Assembly Budget Subcommittee#2 on Education Finance Reviews Community College Budget
The Assembly Budget Subcommittee #2 continued its process of simply listening to the community college budget issues without taking any action. At its meeting on April 19, the Subcommittee reviewed the following budget issues:
• Nursing Enrollment Expansion
• Career Technical Education
• Noncredit Rate Funding
• Equalization Funding
Nursing Enrollment Expansion
The issue for the Subcommittee members to consider is the Governor’s Budget Proposal to continue to provide $14 million in ongoing Proposition 98 funds for enrollment expansion of nursing education programs.
The Governor’s Proposed Budget includes $10 million in ongoing Proposition 98 funding to continue to support enrollment growth of nursing education programs at community colleges. It also includes $4 million in ongoing funds, an amount which has been appropriated for this purpose pursuant to AB 87 (Chapter 514, Statutes of 2001).
The Subcommittee expressed general support for this budget item. However, interest was expressed in how these funds are allocated to local districts.
Career Technical Education
The issue for the Subcommittee members to consider is the Governor’s $50 million proposal to continue to support career technical education programs. In the 2006-07 Budget, the Governor is proposing a continuation of the $20 million for career technical education projects (provided in the 2005-06 budget) and is augmenting this amount by $30 million for a total of $50 million in ongoing funds for this purpose.
The Legislative Analyst’s Office (LAO) has raised the following concerns: (1) the proposal does not include a broad vision for revitalizing career technical education across the state, (2) it does not have a proposal on how it would spend the additional funding, and (3) the proposed augmentation is premature, given that the initial grants have not yet been awarded. The LAO recommends that the Legislature not expand the funding for this program until the Chancellor’s Office has evaluated the progress of the initial efforts and prepared a proposal for the new funds.
Noncredit Rate Funding
The issue for the Subcommittee members to consider is the community college budget request of $30 million for increasing the funding rate for noncredit students, which was rejected by the Department of Finance. This funding is based upon a formula that sets the current level for noncredit students at $2,164 per FTES. This amount is less than half of the amount provided for credit FTES, which averages about $3,700.
The Board of Governors is proposing to fund the $30 million to increase the noncredit rate by redirecting funds from unspent enrollment growth funds in the current year.
The Department of Finance continues to oppose any increase in the community college noncredit rate because of cost pressures, as well as their opinion that the K-12 adult rate would have to be increased if the community college noncredit were to be increased.
Equalization Funding
The issue for the Subcommittee members to consider is the proposed $130 million for equalization. In his 2006-07 Budget, the Governor included that the $130 million for equalization would “complete” the $240 million commitment of equalizing the districts to the 90th percentile.
The Subcommittee was made aware that the System has reached a compromise on the allocation of the $130 million using a “blended approach.” An additional $31.2 million would be needed to fully implement the compromise reached by the System, therefore bringing the total of equalization funds needed for 2006-07 to $161.2 million.
The Subcommittee and Department of Finance are concerned as to how the equalization formula would work if SB 361 (the System’s new funding proposal) is approved by the Legislature and the Governor. Conversation with the Governor’s Office is continuing regarding SB 361.
Finally
The Subcommittee adjourned without taking any actions on the above items. They are awaiting the release of the May Revise before resolving all of the community budget issues.
