinda clarify that.

It's a slightly smaller amount. And so because that distinction is important because there's a certain part part of it where whether it's on the community college side or the TK side, we do bring things up to that mandatory kind of a COLA amount. So, really then, the conversation for additional funding kind of focuses as kind of the LAO mentioned on is, like, this 146,000,000, which is which is discretionary.

Thank you.

So I don't know if that get kinda gets to your question, but I hope that clarification No.

I'm glad you you clarified that. Thank you for for clarifying. So a 146 is the discretionary, and within that $1.46, the 20 to $25,000,000 is included in there. Yes. And then the additional, what is that when you say discretionary, what is that what can the community college use that for?

Because we're putting it as a COLA on top of the SCFF, it's gonna go out on the normal formula, related to that. And so then the community college districts have flexibility in how they use it. It's pretty it's pretty open ended. So for example, if they wanted, to use it for course development or supporting course courses, they could. If they wanted to use it for student services, they could as well.

And I think that just goes back to my earlier comment where from the administration's perspective, we had been hearing that the needs from individual community colleges could look a little bit different. And so from our perspective, we wanted to provide that flexibility so that they could make those choices.

Now, traditionally, is that pretty standard to include it within the COLA? Because in my mind, COLA is always the cost of living increases. So is that is that pretty standard? Do we have precedence on that or has this been done differently in prior years?

Yeah. So to my knowledge, it's been done once before and that is I believe in 22-23. It was either '21, '22, or 22-23 where the state provided an additional amount of flexible resources on top of the statutory COLA. And they did so for both K12 education and community colleges that year. They did so as a fixed amount as opposed to a percentage increase.

But in many respects, whether it's a fixed amount or a percentage, it's a distinction without a difference because you take that fixed amount and you convert it into a percentage, and then you increase the rates, within the student center funding formula, the local control funding formula. But one thing that I wanted to add is it, you know, the conversation will vary by district in terms of what those flexible resources are deployed for, how they're used, what the impact will be to a given district.

Some use what's called the bucket system. I think it's well over half of our districts where they've negotiated with their labor partners and a certain percentage of any new flexible resources will go toward, salary and benefit or will go towards student support services or any number of, buckets that they pre negotiated with their, campus community. But again, it it'll vary by district.

Overarching though, there is one overarching piece that applies here and that is the 50% law which mandates effectively for most districts that half of these resources are going to need to be used to support the cost of instructional activities in classrooms. So that requirement carries forward. That is a statutory requirement that applies to all unrestricted general fund resources that are subject to the 50% law. So that piece would continue moving forward.

And if I may also just add to this, when it comes to your question about how to fund the paid pregnancy disability leave proposal, the super COLA is one of several options you have. And so as an alternative to the super COLA, another option you could consider is creating a categorical program that supports specifically this new requirement. The benefits of that are that you would have more transparency around how much funding is going towards this requirement. You could better track utilization of it.

The drawbacks are that it does create less flexibility as my colleagues have discussed and also likely more administrative burden for both districts in the state.

So it's just to say that if you want to move forward with paid pregnancy disability leave proposal, tying it to the super coal is not necessarily the only option to do that.

That's a tough call. Because in my mind, I was that's what I was envisioning more of a categorical, you know, specifically for paid pregnancy leave. But then it's so it really does need flexibility because you really don't know how much you're going to be needing, and per campus and, within a campus. So it's yeah. I can see I can see the, the challenge there.

Let me follow-up on that. Tell me about your survey that you must have had across the entire state of California of all the different schools, the number of individuals that would be looking for that leave time in their lifetime. How did you how did you reach that? Because it's reflective of the number, dollars and cents. Right?

Audrey Bezos, Department of Finance. It is, based on a 2% utilization rate amongst women, which this, this, proposed legislation has kind of been around for a while, so we've been sort of kicking around this idea for several years.

But we did actually go to EDD and look and see what the participation rate was for schools that are participating in the state disability insurance program, and they were actually able to give us data that showed that 1.6% of women enrolled in state disability insurance annually sorry. Sorry. Sorry.

1.6% of the women enrolled with schools use that benefit annually. So we feel like the two percent is is a safe number.

Well, the reason I asked is because it's a great recruiting tool and retention tool because we're always looking for professors, teachers that that Wanna join the industry. And when we have others that feel it's, you're not receptive, you're not listening, well, I think this says we are listening, and I appreciate that. Thank you.

Thank you. I have just a couple of final comments, and that's around this enrollment growth piece. I know that we've talked about this previously. I know the May revision includes $2,000,000 Prop 98 general fund ongoing to maintain the governor's budget proposal to fund point 5% enrollment growth. But there are a number of campuses that have grown well beyond that, particularly in my district, but also I'm sure in the other senators' districts as well.

I know one of my campuses saw 9% growth over the last year, which is great. I mean, this is that's what we want. We want more of our students to be going on to colleges and universities.

So, I guess, why are we continuing to just, fund based off of that point 5% enrollment growth rather than us beginning to make the shift towards funding what actual enrollment growth looks like for some of these campuses if we know that we are underfunding many of these campuses that are basically serving students for no pay?

Again, we went with the COLA approach to provide maximum flexibility and I believe is what is the chancellor's office has said before, roughly half of the colleges are experiencing, you know, greater growth than what we are budgeting for. But that also means that half of college, community college districts are experiencing growth within what we are budgeting for. And so we felt it was more prudent to approach the problem that way.

To the extent the legislature wanted to bump growth, it would probably necessitate, you know, reductions in other areas. But that being said, we'd be willing to work with you on that.

Yeah. If I could just highlight from a system perspective, you know, the downside of not funding that unfunded enrollment growth and that is there is a restriction of access and that's because colleges can only afford to sustain those course sections for so long before they have to start pulling back on the number of course sections that are offered. And when that happens, that restricts access because you still have the students enrolled, but they can't get the course that they need or want.

And as a result, it takes them longer to complete their educational journey or educational program increases the risk that they stop out and don't complete. That's what we saw during the great recession.

And then, you know, I would also note on the COLA versus unfunded growth approach, there are distributional issues depending upon which approach you go with. The COLA applies to the rates globally, so it goes among all, with the exception of hold harmless districts and basic aid districts that don't truly benefit from that. Whereas, the unfunded growth, if funded, goes to those campuses that saw the growth above whatever is budgeted.

So, you know, there is that distributional effect if you were campus that didn't grow above, the budgeted growth level. You wouldn't see those additional resources.

But if you were one that was above it, you would, if that were to be funded.

Yeah. I don't think that this kind of one size fits all approach makes sense, and I think we need to begin the shift towards actually funding campuses based off of what their enrollment growth looks like. Right? The kind of taking the 3 year average, especially when we've been seeing such tremendous growth across so many of our community colleges.

I no longer think is the correct approach, and I totally understand that that's gonna require us to put more dollars towards your institutions, but I do think that's fair.

I mean, we, both in our K-12 system and in the community college system, have made it a practice of trying to fund our schools based off of the number of students that they've served. And so continuing to have them serve an increasing number of of students without providing them with additional dollars, I think it just flies in the face of that.

Yeah. Again, we've you know, we support the administration's proposal for the colo approach, but we'd be more than willing to, you know, work us out should you, should the legislature decide to go with a more growth centered approach to the, to the increases.

Yeah. We just add and based on yesterday's hearing just one component and that is within the Senate's plan was a re benching for childcare. If you were to do that based on history when childcare was pulled out of the guarantee in 11/12, those resources would come back into the guarantee and would be subject to that eighty nine eleven split.

So in theory, if you were doing that, that would also provide you with additional revenue opportunity or spending opportunity to potentially fund unfunded growth or other items that are priorities of the legislature.

Okay. That's it for my questions and I think for the committee as well. We'll go ahead and move on to the next section, which is the California Student Aid Commission. I know we kinda start already touching upon this. Senator Archuleta had some questions around the middle class scholarship.

So we'll dive right in and whenever you all are ready to get started.

Good morning. Hugo Solis Galena with the Department of Finance. I will be providing an overview of the May revision for the California Student Aid Commission. The May revision, requests several one time and ongoing adjustments to student financial aid, which includes a $4,800,000 one time general fund increase in 2025 and a decrease of $31,500,000 ongoing general fund in 2026 to '27, for the Cal Grant program.

A $95,500,000 one time general fund total programmatic reduction to true up the, 2025 to '26 middle class scholarship award program in 2026 to '27 because of a net decrease of $90,500,000 one time general fund accompanied by technical correction of $5,000,000 one time general fund, which was an increase.

Additionally, the 2027 to '28 appropriation increases by $10,600,000 ongoing general fund to true up the, 2026 to '27 middle class scholarship award. These amounts cover the 35%, unmet need level for the total cost of attendance for eligible resident, undergraduate students for the 2025 to 26 awards and the 17.5% unmet need level for the 2026 to '27 awards.

The May revision also requests provisional language for the middle class scholarship to specify that funding is provided to the student aid commission in arrears with the accompanying appropriation provided in the year succeeding the award year. Moving on, the May revision proposes the withdrawal of the governor's budget proposal for the Golden State teacher grant program, which provides a $14,400,000 general fund re appropriation. The withdrawal is the result of of revised projections identifying, the twenty twenty one to twenty two appropriation as being fully expended.

The May revision also requests statutory language to authorize the issuance of new Golden State teacher grant awards on any unspended general fund from the 2025 budget act until 06/30/2027. And it also continues the Golden State teacher grant with a request of 1,600,000 one time federal title two part a reimbursement funds. These one time federal funds support the Golden State teacher grant program for the 2026 to '27 academic year with statutory language to request the award amount remain at $10,000.

The May revision also requests $16,200,000 ongoing federal individuals with disabilities education act or IDEA reimbursement funds to extend the Golden State teacher grant on an ongoing basis beginning in the twenty twenty six to twenty seven academic year. The May revision also requests statutory language to specify the Golden State teacher grant funds, fund or awards funded through the IDEA federal reimbursement will be targeted towards students seeking special education teaching credentials with an accompanying statutory language to increase the award amounts to $20,000 for these students.

Finally, I will be providing an overview of the May revision proposal on California's implementation of the federal workforce Pell grant, workforce Pell Program. The May revision proposes $664,001 time general fund in 2026 to '27 to support, California Student Aid Commission or CSAC state activities to implement and part participate in the, federal workforce program, by determining program eligibility for, workforce Pell.

Accompanying this appropriation is $1,300,000 one time general fund in 2026 to '27 for the government operations agency or gov ops and the office of cradle to career data system, to establish new workforce and earning data linkages to implement the federal workforce Pell Grant program. The funding for CSAC and cradle to career includes provisional language stating that these resources are contingent upon the Department of Finance's review and approval of an expenditure plan specifying how they plan to use the funding.

This provides them with flexibility to adapt as additional federal or other guidance, subsequently becomes available.

The May revision also requests statutory changes to support the state's implementation of the federal workforce Pell Grant program as outlined in HR 1. This will make Pell Grant funds available to eligible students for short term workforce training programs. This concludes my presentation. My colleague, Anita Lee, and I are available to answer your questions at the appropriate time. Thank you.

Good morning, Chair and members of the subcommittee. I am Justin Hurst with the California Student Aid Commission. Overall, the May revision of the governor's budget provides crucial investments that support the state's major financial aid programs. We are appreciative of the administration's proposed investments in fully funding caseload for Cal Grant and the middle class scholarship.

Though we will note that the Senate's proposed plan as provided in the agenda packet, does provide, for maintaining the funding level for the middle class scholarship at 35% and will provide an even greater benefit to our students.

Similarly, the Student Aid Commission is appreciative of the ongoing investment proposed for the Golden State Teacher Grant Program and associated trailer bill language and continues to advocate for resources for this crucial program. Perhaps the most significant proposal that is included with the May revision is the funding that is set aside for workforce Pell implementation. This new program has the potential to allow Californian students increased access to key workforce pathways.

Workforce Pell represents a new state revenue stream from the Federal Government with the commission poised to work with our institutional and state partners in order to implement a framework for determining program eligibility. California would be joining only a handful of other states, being Georgia, Kansas, and Oregon, that have passed legislation to begin workforce Pell implementation.

The funding is targeted to short term stackable credential programs with demonstrated value add outcomes for students. This includes programs that have targeted workforce need, such as an eight week fundamentals of dental assisting program, a thirteen week automotive engineer repair program, and essential worker pathways such as those for certified nursing assistants and basic firefighting. While the commission appreciates the dedication of resources provided in the Mayra vision, we will not see eligibility for these programs immediately on July 1.

The review process alone is proposed to take up to ninety days, on top of the need for the commission to adopt emergency regulations through a similarly lengthy process. Another hurdle is that there is data collection necessary for program qualification that will require time and resources for initial implementation.

In addition, the federal regulations for workforce Pell were finally released on Monday of this week. As proposed in the trailer billing, which the commission sees the need for continued conversation with the administration and stakeholders in order to further refine the proposed implementation pathway. So as to both fully conform with these regulations, as well as to ensure that the provided resources are adequate to accomplish the state's goals with this program.

To that end, the commission respectfully requests that the legislature allow for more time for the initial implementing bodies to fully refine an implementation plan that limits state liability and sets up students and institutions for success in California. You have been provided with two resources today as a part of this testimony.

One is a coalition letter that highlights priorities for your consideration as we head towards the final budget. Priorities that include expanding existing stackable aid infrastructure, such as through the modernization of Cal Grant C, investing in our regional financial aid outreach programs, and notably a request to require the crucial partners involved in workforce Pell implementation to submit a joint legislative budget budget committee implementation plan by October 1.

A majority of adult learners struggle with basic needs and addressing the total cost of attendance, And this is the population that the commission hopes to center and elevate in these discussions. Second, you have received a process flowchart, which I will admit is quite dense, that may help to visualize the proposed workforce Pell program approval pathway as reflected through the administration's trailer billing, which The Student Aid Commission stands ready to work with the legislature, administration, and the student centered institutions that are eager to deploy these programs.

I'm happy to walk the committee through these resources and answer questions at the appropriate time.

Thank you.

Good morning, Chair Perez and Senators. Natalie Gonzales with the LAO. We have reviewed CSAC's May revision proposals and have a few issues for your consideration regarding the proposals related to the Golden State Teacher Grant Program and the federal workforce Pell Grant program. First, as mentioned, the governor proposes providing $16,200,000 in ongoing funding for the Golden State teacher grant awards. The proposal is targeted to special education teacher candidates.

However, it retains a broad definition of priority schools. If the legislature adopts this proposal, it could narrow the definition so that participating teachers would be required to serve in a smaller set of higher needs schools. The proposal also increases the award amount from $10,000 to $20,000 and the service requirement from two to four years. This has some tradeoffs.

On the one hand, the higher award amount will help grant recipients cover a larger amount of their college costs, and the longer re service will requirement will help keep special education teachers in high priority schools for longer.

On the other hand, fewer students are served with the larger award amount, and there is no clear indicator that a larger award amount is needed to attract applicants. Additionally, the proposal includes no ongoing funding for administrative costs, which CSAC will incur. Finally, though the proposal is to use federal funds, the state didn't receive any additional federal funding.

Instead, existing federal funded programs are being shifted into Prop 98 to make room for this additional spending, Meaning, if this proposal were to be rejected, it would free up funding for any Prop 98 priority. The May revision also has a proposal relating to the existing Golden State teacher grant program.

Specifically, it would provide $1,600,000 in one time funding in twenty six-twenty seven to extend the current Golden State Teacher Grant Program for an additional year. Though the identified fund source is federal Title II, Part A funds, Funding is fungible with Prop 98 General Fund because the May revision funds one program with both sources. Consistent with prior recommendations, we recommend rejecting additional funding for the existing program, particularly because it is not well targeted.

If the legislature were to reject this proposal, it would free up funding for any Proposition 98 priority. Regarding the Workforce Pell Grant program, as mentioned, Workforce Pell Grants are federal grants that will offer financial aid to students in short term, career focused training programs.

And the program expands upon the Federal Pell Grant program but has some key differences. The most notable difference is that the Federal Government has made it the responsibility of states to approve if a program is eligible for workforce Pell grants. As a result, states must establish processes for approving programs based on the federal requirements. The trailer bill language sets forth these processes. CSAC, in consultation with other departments, will be the authorized state entity to approve these short term programs.

Given the state has not implemented this type of program before, there are many state entities involved and, as mentioned, federal rules were just finalized this week. We encourage the legislature to be careful in developing the associated trailer bill language to ensure that the processes set in place are efficient, reasonable and clear for all involved parties. Additionally, as noted, the May revision proposes to provide CSAC with 664,000 in one time funding in 2627 to implement the workforce Pell Grant program.

Note as we wanted to note that the administration also provides Cradle to Career, another entity that will be involved in this, program with 1,300,000 in one time funding to implement this program. Under the proposed budget bill language, both CSAC and Cradle to Career would need to present their expenditure plans to the Department of Finance before funds can be disbursed.

Under the proposal, no JLBC notification is required. We have three concerns with this proposal. First, the administration is providing one time funding. Though the federal program is

ongoing and much of the associated administrative and data

related workload will also likely be ongoing. Versus Cisac needing to set versus CSAC needing to set up new processes related to workforce Pell grants. Third, the administration is taking an unusual approach by asking the legislature to appropriate funding before a specific associated expenditure plan, has been reviewed. Given these concerns, we recommend the legislature take the next couple of weeks to get some more information about the new workload needed, the associated cost, and then take action.

Lastly, we wanted to note that there does appear to be some urgency to resolve this, remaining budget item and the trailer bill issue related, to the trailer bill language given the government the Federal Government has noted that it will launch the program in July.

We'd be glad to work with legislative and department staff over the next few weeks as they finalize these issues. Thank you, and happy to take any questions.

Great. Thank you for your presentation. I have a number of questions, so I'm gonna ask a few, and then I'm gonna turn it over to my colleagues. So, first and foremost, you know, I I just wanna speak to the middle class scholarship program and the decrease that's being proposed there. I know Senator Archuleta brought this up as well.

The population of students that is eligible for the middle class scholarship has not decreased. In fact, it's continued to grow because you all have expanded eligibility before I was here, which is good. That's a positive thing. So we're going to be providing the same number of students with middle class scholarships, but we are cutting the amount of funding in half. So, can you just explain that to me and and why that would even make sense?

The May revision does not propose a cut to the middle class scholarship. Just like with the governor's budget, we the administration is proposing maintaining the middle class scholarship at its base funding level, which would be a which in the governor's budget was able to fund the 17.5% level of unmet need. For the May revision, the administration is proposing an additional $10,600,000 to continue to fund that same, level of unmet need.

A it's the I would just note that the increases that brought up the middle class scholarship to the 35% level of unmet need were one time in nature and were not, as part of the 2025 budget act. We're one time in nature and we're not intended to be ongoing.

So we know that our students need more financially, not less. Right? I mean, this has continued to be a challenge. We've passed bills in years past. I worked on a bill in years past on the Cal Grant equity framework that's gone and funded.

The middle class scholarship initially was only focusing on a certain set of students you all have since expanded that to include students that are lower income so that they would be able to apply and utilize some of those dollars because the cost of living has gone up significantly. There's cost of living adjustments sprinkled throughout this budget, not just for our higher education institutions, but also for Prop 98. That hasn't sprinkled down to students.

And so the cost of transportation, housing, everything else that they're having to pay for in addition to going to school is a a continued issue. So Aye, you know, I I I'm not quite clear, like, why we wouldn't try to, one, put more dollars towards this so that we can further expand this program at a time when we know that more students I mean, I have students talking with me about gas prices because this is something that's impacting them.

We know so many of our students, particularly community college students, have to travel very far to get to institutions. So what is it that we can do to kinda better meet that need that students have when we know the cost of living is continuing to skyrocket?

In terms of the middle class scholarship, the administration doesn't propose any increases or increasing the unmet the level of unmet need beyond the 17.5% level in the, for the 26, 27 award. But as part of the, 25, 26 award, it does maintain, the award coverage at 35% of unmet need, which is something that students would be able to receive, faster.

And if I may, Anita Lee, again, with the Department of Finance. I think some of Madam Chair's comments are choices in terms of where the state chooses to put their dollars. I think in hearing my colleague, there aren't a lot of changes that we made. A lot of the things that he presented are adjustments to reflect actual costs. And so, in thinking about sort of overall budget structure, the Administration has put forth sort of what our priorities are.

The Senate clearly has laid out its plan. I think the Assembly has as well, and I think we'll just continue to have those conversations as we move forward. I think the Administration is cognizant, just generally of the overall budget constraints. That's one of the things that the Administration has been focused on in terms of addressing kind of the future out year deficits. And so sometimes in this area when we're talking about financial aid, aid, these are general fund dollars.

They're outside of Prop 98, so the conversation is a little bit different. And so, investments in those areas would mean trade offs in other places. And so, Madam Chair's point is well taken. I think it's just a conversation about priorities.

No. Certainly. And I think, you know, I understand that, you know, we're about to and we are entering into this, like, three party negotiation that's going to happen, but a budget is a reflection of priorities and of values. And this is a conversation that we've had throughout my entire time both working with this administration as somebody that was an advocate on the outside and now being here as a Senator.

And what I have seen is that we've signed a lot of bills into law that have said nice things, but actually taking those things into implementation and putting dollars behind some of those efforts is not what's happened.

And so the priority, which I believe should be students and their success because that's where we get the greatest return on investment, I I don't quite see that there. And so when students are continuing to deal with the high cost of living and we're providing them with no additional financial support, we're not making any sort of adjustments for the cost of living, then we're kind of leaving them to fend for themselves.

And then we question and we wonder why they're not graduating in a timely manner and why we're having so many issues with filling the pipeline of the next workforce. This is part of the reason why. And any community college student, any UC student, any CSU student will tell you that.

I'm gonna go ahead and, move on, very quickly to just the workforce Pell implementation. So I know the US Department of Education released the final regs around federal workforce Pell yesterday. So given that they were just released, does the administration plan to revise the proposed trailer bill to reflect any changes in the rulemaking? Is there kind of any sort of major takeaways that you all have from that that, you know, we need to be taking into account as we're having this discussion?

As madam chair and my colleagues referenced, the rules did just come out. There are quite a few comments that we are still sorting through. The administration is open to amending the trailer bill language, if that becomes necessary. I think, maybe some key context that could be helpful in terms of how the administration approached its package could be helpful for the committee's consideration. The initial trailer bill language and the one time funding was presented as a package because there were a lot of uncertainties.

And so the administration really focused on what are the key activities that would be needed kind of immediately to get the program off the ground with full kind of recognition that additional details might come later, you know, package on. So we really kind of focused on sort of those initial steps. And so because of that, the existing trailer bill language, you know, hugged sort of the federal requirements that were that we we knew about at that time.

But obviously, you know, if there are significant changes to, the regs based on the final rules, we would evaluate that and consider to what extent, the the language needs to be updated. And kind of similarly related to the one time funding, I just want to make it, you know, very clear.

The Administration does recognize that there are likely to be ongoing costs. We are providing one time funds because there is such uncertainty in terms of additional federal guidance, you know, but also the number of programs that would be eligible to participate. Programs have the choice in terms of whether they offer it. So, there are a lot of uncertainties.

And so, from the administration's perspective, we really focused on kind of striking a balance, providing some degree of funding from conversations with CSAC and CTC and what kind of initial resources might look like, kind of providing that, but also giving them some flexibility, that's a provisional language, you know, for the spending plan, so that we could adapt, but with full recognition that we would need to continue conversations, in the future about ongoing resources.

So I think I just wanted to make that clear. The administration is not saying this is one time low workload. The reason why the funding is one time is really because of the uncertainty.

I just wanted to see if CSAC wanted to respond to that. Yeah. I just wanna highlight the concerns that they raised, particularly, you know, in the letter that they produced around, just some of the challenges that they're facing and and just looking for that staff support so that they can, you know, work on the implementation of workforce pal and and being able to have that kind of ongoing support.

So I think as we're figuring out what the federal the federal, program looks like and the new implementation of their policies, and they're also figuring out, like, what staff as needs are going to be. I appreciate you making the workflow, chart.

Just making sure that we're being flexible to meeting some of those changing staffing needs. And I I recognize that the federal administration has not been easy to work with and that they're constantly changing the direction that they're moving, and and trying to get answers from them has not always been easy.

So, but I I think we should do everything we can to make sure that CSAC is prepared, not just to be staffed and to respond to this new program, but also to answer questions from students and from families that are gonna have questions about Workforce Pell coming up as we're going through the implementation process. I remember when the FAFSA rollout was a mess, and, I was helping students with troubleshooting that, and it was CSAC.

We're critical role when there's bumps in the systems even with their federal systems.

I'm gonna go ahead now and see if Senator Archuleta, if you have questions.

Thank you. Let's talk a little bit about the California Student Aid Commission and how vital it is and and the involvement it gets involved with with not just the parents, but the students, the faculty, everyone else to try and and implement plans to help the students financially be successful, but stay in school at the same time. And, obviously, there's the Pell Grant and the various grants that are there.

But we're working with some of the state agencies such as EDD and so we can employ some of these students while they're in school. Is there is there a program that that, within the commission that does that?

Are we reaching out to the community? Because these are bright intelligent individuals that in some case they're struggling, they need not only the aid, but they need a future in in the industry that they might be studying. We're working with that.

Thank you for the question. CSAC absolutely is engaged with our labor agency partners, and, I would answer that question in two different ways. One in this is a part of the letter that we have provided is there is a lot of initial outreach that's done particularly to students that are of high school age on their financial aid pathways and how that can lead to long term workforce development opportunities for them.

And a lot of that outreach is done through our regional Cal SOAP organizations, otherwise known as the, California Student Opportunity and Access Program, and our regional coordinating organizations that help students navigate that financial pathway into institutions of higher education. And then the other aspect, that I would point to, and I think it's a part of this larger workforce Pell conversation, is workforce Pell as proposed by the Federal Government is directly geared towards programs of high need in the state.

Could be program by program as we have seen in other states if there are identified regional needs. But as a part of our partnership with the labor agency, we are working with the data that they currently have access to and will be building as a part of this process in order to identify those programs and determine some out in terms of value added.

So we view this as a as an opportunity to further the goals that you have highlighted, in order to tailor our student aid programs to to workforce

outcomes. And again, student success is completion but student success is staying in school sustaining themselves when some we hear are homeless, unhoused actually. We've heard stories of students living in their cars. We've heard stories that, they're trying to provide for a family, a a a new family, their existing family. And, and I think it's incumbent among all of us to keep them in school and succeed by the time they they finish the community colleges on onto our, universities and so on.

So, you know, it's imperative that we understand that the work you do with that commission is reflective of the success at the end. And that's where the funding is important as well. Were you gonna jump in on something, ma'am?

I was I'm Allison Hewitt, Department of Finance. I just wanted to be available because I'm here, on the workforce program specifically for the labor and workforce agency tie ins in our proposed language which are multifold. But there is a structure that's within the Trailer Bill language as well as the federal requirements that has to do with making sure that the programs that are funded lead to jobs that have measurable workforce outcomes. So that's all. Okay.

Thank you, Madam Chair.

The last piece that I wanted to to speak to is just regarding the the KEDA and the Dream Act application, the program that was established by the state several years ago. You know, we created a a application system for students who are undocumented or come from mixed status families to be able to, apply for financial aid, apply through a separate application away from the FAFSA because we know that our undocumented students are not eligible for federal aid.

I know that that's not included here and would be really interested in hearing from CSAC since we have you all here. If there are data numbers that show us, like, are applications increasing, are they decreasing? Like, what are the some of the trends that we're seeing?

And I do think that it's something the administration should be mindful of in terms of the needs that the student population has. And I I think most students don't even know that this program exists, that the KEDA exists, and that we open up this application. When we first launched it god. I forget when that was. Was that, like, 2016 or 2017?

I'm forgetting. It yeah. Almost ten years ago now, it it was it made a huge splash. There's a lot of conversation about it. But since then, I don't think that it's necessarily a program that we promote as much, and I think that there needs to be some investment made in us actually making sure people are aware, of the different financial aid options available to them.

Right? And undocumented folks may not be eligible for for federal aid, but that there is state aid available.

Yes. Thank you, madam chair, and thank you for your leadership on this issue in particular. The point that you're making is absolutely correct. We are seeing case numbers go down in terms of applications, and that is not reflective of the continued need for students, particularly amongst mixed status families in the state.

And that is happening at a time when we're hearing from the field that there is a lot of concern from mixed status families, particularly regarding some of the actions of the Federal Government and the safety of their own families.

As an option, especially for students throughout the state that may be worried about their own personal safety and as a result are foregoing filling out the

I appreciate that. And you acknowledging that even though we're seeing those applications go down, that's not an indicator or reflective of of the actual need. So I share that just because that's something that's top of mind for me that I've been discussing with different educational partners throughout the state. And, I think it's it's, a conversation that we need to to have, not just this year, but in the years to come. I think that's it in terms of the questions and comments that I have.

We'll now go ahead and move on, to the next section and apologize for being a little out, this being out of order, but it'll be on College of the Law, San Francisco, the campus safety and security resources.

Good morning, Chair and Members. Hugo Solis Galeana with the Department of Finance. The May Revision requests $1,000,000 ongoing General Fund for UC College of the Law San Francisco to maintain security services around their campus. Previously, the 2021 and 2023 Budget Acts included one-time appropriations for the same purpose. These are my remarks, and I can take questions at the appropriate time.

Good morning, everybody. My name is David Seward. I am the Chief Financial Officer for the University of California College of the Law, San Francisco, and I'm accompanied by our Chief Operating Officer, Rhiannon Bailard. I just want to start out by thanking the committee for making the time to meet with us today. I always do like to start off by saying who we are.

So, College of the Law San Francisco, formerly known as Hastings College of the Law. We are an affiliate of the University of California, are governed by a separate governing board, separate from the Regents, also appointed by the Governor, confirmed by the Senate, existed since 1878. So we are an independent law school in San Francisco.

We have a history of strong support from the Legislature, the administration, and we have benefited greatly from that support in fulfilling our public mission, which is to provide education of the highest quality to law students representing California's diversity, who go on to do great things in their careers. Recently, I was looking at the listing of the top 10 law schools that provide public interest attorneys nationally.

And it was striking to me because of the top 10, three were University of California law schools. We were number 10, proudly accompanied by UCLA and Berkeley. So the top 10 schools in the country providing public interest support, not including government but public interest, the University of California provides the top three of those schools.

We're extremely diverse, with 60% female, 60% folks of color, provide high quality legal education, 86% first-time bar pass rate, 93% job placement after graduation, nine months out of graduation. So we provide these services with the support of the State of California and student fees.

The school has had a strong access emphasis since the 1960s. Historically, this is in the 50s, the school had an open enrollment policy. They would basically take all comers, and they would flunk out 30 to 40% of the class. And that was during the Willie Brown era.

He was one of our alums. In 1969, the school established the Legal Educational Opportunity Program, whereby we take chances on people. 20% of our entering class comes in on factors other than metrics, other than GPA, other than LSAT test. They are screened by virtue of looking at what they've overcome in life, their prospects for future success. And we've benefited mightily from that.

And I think it's reflective in the loyalty of our alumni base. But also, we support ourselves off state appropriations and student fees. We are not inclusive in the compact that higher ed negotiated with the Governor, because we are not enrollment driven. Our emphasis is on who we can bring in, successfully educate, and successfully provide jobs for. We don't want to be a school that gives you a diploma and there's not much you can do with it.

So the Department of Finance recognizes that. So we're treated separately from the UC system and CSU, but we're part of it. We enjoy many services. We buy services from UC: payroll, health benefits, investment management, some safety and security aspects. But we have to sort of float on our own bottom.

So with the Governor's budget, we were held flat year over year. Some years we do better than the University of California, some years we don't. It's all a function of the policy choices of the Department of Finance, the administration, and the Legislature. The May Revise provides much needed relief with a $1,000,000 allocation to support our security needs.

And I think security is probably a misnomer. We have a unique program that I think I'll let our Chief Operating Officer speak to, because she's the one who operates it. But it is extremely beneficial. Our next biggest financial challenge, quite frankly, is we are represented by the same unions that cover the UC system. We have settled with AFT.

We have settled with the UAW. With the recent settlement between UC and AFSCME, we expect to get back into the negotiations once again to close that contract out. And quite frankly, we'll be hard pressed to do so without dipping into our reserves. But with that, I'll turn it over very briefly to Rhiannon Bailard to talk about our security program.

Thank you, David. Honorable Chair Perez and subcommittee members, Rhiannon Bailard, Chief Operating Officer at UC Law. And just to speak to our safety practitioner program, it has been incredibly successful, incredibly transformative. It was implemented during the height of the pandemic. Our campus is located in the heart of the Civic Center, Mid-Market, and Tenderloin neighborhoods of San Francisco.

Incredibly hard hit during the pandemic. Implementation of this program resulted in a transformation, not only for our own community, our faculty, staff, and students from UC Law San Francisco, but also for faculty, staff, and students from other institutions. At our campus, we have what's called the academic village, which is an intersegmental partnership that we share with other institutions of higher education. We share our academic and programmatic spaces. We share our housing.

So the beneficiaries of this program are not just UC Law San Francisco, but they are also those intersegmental partners. Just as examples of that, UC San Francisco has housing on our campus. 35% of our existing housing units are utilized by UC San Francisco and other UC partners. UC Davis provides a Master's of Business Analytics on our campus. San Francisco State, they are closing their downtown campus and relocating their Lam College of Business to our academic village this July.

And we also have a letter of intent with the California Chancellor's Office of Community Colleges for additional shared campus housing. So this $1,000,000 ongoing allocation is providing dividends not just to our existing campus population, our existing academic village partners, and our incoming academic village partners. It also provides additional support and dividends to our community, the Tenderloin, which of course is a historically disenfranchised neighborhood. So we are incredibly grateful for the May Revise allocation.

Florence Bouvet with the LAO. We recommend the Legislature consider several issues related to the proposed $1,000,000 ongoing General Fund appropriation for campus safety at the college. First, as I noted, unlike the rest of education, the Governor's budget does not include an ongoing base increase in 2026-27 for the college. Second, the college is, however, raising its tuition rate in the coming academic year, so it will have some new revenue to cover higher operating costs.

Third, while spending within the college's core operating budget is effectively fungible, the proposal is strictly intended to promote campus safety for students, staff, and faculty.

And finally, based on information provided by the college, the augmentation would support the current level of campus safety spending rather than expand the security service. And that concludes my comments. I'm happy to answer your questions. Thank you.

Alrighty. I appreciate the presentation, and I have to say I'm really impressed to hear about the massive coordination that's happening between all of the systems in San Francisco and the shared housing. So that's very exciting. Unfortunately, I'm familiar with the challenges that the Tenderloin area has faced in San Francisco. So I can understand the added need for security and also appreciate that this will not just be for the UC, but also for some of those other institutions you'll be housing within your corridors.

Do my colleagues have any questions?

\I'd also like to express my appreciation for you being here and your enthusiasm. I think it's a great opportunity. College of the Law in San Francisco seems like you open up your doors to everyone, which is nice. You mentioned the LSAT.

And we find kids that are just bright and intelligent that just shake up a little bit when they're taking a test. But they have community pride. They have community involvement. They're part of the city or part of their communities up and down the state, and giving that opportunity.

I guess you're looking at, I think the new way of education now is to take people's life experience and their own personal life experience in their jobs or whatever they've done, to be able to have the drive and desire to finish.

And I'm the Chair of the Military and Veterans Committee, and so I deal with veterans quite a bit. And they have this sense of drive that's just incredible. To reach out and recruit some of these veterans to think about law, especially a welcoming school like that where the housing can be there. And just bringing them home is so important.

So I'm hoping that that funding is going to be there and continued for the future, because you've just made a fan, and I appreciate it. Thank you, Madam Chair.

Thank you, Senator Archuleta. That's it for this item. We will go ahead and go on to our final item now, the trailer bill language. We can have staff come up and make their presentation, and then we'll move on to public comment.

Good morning, Chair and Members. Alex Anaya Velasquez with the Department of Finance. As noted in the agenda, the Governor's May Revision proposes a variety of reporting changes or trailer bill changes as it relates to reporting requirements for both the UC, CSU, and, for some reports, the California Community Colleges. I'd like to echo that these technical changes are merely shifting some of the reporting from annual to biannual and also consolidating some of the reports.

However, the May Revision does not propose any programmatic changes to these reports.

This concludes my remarks, and I'm happy to take any questions at the appropriate time. Thank you.

Florence Bouvet with the LAO. So out of the six trailer bill language proposals that are included in the agenda, we have some concerns about the first three proposals. First, regarding the housing data collection report, we recommend rejecting the consolidation with the student housing grant program report, as keeping the reports separate would recognize that they serve different purposes. We also note that it's unclear whether the segments currently report all the data required by statute, particularly information on housing wait lists and veteran students.

Second, regarding the housing grant proposal report, again, we recommend keeping this report separate from the reports on student housing data collection, though both reports could be due at the same time.

And more broadly, the Legislature may wish to review housing related reporting requirements, as additional housing reports have been added over time and some consolidation may be possible elsewhere in those reporting requirements. And finally, regarding the basic needs, mental health, and rapid rehousing report, the May Revision proposal makes three changes to existing reporting requirements, and we have three recommendations to match those changes.

First, we would recommend the Legislature approve the shift from budget bill language to trailer bill language, as this will help ensure continuous oversight. We also recommend that the Legislature approve the consolidation of reporting on those student needs to reduce duplication. And finally, we recommend rejecting the proposal to move from annual to biannual reporting.

We believe that annual reporting remains warranted because these programs continue to receive ongoing state funding, are of significant legislative interest, and the state is still assessing program outcomes relating to those three issues. Thank you. That concludes my remarks.

Good morning. Mark Martin representing the CSU. We're really appreciative of the administration's proposal here. I think I would just make the points that the reporting changes do not limit information to the Legislature. The same information would be presented.

And I would actually argue that consolidating some of these reports will help transparency. I think right now we have multiple student housing reports, different kinds of basic needs reports. I think it would be easier for the Legislature and the public to find this information if it was all in one place instead of spread out across multiple reports. Obviously, finally, it would definitely reduce our workload slightly and we're appreciative of that. Thank you.

Seija Virtanen, University of California. I'd like to echo CSU's comments. We appreciate the Governor's efforts to consolidate reports and reduce administrative burdens, and we also support these trailer bills. Thank you.

Thank you for your presentations. My only comment I'll make is just uplifting. I think some of what the LAO mentioned around both report timelines, consolidating reports, really simplifying that process where we can, I think, for our systems makes a lot of sense. I know that all of these things take time and so I'm very mindful of that and all the hours that go into producing some of these things. So however we can streamline and not make things duplicative.

I completely agree with you all. Any other comments by the members? Okay. So we will go ahead and, we are now done with the items on today's agenda. I appreciate everyone's patience and being here to provide reports and updates.

We'll go ahead and get started now with public comment. If you all could please line up and use the mic at the railing, and you'll be timed for one minute. Thank you.

Great. Thank you, Chair and Members. Tiffany Mok on behalf of CFT, a union of educators and classified professionals. We want to first urge the Legislature to use existing funds to fund part-time faculty community college office hours, as well as to allow for part-time faculty to access dental and vision healthcare benefits. We also propose to allow current adult education consortium funds to be used for senior courses.

In regards to the May Revision proposals, further, we would urge your support for the Super COLA for both SCFF and hold harmless districts, mandating the paid pregnancy proposal, support fully funding growth, support the Chancellor's Office proposal to eliminate the growth cap and allow for funding in districts in the current year. And then on behalf of the UC members, we want to support the College of the Law proposals that were just heard.

And finally, on behalf of the members of our private higher education institutions, we want to thank you for your steadfast advocacy for the Middle Class Scholarship. So thank you.

Good morning, Chair and Members. Jason Henderson on behalf of the Faculty Association of California Community Colleges. FACCC appreciates the May Revision's proposed 4.31% SCFF COLA and continues to strongly support preserving COLA investments for all community college districts and categorical programs. As inflation continues to impact colleges, faculty, and students, maintaining stable and predictable funding remains critical to institutional planning and student success. FACCC also supports inclusion of the paid pregnancy disability leave providing fourteen weeks paid leave for employees.

FACCC also at this moment highlights the need for a stakeholder driven working group to revisit, evaluate, and modernize the SCFF. Finally, FACCC supports the continued investment for the student support block grant. Thank you.

Thank you, Chair and Members. Mark MacDonald on behalf of a number of local community college districts, including Los Angeles, Mount San Jacinto, San Diego, and Los Rios. Appreciate the discussion around the COLA, particularly given the expected workload increase for districts, but also really appreciate the conversation around growth and the need to fully fund growth at the colleges.

On behalf of National University, I want to uplift the conversation around Workforce Pell and point out that independent institutions under the trailer bill language are not included, and we would urge you to include them moving forward. Thank you.

Good morning. Anna Mathews on behalf of the California Community College Independence Union. We are grateful for all the increased investments in the California Community Colleges, especially for the paid pregnancy leave provision. That being said, echoing the concerns of Senator Perez and Ochoa Bogh, hold harmless colleges that do not receive COLA will not be able to equitably provide these benefits to their faculty under the current language.

We would hope to see a fund specifically for paid pregnancy leave as opposed to the current discretionary language within the SCFF.

Alternatively, this could be an opportunity for us to rectify the longstanding COLA inequity, excuse me, for hold harmless colleges. Look forward to collaborating on this issue. Thank you.

Thank you, Chair and Members. Sean Reagan, I'm the Vice President of California Indian Nations College, asking you to support the budget ask that we have before the committee for funding for tribal colleges and for California Indian Nations College in particular. Tribal colleges play a vital role in the state and serve our first people, and we appreciate your support and ask for you to support that budget ask. Thank you.

Good morning, Madam Chair and Members. Dominique Denee on behalf of EdVoice and nearly 50 organizations. We appreciate the additional $17,800,000 in the May Revision for the Golden State Teacher Grant Program. The program is successfully addressing the teacher shortage in our highest needs schools, and we urge you to continue funding at $100,000,000. $100,000,000 in funding would equate to 10,000 teacher placements in our highest needs schools.

As we know, a great teacher is one of the most important factors in a child's success. If the General Fund constraints make that difficult, we suggest funding the program with Prop 98. With Prop 98 revenue up, we just urge you to find the money to make this happen. Thank you.

Good morning, Madam Chair and Members. I'm Christina Di Caro, here on two items. On behalf of the California Veterinary Medical Association and a large coalition of animal welfare groups, we're requesting $5,000,000 in funding for the UC Davis School of Veterinary Medicine and Western University in Pomona to create high quality, high volume spay-neuter programs at these two schools. On behalf of the California Library Association, we are requesting funding for the California Library Services Act and the English as a Second Language Literacy Program held at our libraries.

I want to thank you, Madam Chair, and your consultants for their incredible work this year on the library issues.

We're working hard to find a path forward. Thank you.

Good morning, Chair and Members. Gabriela Chavez with UDW, representing over 225,000 home care providers and child care providers in strong support for the adult learner demonstration project. The program gives low income adult workers a chance to move beyond entry level jobs and build stable, better paying careers. Thank you.

Good morning, Madam Chair and Members. Kabria Payden on behalf of EdTrust West, here in support of the following May Revise higher education investments that expand opportunity and advance equity. We support and maintain $100,000,000 for dual enrollment and request $10,000,000 for technical assistance to strengthen equitable implementation and coordination between CDE and the Chancellor's Office, the SCFF COLA increase to 4.1%, and $100,600,000 student support block grant. We also urge $10,000,000 in ongoing support for student financial aid administration at the Chancellor's Office.

In addition, we support the proposed $17,800,000 for the Golden State Teacher Grant that asks for $100,000,000 to help with the teacher shortage in high needs schools. Finally, we respectfully request the Legislature to allocate additional resources to strengthen and expand Cal-SOAP and regional community organizations to help students apply for financial aid. Thank you.

Good morning, Madam Chair and Members. Sabrina Means on behalf of Pasadena City College. First, we wish to thank the Legislature for passing AB 1348 Bradford in 2024, which established the designation of California Black Serving Institutions. Currently, California's governing board for Black Serving Institutions has approved 31 colleges and universities statewide for the initial Black Serving Institution designation, including two University of California campuses, three California State University campuses, one private independent institution, and 25 California community colleges.

We're requesting the establishment of the designation of California Black Serving Institutions grant program, which would provide a targeted approach to improving student outcomes and sustaining effective campus based supports, especially as federal funding and related programs remain uncertain.

The request is for $25,000,000 in one time funds comprised of both Prop 98 funds for community colleges and General Fund support for other higher education institutions. This would generate each Black Serving Institution with $250,000 just for applying for the grant, and a supplemental grant would be determined by the California Governing Board for Black Serving Institutions. Pasadena City College respectfully requests your support for trailer bill language in the 2027 Budget Act and the funding of $25,000,000 to implement the Black Serving Institution Grant Program. Thank you.

Hi. Sharing gratitude, Chair and committee and staff, for your work on these important issues. Aaron Kunst, basic needs advocate. I strongly support the student support block grants and increasing those further if possible. The $20,000,000 UC emergency funding for basic needs and disability services request, and additional funding to protect students from the harmful federal cuts we're seeing.

With college affordability resources shrinking, enrolling more eligible students in public benefits like CalFresh is vital for both students and California's economy. Today, 75% of eligible students aren't getting the help they qualify for. That's why our coalition urges your support for a $20,000,000 or a $10,000,000 request to establish an innovation hub for public benefits. Thank you so much.

Hi, Chair and Members. Back again. I'm Hossein Yajan, policy intern for uAspire. I am glad that you all look to preserve the Middle Class Scholarship, and also request establishing the innovation hub for public benefits with a $10,000,000 one time investment, which would provide centralized training, technical assistance, and implementation support to improve public benefits access. And we support the Workforce Pell implementation and are requesting $5,300,000 for CSAC to expand and sustain outreach efforts to increase awareness and completion of the application.

Good afternoon. I'm sorry, good afternoon. I'm Tara George with uAspire, echoing my colleague's earlier remarks. We request that you reject the cuts to the Middle Class Scholarship program, establish an innovation hub for public benefits with a $10,000,000 investment, and support Workforce Pell implementation.

Thank you.

Good morning, still morning, Madam Chair, Members. Parshan Khosravi with uAspire, California Policy Director. Echoing what our amazing students have just shared, we appreciate you all's efforts to try to reject the cuts to the Middle Class Scholarship and preserve the funding for it. Those financial aid dollars are really, really essential.

In addition, we want to direct your focus to the $5,300,000 ask on CADAA completion, where we have more work to do. And finally, we really would like to see more work done at the community colleges level on financial aid capacity building and support as well. There's an ask on additional block grants for the community colleges.

We support these asks, and we would like some of the dollars to be directed towards, specifically, $20,000,000 directed towards financial aid advising and administration, as well as $10,000,000 towards establishing a public benefits hub to help with CalFresh outreach and completion.

And the final piece is, as many folks have shared, we are heartened to see the efforts to implement the workforce bill and looking forward to seeing those happen, but with additional guardrails in place, as well as potentially reforms made to the Cal Grant C program so we could align it better with Workforce Pell.

Thank you all.

Hello. Rachel Scicluna on behalf of the Institute for College Access and Success. As the state develops its Workforce Pell approval framework, we recommend the Legislature establish a robust approval process that not only meets federal requirements, but also includes guardrails to ensure students are enrolling into high quality and affordable programs with strong outcomes. To that end, we support the Governor's proposed implementation funding for Workforce Pell and encourage continued collaboration to ensure sufficient resources and clear administrative responsibility for a successful first year of implementation.

Next, we urge the Legislature to consider strengthening the Cal Grant B Access Award via a modest but meaningful $22,000,000 investment.

This proposal does not put other financial aid priorities at risk; rather, it ensures that students with the greatest financial need, particularly community college students and other low income Californians, are not left behind as living costs continue to rise.

Finally, to ensure students receive the support they need to complete a FAFSA or CADAA and that community college financial aid administrators have the resources they need to handle increased verification, we continue to ask for a stand alone $10,000,000 ongoing allocation to support the student financial aid administration and/or clear expectation that this activity be funded within the student support block grant. Thank you.

Good morning. Bella Kern on behalf of Santa Monica College, El Camino College, Cerritos College, and Pasadena City College, all in support of the proposed Super COLA. Additionally, Santa Monica College has submitted budget request letters to increase the Student Support Block Grant to $250,000,000 using the funds from the settle up proposal. Thank you.

Good afternoon. Andrew Martinez, Community College League of California. We are appreciative of the Super COLA, but we have concerns about implementation of the language. We want to make sure that all districts can get access to those dollars and possibly ensure that the implementation date actually works for our colleges as well. We also want to encourage the Student Equity and Achievement Program to get a COLA, as it has not gotten a COLA since 2019, and also want to encourage the investment in enrollment growth.

As the Chancellor's Office mentioned earlier, it's at 3.5%, and the 1.5% is great, but we do need to do more for that. Thank you so much.

Good morning. Hello again. My name is Natalia. I'm a second-year student at UC Berkeley and the Disability Justice Officerfor the UC Student Association. I'd like to thank you all again, especially Chair Perez, for supporting student basic needs and disability services.

UCSA urges the Legislature to fund $20,000,000 in one time emergency assistance for basic needs and disability services to stock capacity and house case management for students across the UC. Students with disabilities have fought tooth and nail to earn a place at the UC, and we rely heavily on disability services to learn on equal footing with our classmates. Continuing and scaling funding as enrollment rates increase is essential to ensuring that the investments in our learning are realized.

I have seen firsthand what happens without proper funding for our services as we currently face an understaffing crisis. Students drop classes because there isn't enough support to aid course accessibility.

Reasonable accommodations are rejected by professors when specialists are pressed for time to advocate on our behalf, and our needs are going unmet, which exacerbates the stress caused by our existing mental or physical conditions. We really appreciate your continued dedication to creating a fair place for students with disabilities on our campuses, and we're eager to work together with our state leaders to prioritize student success in the final budget. Thank you all.

Hello. Good morning. I'm Bibi Hamida-Hashmat, a UC Davis student, and I'm here on behalf of UC Student Association in strong support for the $10,000,000 one time investment to establish a public benefits innovation hub. Many eligible college students are still not enrolled in established programs like CalFresh, Medi-Cal, and CalWORKs because of the confusing system and lack of support. This hub would provide centralized training and technical assistance on campuses to help students access benefits they already qualify for.

Investing in public benefits access directly supports students' success, improves graduation rates, and brings billions of federal dollars back into California's communities. At a time when affordability challenges are growing, this investment is critical for students across our state. Thank you so much.

Good morning, Chair and Members. My name is Cindy Lee, a student at UC Santa Barbara, on behalf of UC Student Association and students across the state. We appreciate the Governor funding the fifth year of the compact, but also understand the importance of equity through basic needs and disability services, like our request for the $20,000,000 one time funding, as well as financial aid programs like Cal Grant and MCS, and indexing those dollars to inflation.

We urge the Legislature to consider strengthening the Cal Grant B Access Award via a modest but meaningful $22,000,000 investment. This proposal does not put other financial aid priorities at risk.

Rather, it ensures that students with the greatest financial need are not left behind as living costs continue to rise. Thank you.

Chair and Members, Austin Webster with W Strategies on behalf of the Academic Senate for California Community Colleges, the Student Senate for California Community Colleges, the California Community College Association for Occupational Education, EOPS Association, and MESA Association. We'll align our comments with the Chancellor's Office and our system partners in the need for growth.

Also want to express our concern as shared by the committee regarding the equity of the implementation of paid pregnancy leave with the Super COLA, and then also just generally support additional funding for financial aid across the state. Thank you so much.

Good afternoon, Madam Chair and Members. I'm McKenna Mustazza with NextGen California, and also here on behalf of our partners at Young Invincibles, and both members of the Financial Aid Big Table. We support the Governor's proposed implementation funding for Workforce Pell under CSAC to administer and encourage continued collaboration between the administration and the Legislature to ensure sufficient resources and clear administrative responsibility for a first year of successful implementation.

Workforce Pell presents an opportunity to draw down federal dollars and better support older and returning students seeking to upskill, reskill, and improve their economic mobility through short term programs. As the state develops its policy framework, California should establish a robust approval process that not only meets federal requirements, but also includes guardrails to ensure that students are directed towards high quality and affordable programs across the state.

We also request consideration of aligning the Cal Grant C program to further these new federal dollars. Thank you so much. We look forward to working with the administration and Governor's office.

Clifton Wilson on behalf of the California Animal Welfare Association, here in support on behalf of the $5,000,000 budget request for the implementation of the high quality, high volume spay and neuter certification programs at UC Davis VetMed as well as Western University in Pomona. To be brief, there's just a shortage of vets overall. Shelters are overwhelmed. We need this vital funding to just help alleviate some of the pressures overall. Thank you.

Deanna Latour-Jarquin with Majority Advisors, on behalf of Rebuild Local News. We're asking the Legislature to add $15,000,000 to the budget to support the California Local News Fellowship, which is housed at the UC Berkeley School of Journalism. An integral part of the proposal is also the Propel Initiative led by the Robert C. Maynard Institute for Journalism Education in partnership with American Community Media, California Black Media, and the Latino Media Collaborative.

These investments support trusted, fact based local reporting and ensure Californians in every community and every language have access to reliable civic information. Thank you.

Good afternoon, Madam Chair and Members. Brittany Benesi on behalf of the American Society for the Prevention of Cruelty to Animals, requesting your support for the $5,000,000 budget ask for UC Davis and Western University to develop a curriculum for high quality, high volume spay-neuter, in alignment with Senate Bill 1233, which passed a couple of years ago, in order to address California's pet overpopulation crisis and modernize our veterinary schools. Thank you.

Chair, Members, Nickolaus Sackett on behalf of Social Compassion in Legislation in support of the $5,000,000 for UC Davis and Western vet schools for high volume spay and neuter programming. I'll just add that some of the organizations that do high volume spay and neuter clinics have a hard time finding vets that are trained to do the work and have to look out of state. So this would go a long way towards keeping that workforce in the state.

Good afternoon, Chair and Members. Eric Paredes with the California Faculty Association, representing over 29,000 faculty members who work in the CSU system. Just want to appreciate legislative leaders and the Governor for prioritizing higher education, but just want to urge all of you to support Assembly Member Fong's proposal to fully fund the compact for the current year and then also for 2026-27.

And then I will just add that we encourage the Legislature to enact accountability measures and also to prioritize funding instruction over administration. We believe it's important that we fund the classroom and not the boardroom.

So, yeah, thank you so much.

Good afternoon, Madam Chair and Members. Christopher Sanchez with the Mesa Verde Group, here on behalf of Gavilan Community College in Gilroy, California. Appreciate the flexible dollars that were in the May Revise and would encourage the Legislature to find funding opportunities for enrollment growth, student housing, student transportation, and basic needs. On student transportation, I would just say we're in the Central Coast. We are the lifeline for many students and their families, and transportation is a significant issue for our students.

Thank you, Madam Chair.

Thank you. Thank you to everybody that participated in public comment. For those that wanted to make public comment or weren't able to, please feel free to email over those documents to the committee. We're happy to receive them and want to receive all that documentation.

I want to thank everybody for participating in today's hearing, both our presenters as well as those that waited until the end. That concludes our agenda, and this meeting is adjourned.