BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1837 (Low) - Postsecondary education: Office of Higher Education Performance and Accountability ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 17, 2016 |Policy Vote: ED. 9 - 0, G.O. 13 | | | - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Jillian Kissee | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: This bill establishes the Office of Higher Education Performance and Accountability (Office), a successor agency to the former California Postsecondary Education Commission (CPEC), as the statewide postsecondary education coordination and planning agency. The purpose of the Office is to advise the Governor, Legislature, and other government officials and institutions of postsecondary education. Fiscal Impact: Costs in the low millions annually to maintain the Office once AB 1837 (Low) Page 1 of ? fully operational. (General Fund) Costs to Segments: All segments cite costs, totaling about $600,000, related to working with the Office and responding to data requests based on workload from the former CPEC. The California Community Colleges (CCC) Chancellor's Office estimates costs of about $443,000 across four positions; the California State University (CSU) estimates $110,000 for one position; and the (University of California) estimates the need for an additional half of a position, equating to about $50,000. (General Fund) Potential significant out year costs to the segments for their participation in an eligibility study. (General Fund) Background: The 1960 Master Plan for Higher Education in California, and through existing law, established the CPEC, a 17 member body, to be responsible for coordinating public, independent, and private postsecondary education in California and providing independent policy analysis and recommendations to the Legislature and the Governor on postsecondary education issues. The CPEC was tasked with providing fiscal and policy recommendations to the Governor and Legislature; monitoring and coordinating public institutions; and ensuring comprehensive planning for higher education and effective use of resources. In 2011, Governor Brown vetoed funding of about $2 million General Fund for the CPEC resulting in its closure. In the veto message, the Governor cited the commission's ineffectiveness but requested "that the state's three public higher education segments, along with other higher education stakeholders, explore alternative ways to more effectively improve coordination and development of higher education policy." Existing law also establishes the state's goals for higher education. The goals are to: (1) improve student access and success which includes, but is not limited to, greater participation by demographic groups, including low-income students, that have historically participated at lower rates, greater completion rates by all students, and improved outcomes for graduates; (2) better align degrees and credentials with the state's economic, workforce, and civic needs; and (3) ensure the effective and efficient use of resources in order to increase high-quality postsecondary educational outcomes and maintain affordability. AB 1837 (Low) Page 2 of ? Proposed Law: This bill establishes the Office, a successor agency to the former CPEC, as the statewide postsecondary education coordination and planning agency. This bill also requires the Legislative Analyst's Office (LAO) to report to the Legislature regarding the performance of the Office and its functions by January 1, 2020. Specifically this bill: Office makeup Establishes the Office within the Governor's Office. The Governor is required to appoint the Executive Director which is to be confirmed by a majority vote of the membership of the Senate. Establishes an advisory board to examine and make recommendations to the Office regarding its functions and review and comment on any recommendations made by the Office to the Governor and the Legislature. The advisory board consists of the Chairperson of the Senate Committee on Education and the Chairperson of the Assembly Committee on Higher Education and six public members with experience in postsecondary education appointed to four year terms by the Senate Committee on Rules and the Speaker of the Assembly. The advisory board is required to develop an annual report on the condition of higher education in California and an annual review of the performance of the executive director of the Office. The advisory board members do not receive compensation but do receive reimbursement for actual and necessary expenses for its functions. Office functions AB 1837 (Low) Page 3 of ? Requires the Office to: o Biennially evaluate statewide and institutional performance related to the state's goals for higher education and take into consideration certain metrics. o Make recommendations on cross-segmental initiatives in areas such as efficiencies in instructional delivery, financial aid, transfer, and workforce coordination. o Advise on the need and location of new institutions and campuses of higher education, proposals by the public segments for new programs, the priorities that guide the public segments and the degree of coordination between segments. o Make recommendations on proposals for changes in eligibility pools for admission to postsecondary education segments. The Office must periodically conduct a study (often referred to as an eligibility study) of the percentages of California public high school graduates estimated to be eligible for admission to the UC and CSU. o Maintain programmatic, policy, and fiscal expertise to receive and aggregate information reported by the institutions of higher education. o Develop and maintain a database, with specified functions, to serve as a clearinghouse for postsecondary education information. o Furnish information from the segments upon request of the Governor and the Legislature. AB 1837 (Low) Page 4 of ? o Annually report to the Governor and Legislature regarding the progress in achieving the state goals for higher education. Related Legislation: Several bills have been pursued in the past that relate to the functions of the former CPEC. The most recent, SB 42 (Liu, 2015), almost identical to this bill, was vetoed by the Governor whose message said in part: "While there is much work to be done to improve higher education, I am not convinced we need a new office and an advisory board, especially of the kind this bill proposes, to get the job done." Staff Comments: Based on the size of the CPEC's last budget, costs to reinstitute a similar entity such as the one proposed in this bill would be about $2 million General Fund and 19 positions. However, in previous years the CPEC was funded with $3.7 million General Fund. Depending upon the frequency and the nature of data being requested, this could drive significant workload to the segments to compile and submit the information to the Office. This bill authorizes the Office to require the governing boards and higher education institutions to submit data on plans and programs, costs, selection and retention of students, enrollments, plant capacities, and other matters related to effective planning, policy development, and articulation and coordination. It also requires the Office to furnish information concerning these matters to the Governor and the Legislature upon request. Any data reporting requirements the Office imposes, with statutory authority to do so, on the CCCs will likely be deemed by the Commission on State Mandates to be a reimbursable state mandate. Staff notes that currently the segments respond directly to the Administration and Legislature on data requests that cover many of the topics included in this bill. This bill also includes a reporting requirement for the LAO AB 1837 (Low) Page 5 of ? regarding the performance of the Office and its functions by January 1, 2020. This date falls before the LAO's annual budget analysis publication. It may make more sense to require this report at a later date so that it can be included in the budget analysis. The LAO estimates general costs of about $150,000 to complete a program evaluation. The requirement in this bill would likely not result in additional costs to the state, but would result in less time available to respond to other requests or complete other reports requested by the Governor and Legislature. -- END --