Budget Subcommittees Complete Work
California’s Assembly and Senate Budget Subcommittees on Education Finance met this week and took their final actions for the year, including actions on the California Community Colleges (CCC) Budget. Below are some details of their deliberations:
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Attention ACCCA Members – We Need Your Help to Restore $80 Million in Community College Funding.
The Senate and Assembly budget subcommittees have completed their work on the 2007-08 community college budget. The budget adopted by the respective houses will now be reconciled in the budget conference committee. Based on the actions of the budget subcommittees, ACCCA is encouraging its members to support the Assembly’s version of the community college budget. Read the rest of this entry »
New legislative information is available from ACCCA Advocate Arnold Bray.
Click here to download Under the Dome. Some of this week’s highlights include:
New articles are available from ACCCA advocate Arnold Bray.
Click on the links below and get the latest.
New articles have been posted by Arnold Bray, ACCCA advocate.
Click here to read the latest, including:
Arnold Bray, ACCCA Advocate, has provided a list of bills that have been introduced that are of interest to community college administrators.
Click here to read the bill summaries.
New articles from Arnold Bray have been posted. Click here to read about:
College Board Reports on Nationwide College Costs and Financial Aid
Governor Signs Controversial Capital Facilities Fees Bill
September Revenues and Employment Tracking Forecast
Interest Rates Unchanged: Implications for California
How Many Confidential Employees are We Allowed to Have?
College Board Reports on Nationwide College Costs and Financial Aid
The College Board, a nonprofit organization known primarily for its Scholastic Aptitude Test (SAT) program, conducts an Annual Survey of Colleges, which has just been completed for 2006. This annual survey is distributed to more than 3,000 postsecondary institutions nationwide in order to collect data on enrollment, tuition, and financial aid, among other aspects of higher education. From this survey, the data was analyzed and two reports were prepared. What follows is a summary of the results as contained in each of the two reports.
College Costs
The first report, Trends in College Pricing, contains the results of the data collected on tuition, fees, room, and board at these institutions. The report distinguishes between the published prices —the posted costs of attending the institution—and the net price, which takes into account financial aid, federal tax credits and deductions, and other offsets to the cost. Most of the analysis provided in this report is focused on the published prices for full-time undergraduate students.
Interestingly, the report specifically notes the impact of California community colleges on these results. Since the per-unit fee is actually being reduced in California this year, and since 22% of the nation’s two-year public college students are enrolled in California community colleges, California’s data had a dampening effect on the nationwide increase in cost at the two-year public sector institutions. If California were removed from the calculation, the cost increase for public two-year institutions would have been 5.1%, rather than the 4.1% reported.
Because tuition and fees apply to all students attending college, some of the report is dedicated to these two components, eliminating the room and board costs.
The report also looks at the net price of college for students, which is calculated by taking the published price and reducing it by the average grant aid and tax benefits that students receive. Full-time students in private four-year institutions receive about $9,000 in grant aid and tax benefits per year, as compared to $3,100 in four-year public institutions and $2,200 in two-year public institutions.
In looking at the trend of the last ten years, published tuition and fees at private four-year institutions increased at an average rate of 5.5% per year. For public four-year institutions, the average annual increase was 7% per year, and for public two-year institutions, the increase was 4.5% per year. It is noted that, although the average two-year public institution tuition and fees increased at an overall lower rate over the past decade, they tend to fluctuate more year-to-year than the tuition and fees in the four-year institutions. Certainly, California community colleges are influencing those results as well.
Student Aid
A second report, Trends in Student Aid, contains the results of the survey data on the amount of financial assistance provided to postsecondary students throughout the nation, which includes grants, federal loans and work-study assistance, and federal education tax benefits. Private loans, which have risen from about 5% of federal student loan volume in 1994-95 to about 25% for 2004-05, are excluded from the calculations for student aid, but are included in some of the results in the context of student borrowing and funding.
This report contains a number of findings and results, but the area where the results are distinguished by type of institution involves the federal aid programs. Not surprisingly, the federal aid program from which students in two-year public institutions receive a significant share of the dollars available nationwide is the Pell Grant program—32.4% of the dollars are provided to those students. This share has remained relatively constant over the ten-year period ending in 2004-05, as it decreased by less than one-half of one percent. For the other federal aid programs, such as Stafford loans and PLUS loans, the percentage share going to two-year institution students is much lower, ranging from a low of 1% to a high of 8.6%.
Where to Look
The full reports are available on the College Board’s web site, at http://accca.com/www.collegeboard.com/press/releases/150634.html
Governor Signs Controversial Capital Facilities Fees Bill
After three attempts, Assembly Member Jackie Goldberg found success with her bill to authorize municipal utilities to increase capital facilities fees on public educational agencies, including school districts and county offices of education. On September 30, 2006, the final day for gubernatorial action on bills, the Governor signed AB 2951. This follows Governor Davis’ veto of AB 1051 two years ago and failure of AB 3036 to move out of the Senate last year, both of which contained provisions similar to AB 2951.
The Goldberg measure, strongly opposed by the K-12 and higher education communities, authorizes publicly owned utilities to increase capital facilities fees imposed on public agencies and limits agencies’ opportunities to seek relief if they object to these fee hikes. The measure will likely increase utility costs to school districts, since municipal utilities will be free to increase fees to cover capital costs. A Department of General Services analysis of AB 3036 last year estimated its state costs at hundreds of millions annually.
This measure was sponsored by a coalition of municipal utilities to address legal challenges brought by public agencies, including the University of California. At issue was whether the utilities were unfairly charging public agencies for capital improvements and construction costs that did not directly benefit the public agencies. In essence, the public agencies were claiming that they were being overcharged. The court decisions have generally gone against the municipal utilities, and these entities in turn have sought clarification and relief through legislation. The enactment of AB 2951 provides that relief.
The effect of enactment of this bill is to transfer capital costs from public utilities to public education. This is another factor that will drive up the cost of operating school facilities. We continue to believe that this bill is unfair to schools. Those who will directly benefit from the capital costs incurred by the utilities—the developers, home owners, and businesses for whom the capital costs are being incurred—will in essence be taxed twice because schools will also be forced to absorb higher costs.
As a matter of policy, we think that forcing Proposition 98 to absorb costs not intended at its passage is bad public policy. As we have seen in other cases, nothing is forever in Sacramento. We look forward to a time when this issue might be revisited in a more “school-friendly” way.
September Revenues and Employment Tracking Forecast
The Department of Finance’s (DOF’s) report on revenue collections for the month of September revealed few surprises. For the month, total General Fund receipts came in essentially right on target: $10,304 million was forecast and $10,299 million was collected.
Within this total, the personal income tax showed strength, with revenues coming in $226 million above the forecast, a 4.5% gain. This increase was attributed to strong tax payments on capital gains income, partially offset by weakness in withholding on hourly and wage income.
Much of the gain in the personal income tax, however, was cancelled by a shortfall in the sales tax. Analysts speculate that the drop in oil and gasoline prices could be responsible for lower-than-expected sales tax receipts.
The DOF Finance Bulletin also provides an update on the state’s housing market, which has slowed considerably from it 2005 performance. Two key features of the housing market as of August 2006 are worth noting: (1) home construction and sales have slowed considerably, and (2) home prices have not fallen. The August data showed that home building was down 16% for the first eight months of 2006 compared to the same period in 2005, and home sales for the month of August were down 30% from August 2005. On a regional basis, the greatest slowdowns were recorded for Sacramento, Stockton, and San Diego.
In contrast to this slowdown, home prices have held steady, at least through August. The report notes that the median price of a single-family home was $576,000, an all-time record. This record falls just outside of the $540,000 to $570,000 band that homes have been trading within since June 2005. These developments in the state housing market—slowing sales but steady prices—continue to suggest that there will not be a bursting of the “housing bubble,” at least not of the order of magnitude that the state experienced in the early 1990s.
Finally, the Employment Development Department reports that the California’s employment picture continues to be positive. The state added 17,300 jobs in September, following a gain of 36,800 jobs in August. The job gains were broad based, with ten of 11 industrial sectors gaining; only trade, transportation, and utilities (this is a single category) posted a decline. The state’s unemployment rate dropped slightly to 4.8% in September from 4.9% one month earlier.
Interest Rates Unchanged: Implications for California
Members of the Federal Reserve met on October 25, 2006, and decided to leave short-term interest rates unchanged, citing expectations of a growing national economy following a slowdown during the first half of 2006. The Federal Reserve left the key short-term rate at 5.25% for the third meeting in a row, despite some concern that there is still a risk of higher inflation ahead. How will this affect California’s economy?
In an appearance on CNBC’s Street Signs on the same day, Brad Williams, chief economist for the Legislative Analyst’s Office (LAO), indicated that there were “conflicting forces” in play in California. California, like the nation, has seen a slowdown in its economy over the course of the year, and Williams said that he expected the fourth quarter to be slow as well. He warned that California was more vulnerable to a slowdown than other states should interest rates rise because of the rapid run up in home prices. In particular, he noted that homebuyers who opted for low-interest-rate, nontraditional loans would be at risk should their rates ratchet upward in step with higher interest. Over the last five years, home prices have appreciated 112% in San Diego County and 144% in Los Angeles County, compared to a U.S. average increase of 39%.
When asked about California’s upside potential, Williams cited the state’s strong advantage in high tech services. The state enjoys an international leadership role in research and development, pharmaceuticals, and computer and software design. Williams noted that this sector has seen payroll employment growth of about 5% annually since 2003, more than triple the rate for overall state employment, and the prospects for continued strength are high.
The LAO is expected to release its formal forecast of the state’s economy and budget in mid-November. This is a much-anticipated document among budget watchers and will set expectations for the Governor’s Budget in January.
How Many Confidential Employees are We Allowed to Have?
Question:
We have received requests from a couple of our classified employees to designate their positions as “confidential” because they handle confidential student information. We already have a number of confidential positions in the district. How many are we allowed to have?
Answer:
There are a couple of issues that your question raises. First, the definition of “confidential” when it pertains to a classified position has nothing to do with access to confidential information—except perhaps during collective bargaining, which is explained further below. Many positions throughout a school district are expected to keep confidential certain information pertaining to employees, students, pending lawsuits, or other elements encountered in the course of their duties. Keeping this information confidential is a matter of each individual’s job performance.
Second, there is no magic number of confidential positions that are allowed in a district, but, if your number is higher than for other districts of your size, that may be a red flag. More importantly, the criteria to determine whether or not a position should be confidential is specified in Government Code Section 3540.1, which defines a “confidential employee” as:
… any employee who is required to develop or present management positions with respect to employer-employee relations or whose duties normally require access to confidential information that is used to contribute significantly to the development of management positions.
In other words, the duties of the position must require this type of participation in the collective bargaining process. This definition is much more narrow than what was in place a few years ago, and therefore has resulted in fewer classified positions that qualify for the “confidential” designation. The signature of then-Governor Davis on SB 253 (Chapter 190/2003) changed the code to its current definition, and most notably the “contribute significantly” phrase, which is open to some interpretation.
In short, the employees in your district who have requested confidential status are requesting it based upon their handling of confidential student information; their positions would not qualify as “confidential” according to the code.
During the last week of the 2006 legislative session, a number of bills affecting the California Community Colleges were approved by both houses of the Legislature, enrolled, and sent to the Governor for his signature or veto. Of those, the following bills have been signed by the Governor and will become law: Read the rest of this entry »
The law office of Lozano Smith has issued a client news brief regarding a community college administrator’s statutory right to become a first-year probationary faculty member under Education Code Section 87458. Read the rest of this entry »
