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Legislative Analyst's OfficeAnalysis of the 2002-03 Budget Bill |
The California Community Colleges (CCC) provides instruction to about 1.6 million adults at 108 colleges operated by 72 locally governed districts throughout the state. The system offers academic and occupational programs at the lower-division (freshman and sophomore) level. Based on agreements with local school districts, some college districts offer a variety of adult education programs—including basic skills education; citizenship instruction; and vocational, avocational, and recreational programs. Finally, pursuant to state law, many colleges have established programs intended to further regional economic development.
Figure 1 shows the budget from all significant sources for community college education for the budget year and the two previous years. As the figure shows, CCC spending from all sources is projected to increase by $104.2 million, or 1.7 percent, above the revised current-year level.
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Figure 1 Community College Budget Summary |
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(Dollars in Millions) |
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Actual |
Estimated 2001-02 |
Proposed 2002-03 |
Change |
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Amount |
Percent |
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Community College Proposition 98a |
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General Fund |
$2,640.9 |
$2,806.1 |
$2,727.8 |
-$78.4 |
-2.8% |
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Local Property Tax |
1,711.5 |
1,855.3 |
2,001.9 |
146.6 |
7.9 |
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Subtotals, Proposition 98 |
($4,352.3) |
($4,661.5) |
($4,729.7) |
($68.2) |
(1.5%) |
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Other Funds |
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General Fund |
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State operations |
$12.4 |
$13.3 |
$11.6 |
-$1.7 |
-12.8% |
|
Teachers' retirement |
68.6 |
66.3 |
70.9 |
4.6 |
7.0 |
|
Bond payments |
81.7 |
93.0 |
108.5 |
15.6 |
16.7 |
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Other state funds |
12.4 |
11.9 |
9.1 |
-2.8 |
-23.6 |
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State lottery funds |
121.0 |
138.1 |
138.1 |
— |
— |
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Student fees |
154.7 |
162.4 |
167.3 |
4.9 |
3.0 |
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Federal funds |
201.7 |
216.2 |
219.4 |
3.2 |
1.5 |
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Other local |
775.3 |
831.0 |
843.3 |
12.2 |
1.5 |
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Subtotals, Other funds |
($1,427.6) |
($1,532.3) |
($1,568.2) |
($36.0) |
(2.3%) |
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Grand Totals |
$5,780.0 |
$6,193.8 |
$6,297.9 |
$104.2 |
1.7% |
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Students |
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Enrollment |
1,565,087 |
1,683,933 |
1,734,451 |
50,518 |
3.0% |
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Full-time equivalent (FTE) |
1,031,206 |
1,062,142 |
1,094,006 |
31,864 |
3.0 |
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Amount Per FTE Student |
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Proposition 98 |
$4,221 |
$4,389 |
$4,323 |
-$65 |
-1.5% |
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All funds |
5,605 |
5,831 |
5,757 |
-75 |
-1.3 |
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a Expenditures, including Reversion Account funds. |
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Reversion Account Funding Is Significant. The Proposition 98 amounts shown in Figure 1 are the amounts expended in each fiscal year. These amounts include both new appropriations as well as reappropriations from the Reversion Account in each fiscal year. (The Reversion Account contains unexpended Proposition 98 appropriations from prior fiscal years, and can be used to fund Proposition 98-eligible activities only.) A relatively large amount of Reversion Account funding is provided in the current year and budget year. Figure 2 shows these amounts, and reconciles the Proposition 98 appropriations with the expenditure of these funds. It also shows actual and anticipated savings due to increased property tax receipts.
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Figure 2 Community College Proposition 98 Reconciliation |
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(Dollars in Millions) |
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|
Actual 2000-01 |
Estimated 2001-02 |
Proposed 2002-03 |
Change |
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Amount |
Percent |
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Proposition 98 |
$4,391.8 |
$4,547.9 |
$4,683.9 |
$136.0 |
3.0% |
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Anticipated savings |
-39.4 |
-24.8 |
— |
24.8 |
N/A |
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Proposition 98 |
— |
138.3 |
45.8 |
-92.5 |
-66.9 |
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Total Proposition 98 |
$4,352.3 |
$4,661.5 |
$4,729.7 |
$68.2 |
1.5% |
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The CCC's Share of Proposition 98. The Governor's budget includes $4.7 billion in Proposition 98 funding for the community colleges for 2001-02. This is about 75 percent of overall community college funding.
Total Proposition 98 funding (approximately $46 billion in the budget year) is split among K-12 education, CCC, and several other state agencies (such as the Departments of Mental Health and Developmental Services). As proposed by the Governor, CCC would receive 10.2 percent
of total Proposition 98 funding, K-12 education would receive 89.6 percent, and the other state agencies would receive the remaining 0.2 percent. This split is unchanged from the revised current-year estimate.
Figure 3 shows the changes proposed for community college Proposition 98 appropriations (not expenditures) in the budget year. Key changes include:
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Figure 3 Governor's Community College Budget Proposals Proposition 98a |
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(In Millions) |
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2001-02 (revised) |
$4,547.9 |
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Enrollment growth—3 percent |
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Apportionments |
$114.3 |
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Selected categorical programs |
5.9 |
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Subtotal |
($120.2) |
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Cost-of-living—2.15 percent |
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Apportionments |
$84.4 |
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Selected categorical programs |
4.4 |
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Subtotal |
($88.8) |
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Proposed new spending |
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Replace Reversion Account money in current year
with new Proposition 98 funds for |
$91.2 |
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Scheduled maintenance and repairs |
9.1 |
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Instructional equipment and library materials |
11.1 |
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Subtotal |
($111.4) |
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Proposed reductions |
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CalWORKs |
-$50.0 |
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Matriculation |
-26.8 |
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Telecommunications and technology |
-19.8 |
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Fund for Student Success |
-10.0 |
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Economic development program |
-9.9 |
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Faculty and staff development program |
-5.2 |
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Subtotal |
(-$121.7) |
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Adjustments |
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Lease purchase costs |
-$24.8 |
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Other (including current-year savings) |
-37.9 |
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Subtotal |
(-$62.7) |
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2002-03 (proposed) |
$4,683.9 |
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Change from 2001-02 (revised) |
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Amount |
$136.0 |
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Percent |
3.0% |
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a 2002-03 appropriations only; excludes Proposition 98 Reversion Account funding. |
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Figure 4 shows Proposition 98 expenditures (including Reversion Account spending) for community college programs. "Apportionment" funding (available for the districts to spend on general purposes) accounts for $3.8 billion in 2002-03, or about 81 percent of total Proposition 98 expenditures. The state General Fund supports about 48 percent of apportionment expenditures, and local property taxes provide the remaining 52 percent.
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Figure 4 Major Community College Programs |
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(In Millions) |
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Estimated |
Proposed |
Change |
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Apportionments |
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State General Fund |
$1,810.0 |
$1,838.3 |
$28.2 |
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Local property tax revenue |
1,855.3 |
2,001.9 |
146.6 |
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Subtotals |
($3,665.4) |
($3,840.2) |
($174.8) |
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Categorical Programs |
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Partnership for Excellence |
$300.0 |
$300.0 |
— |
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Extended opportunity and services |
79.7 |
83.8 |
$4.2 |
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Disabled students |
79.6 |
83.7 |
4.1 |
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Matriculation—credit/noncredit |
76.3 |
49.5 |
-26.8 |
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Lease-payment bonds |
61.9 |
37.1 |
-24.8 |
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Services for CalWORKs recipients |
65.0 |
15.0 |
-50.0 |
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Part-time faculty compensation |
57.0 |
57.0 |
— |
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Part-time faculty office hours |
10.3 |
7.2 |
-3.2 |
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Part-time faculty health insurance |
1.0 |
1.0 |
— |
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Maintenance/special repairs |
17.0 |
49.0 |
32.0 |
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Instructional equipment/library |
15.0 |
49.0 |
34.0 |
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Economic development program |
50.2b |
40.3 |
-9.9 |
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Telecommunications and technology |
44.3 |
24.5 |
-19.8 |
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Basic skills |
26.5 |
27.9 |
1.4 |
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Apprenticeships |
12.7 |
12.7 |
— |
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Cooperative Agencies Resources for |
11.8 |
12.4 |
0.6 |
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Financial aid administration/outreach |
7.1 |
7.8 |
0.6 |
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Teacher and reading development |
5.0 |
5.0 |
— |
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Greater Avenues for Independence |
8.0 |
— |
-8.0 |
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Faculty and staff development |
5.2 |
— |
-5.2 |
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Fund for student success |
16.2 |
6.2 |
-10.0 |
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Energy |
49.0 |
— |
-49.0 |
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Mandates |
1.7 |
1.7 |
— |
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Other programs |
20.4 |
18.7 |
-1.7 |
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Subtotals |
($1,020.9) |
($889.5) |
(-$131.4) |
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Anticipated savings |
-$24.8 |
— |
$24.8 |
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Totals |
$4,660.9 |
$4,729.7 |
$68.2 |
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a Includes Proposition 98 Reversion Account funding. |
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b Includes $5 million for nursing program expansion per Chapter 514, Statutes of 2001 (AB 87, Jackson). |
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"Categorical" programs (expenditures earmarked for a specified purpose) are also shown in Figure 4. These programs support a wide range of activities—from services for disabled students to maintenance and special repairs. We discuss the Governor's proposed reductions in some categorical programs, as well as ways that categorical programs could be restructured, in the following section.
Now in its fourth year, the Partnership for Excellence (PFE) program provides supplementary funding to community colleges in exchange for their commitment to improve student outcomes in specified areas. We find that improvement, to date, has been marginal and that the accountability intended by the Legislature has been elusive. We recommend that the Legislature either end the PFE experiment or consider modifications to address existing problems with the program.
The Legislature and the Governor established the PFE program in 1998 through Chapter 330 (SB 1564, Schiff). In general, the PFE provides additional funding (currently $300 million per year) to community colleges in exchange for their commitment to improve their performance in specified areas.
Chapter 330 required CCC to develop between five and ten specific goals related to student success, as well as related outcome measures to assess district performance. The act states that the goals must include at least the following areas: (1) student transfers, (2) degrees and certificates, (3) successful course completion, (4) workforce development, and (5) basic skills. The act expresses the state's commitment to provide supplemental funding (above funding for enrollment growth and COLAs) "to invest in program enhancements that will increase performance toward the community colleges' system outcome measures."
As conceived, the PFE's success depends on (1) the establishment of appropriate goals and outcome measures, (2) the accurate measurement of progress toward achieving those goals, and (3) the linking of funding to performance. We summarize activities in these areas below.
Setting of Goals and Outcome Measures. In the fall of 1998, CCC adopted preliminary goals and accountability measures for the five mandatory categories specified in Chapter 330. (The CCC chose not to adopt any additional categories at that time.) These goals are to be achieved by 2005-06 (although the PFE statute is to sunset on January 1, 2005.) In accordance with Chapter 330, the Department of Finance (DOF), the California Postsecondary Education Commission (CPEC), and the Legislative Analyst's Office (LAO) reviewed and recommended modifications to CCC's proposed goals and accountability measures. Specifically, the three agencies recommended changing the base year of performance data, adding the goal of transfer-preparedness (and not merely actual transfers), and including separate subgoals within certain categories.
In September 1999, in accordance with language in the 1999-00 Budget Act, CCC reported (1) its response to the three agencies' concerns, (2) performance targets and baseline data, and (3) a plan for annual district-specific accountability reports beginning in April 2000. The report was reviewed jointly by the three agencies.
Although the report addressed some of the agencies' earlier concerns (including the addition of a "transfer-prepared" goal), the agencies' written response to the report expressed "serious concerns" with CCC's modified goals and assumptions. Most significantly, the three agencies disagreed with CCC's contentions that (1) "full funding" of the PFE requires annual augmentations of $100 million (reaching a $700 million annual appropriation in 2004-05), and (2) any lower level of funding would justify a commensurate reduction in their numerical targets. The three agencies also expressed concern that the plan did not ensure accountability, that its proposed outcomes did not reflect an adequate return on state investments, and that it did not provide annual benchmarks.
In 2000, CCC and the three agencies made several efforts to reconcile these issues, but no formal resolution was reached. The CCC's annual reports on the PFE in 2000 and 2001 were based on essentially the goals and measures outlined in CCC's September 1999 report (with minor modifications). Figure 5 summarizes these goals and outcome measures.
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Figure 5 PFE Goals and Outcomes |
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Transfer |
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CCC definition: Number of students who transfer from community colleges to baccalaureate institutions. |
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2005 Targeta: 5,500 to 9,000 additional transfers. |
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Subgoals: Transfers to UC, CSU, and independent/out-of-state institutions. |
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Transfer-Prepared |
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CCC definition: Net number of students in the system who earned 56 transferable units with a minimum GPA of 2.00. |
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2005 Target: 4,900 additional transfer-prepared students. |
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Degrees and Certificates |
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CCC definition: Number of degrees and certificates awarded. Currently, only degrees and certificates of at least 18 units are counted. |
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2005 Target:3,231 additional degrees and 1,423 additional certificates. |
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Successful Course Completion |
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CCC definition: Overall rate of successful course completions. “Successful completion” requires a course grade of A, B, C, or “credit.” |
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2005 Target:3.6 percent greater course completion rate. |
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Subgoals: Transferable courses, vocational courses, basic skills courses. |
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Work Force Development |
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CCC definition: Successful completion of vocational courses, and provision of contract education to California businesses. “Successful completion” requires grade of A, B, C, or credit. |
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2005 Target:43,560 additional course completions, 121 to 184 additional businesses benefiting, and 760 to 1,127 employees benefiting. |
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Subgoals: · Course completion: apprenticeship courses, advanced-level vocational courses, introductory vocational courses. · Contract education: California businesses and employees benefiting from contract training. |
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Basic Skills Improvement |
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CCC definition: Number of students successfully completing coursework at least one level above their prior basic skills enrollment in the same subgroup (writing, reading, etc.). “Successful completion” requires grade of A, B, C, or credit for credit courses, and 75 percent attendance for noncredit courses. |
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2002 Target:8,533 additional students. |
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a Target figures reflect additional performance beyond that accounted for by enrollment growth and use various base years from 1995-96 to 1997-98. |
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Measurement and Reporting of Outcomes. Pursuant to Chapter 330, community college districts report campus-level performance data to the CCC Chancellor's office, which in turn provides annual reports to the Governor and Legislature. To date, CCC has provided district and college baseline data in a May 1999 report, reports on district and system performance data in July 2000 and April 2001, and reports on local investments of PFE funding in July 2000 and April 2001.
The system and district performance reports present statewide and college-specific data for each of the PFE categories. The reports on local investments show how each college has allocated its PFE funding among the goal areas, and the number of employees (by category) hired with PFE funds. Overall, as shown in Figure 6, the system as a whole was actually losing ground in two goal categories as of the latest report (in April 2001).
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Figure 6 Partnership For Excellence Goals and Performance |
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Goal |
Base |
Actual |
Target |
Progress
Toward |
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1998-99 |
1999-00 |
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Transfer |
55,149 |
55,149 |
58,532 |
78,582 |
14.4% |
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Transfer-prepared |
106,951 |
107,980 |
96,501 |
135,935 |
-36.1%b |
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Degrees and Certificates |
84,179 |
88,978 |
89,598 |
116,054 |
17.0% |
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Successful Course |
68.1% |
68.4% |
67.9% |
70.6% |
-9.2%b |
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Workforce Development |
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Vocational courses |
1,078,741 |
1,146,430 |
1,181,454 |
1,463,665 |
26.7% |
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Businesses benefiting |
1,263 |
—c |
—c |
1,700 |
— |
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Employees benefiting |
73,801 |
—c |
—c |
99,600 |
— |
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Individuals receiving |
140,505 |
—c |
—c |
189,700 |
— |
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Basic Skills Improvement |
108,566 |
115,630 |
120,970 |
150,754 |
29.4% |
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a Percent of difference between base and target figures that had been achieved by end of 1999-00. |
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