Higher Ed | Daily Report

Raise community college fees by $14 per unit. Decrease proposed funding to the universities by $300 million. Protect Cal Grants. Those were the three main recommendations from the Legislative Analyst's Office today on Gov. Arnold Schwarzenegger's state budget.

The governor's budget proposal includes $10.9 billion in General Fund support for higher education in 2010-11, about 12 percent more than the estimated funding level for the current year, according to the LAO report.

The analysts suggest that the budget needs a little more balance. For the community colleges, they recommended a fee increase, from $26 per unit to $40. Most students would be spared from feeling the fee hike because they'd be covered by state fee waivers, federal aid and tax breaks:

We estimate that about 90 percent of CCC students would qualify for either a fee waiver or a full or partial tax offset to their fees. Roughly three-quarters of these students would effectively pay no fees at all.

Here is Steve Boilard, higher education director with the Legislative Analyst's Office, talking about the key recommendations:

Such a fee increase would keep the California Community Colleges fees the lowest in the nation while also generating an additional $150 million in additional revenues for the system.

And the courses would still be cheaper than those offered through the newly announced partnership between the community colleges and the for-profit Kaplan University.

The extra funding would help the system bounce back from cuts in revenue. From 2008 to 2010, community colleges' Proposition 98 funding declined by $438 million, or 7.2 percent. But they also got additional revenues from federal funding and increased fees, meaning their funding actually declined by $295 million, or 4.5 percent.

For the UC system, the analysts endorsed the 15 percent increase in student fees slated for 2010-11, "given the extraordinary pressure on the state budget."

While the Governor's budget proposed adding $423 million to the UC system's budget in part for enrollment growth, the Legislative Analyst's Office took a different approach. They say that adding enrollment funding doesn't make sense, since the UCs don't plan to increase enrollment.

What's more important, they say in the report, is the per-student funding, which declined significantly in 2008-09 and again in 2009-10. This caused the universities to reduce part-time faculty, increase class sizes, implement furloughs and reduce course offerings.

The report says the Legislature should go back to the per-student funding rate that the state provided in 2007-08. That would increase the universities' budgets from their current level, but would still be $298 million less expensive than the Governor's budget.

Finally, the Governor's budget proposes to suspend new competitive Cal Grants starting in 2010-11. The LAO recommends that the Legislature reject this proposal, calling Cal Grants the "linchpin" of the state's financial aid strategy.