12-20-02 AB 64--Another Attempt to Change the Growth Formula

Volume 15 For Publication Date: December 20, 2002 No. 25

AB 64—Another Attempt to Change the Growth Formula

Last week, AB 64 (Pacheco, R-Walnut) was introduced, which would modify the calculation of the statewide growth formula. Currently, it is “at a minimum, the rate of change of the adult population as determined by the Department of Finance, and may be increased through the budget process to reflect such other factors as statewide priorities, the unemployment rate, and the number of students graduating from California high schools” as specified in Education Code Section 84750(g).

AB 64 would remove this language and replace it with “determined by the board of governors, and may be based upon, but is not limited to, higher education enrollment projections published by the Demographics Unit of the Department of Finance and the California Postsecondary Education Commission.” In other words, AB 64 builds more flexibility into the calculation, provides more control over the calculation by the community college system, and would most likely result in higher growth numbers.

You may recall that there was similar legislation introduced in the last legislative session, SB 737 (Alarcon, D-Sylmar). This contained similar language as in AB 64, but specified additional factors which could be considered, such as the demand for distance education and unfunded full-time equivalent students (FTES) for districts with three or more years of unfunded FTES. SB 737 made it all the way to the Governor’s desk, but was vetoed. Here is an excerpt from the Governor’s veto message:

“I am a strong supporter of increased access to higher education for all Californians, and I am proud of the fact that the community colleges have received growth in excess of demographic projections during every year I have been in office. However, starting with the 2003-04 fiscal year, this bill could impose an annual Proposition 98 General Fund cost pressure of up to $120 million to fund higher levels of enrollment growth.”

In his veto message, the Governor also directed that the Secretary for Education, the Director of the Department of Finance, and the Executive Director of the California Postsecondary Education Commission work with the board of governors to address this. Perhaps the results of this task force may appear in the language of AB 64 as it moves through the legislative process.

Unfortunately, this type of a proposal can cost too much—especially at a time when we’re faced with significant reductions in state budgets and funding to local agencies—to make it all the way through the process. Don’t hold out too much hope for AB 64 in the current environment.

—Sheila G. Bua