Assembly Bill 75 – 2022 School Bond
AB 75 (O’Donnell) is the 2022 school bond vehicle, which will have its first hearing in the Assembly Education Committee on April 7th. The community college components will be discussed by the Assembly Higher Education Committee in late April.
AB 75 does not specify a dollar amount for the bond as of yet. The amount will be subject to policy decisions, such as which programs to fund and what education segments to include. Policymakers and stakeholders are discussing the appropriate path forward for UC and CSU.
CCFC continues to work with policymakers and stakeholders on the development of the community college language, and we will follow up with additional information regarding the conversation in Assembly Higher Education Committee.
Senate Bill 22 – 2022 Higher Education Bond
SB 22 (Glazer) is the 2022 higher education bond vehicle, which passed its first hearing in the Senate Education Committee in March. CCFC communicated support in moving the conversation forward while seeking changes in the bill that would increase local bonding capacity while addressing concerns which hindered Proposition 13, the 2020 state school bond that was rejected by voters. CCFC has expressed concern that language in SB 22 creates unnecessary risk and is working with the bill’s author to create a positive path forward.
Federal $1.9 Trillion COVID Legislative Package Passed
Congress recently passed the $1.9 trillion COVID reconciliation bill, known as the American Rescue Plan. The bill provides additional COVID-19 aid for K-12 schools, higher education, states, municipalities and counties. Known as H.R. 1319, the package provides a Higher Education Emergency Relief Fund, appropriating close to $40 billion through 2023 for institutions of higher education, with 91% of these funds allocated to identified institutions of higher education. Half of these funds must be used for emergency financial aid grants to students to assist with college costs and basic needs. The second half of the funds are to contribute towards making up lost revenue and address increased costs stemming from declining enrollment, the transition to online learning, the closure of revenue-producing services and facilities, as well as COVID-19 testing, vaccination, PPE, and classroom retrofits. Initial reports are indicating that community colleges may be receiving approximately $2.2 billion overall from this stimulus package.
Stimulus funding is provided for state and local governments, including investments in water, sewer, and broadband infrastructure. Initial estimates suggest California may receive approximately $26.07 billion, while cities and counties would likely collectively receive close to $16 billion. We expect that the state will indicate how it will spend its funds when the May Revision is released.
California legislators have begun to speculate on how to use these federal dollars, which range from using funds to provide for one-time infrastructure projects, expand broadband access, supplement existing safe drinking water, wildfire prevention, and environmental protection in low-income communities.
Federal discussions are already underway on a new $3 trillion infrastructure stimulus package focused on infrastructure and domestic needs. This package may include the development of roads, hospitals, bridges, rail lines, electrical vehicle charging stations, the cellular network and green energy systems as well as education. Free community college, universal pre-kindergarten and paid family leave are a number of items that are also being considered.
State Revenues Soar
California recently discovered it has collected $14.3 billion more in taxes than expected in January, providing a very positive opportunity for relief and investments in a number of areas across the state. Since Proposition 98 currently receives 40% of General Fund revenues, it is anticipated that community colleges will see positive fiscal support in a number of areas, which will be revealed with the release of the Governor’s May Revision.
Legislature Reviews Governor’s Budget Proposal
The Legislature completed its first round of budget hearings reviewing the Governor’s January budget, as well as their response to its proposals. Both the Senate and Assembly Budget Subcommittee are concerned with the lower COLA recommended for community colleges than their K-12 counterparts, as well as a lack of elimination of the existing deferrals. It is estimated that the impact of the pandemic and closed campuses has caused community colleges to lose approximately $350 million through 2020-21, with estimated reductions of $58 million due to enrollment declines or fee refunds for cancelled classes. The Legislature will begin the next round of budget hearings after the Governor’s May Revision is released. The new hearings will likely include discussions of how increased revenue findings and the additional federal stimulus dollars will impact community colleges.
The Governor’s January budget included $355.8 million for the construction phase of 17 projects that are expected to complete design by the spring of 2022, reflecting the next installment of $2 billion available to community colleges from Proposition 51 funds. Legislators considered the proposed projects, noting that 16 of them are ready for the construction phase and have been approved for earlier phases. Additionally, the budget proposes an additional $2.2 million for the creation of a new capital outlay project.
During budget subcommittee discussions, the Legislature discussed a number of major workforce development programs, including: The Strong Workforce Program, Apprenticeships, and the Economic and Workforce Development Program. Legislators considered how work-based learning seeks to combine both classroom instruction and work-like experiences. While the Governor’s January budget proposed to double the ongoing funding for the California Apprenticeship Initiative to $30 million, it also proposed one time funding of $20 million to expand work-based learning models and programs at community colleges. Recent increases in state revenue could expand the level of financial support and scope of existing workforce development programs, which will be discussed in the next round of budget discussions after the May Revision is released.
Governor Newsom Signs Economic Stimulus Package
On February 23rd, Governor Newsom signed a $7.6 billion economic stimulus package which includes child care assistance, the expansion of tax credits for businesses, an expansion of the Earned Income Tax Credit, financial aid for community college students, CalFresh support for community college students, as well as other measures. The expansion of tax credits will have an economic impact on Proposition 98 funding, as 40% of the cost of tax credits are diverted from Proposition 98.
CCFC Legislative Advocate