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State Spending in 2016-17 Budget

Chapter 1

Key Features of the

2016-17 Budget Package

Chapter 2

Spending by Program Area

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October 5, 2016

The 2016-17 Budget

California Spending Plan

Higher Education

$15.6 Billion in General Fund Support for Higher Education. As shown in Figure 16, this is a $777 million (5 percent) increase from 2015–16. The University of California (UC) increases $282 million (9 percent), Hastings College of the Law (Hastings) increases $3 million (27 percent), and CSU increases $275 million (8 percent). Financial aid programs administered by the California Student Aid Commission (CSAC) increase $111 million (6 percent). Below, we provide detail on these four areas of the higher education budget. We also describe three crosscutting higher education actions and summarize spending changes for the California State Library.

Figure 16

Higher Education General Fund Support by Segmenta

(Dollars in Millions)

	2014–15 Actual	2015–16 Revised	2016–17 Enacted	Change From 2015–16
	2014–15 Actual	2015–16 Revised	2016–17 Enacted	Amount	Percent
California Community Colleges	$5,389	$5,853	$6,029	$176	3%
California State University	3,018	3,297	3,572	275	8
University of California	2,991	3,259	3,541	282	9
California Student Aid Commissionb	1,922	1,998	2,110	111	6
California Institute for Regenerative Medicine	275	369	274	–95	–26
Awards for Innovation in Higher Education	50	—	25	25	N/A
Hastings College of the Law	11	12	15	3	27
Totals	$13,655	$14,789	$15,566	$777	5%
aIncludes state General Fund support for pensions (for community colleges and CSU), retiree health care (for CSU), debt service (for community colleges and Hastings), and deferred maintenance (for CSU, UC, and Hastings) that comes from outside the segments’ main budget act appropriations. bIncludes Temporary Assistance for Needy Families and Student Loan Authority Fund support that directly offsets General Fund costs.

University of California

Total UC Spending of $28.7 Billion. Of total UC spending, about one–quarter is covered by state General Fund ($3.5 billion) and student tuition revenue ($3.2 billion) combined. About 30 percent is covered by revenue generated from UC’s five medical centers; 20 percent from self–supporting activities (such as housing, dining, parking, and academic extension fee revenue); 14 percent from federal, special, and local funds for research and student financial aid; and the remainder from various other sources, including investment income, patent revenue, federal indirect cost recovery, and philanthropy.

Spending for UC’s Core Education Program Increases $584 Million (9.3 Percent). Of this amount, $282 million is covered by state General Fund, $158 million from student tuition revenue, and $145 million from various other sources (see Figure 17). Of the new 2016–17 spending, $378 million is unrestricted and may be used at UC’s discretion, with the remaining $206 million restricted for specific purposes. Of state General Fund increases, $125 million is unrestricted (reflecting a 4 percent base increase) and the remainder is restricted.

Figure 17

University of California Core Education Budget

(In Millions)

Revenuea	Amount
2015–16 Revised
General Fund	$3,259
Tuition and fees	3,028
Total	$6,287
2016–17 Changes
General Fund	$282
Tuition and feesb	158
Otherc	145
Total	$584
2016–17 Enacted
General Fund	$3,541
Tuition and fees	3,186
Total	$6,726
Changes in Spending	Amount
UC’s Plan for Unrestricted Funds
General salary increases (3 percent)	$152
Academic quality initiativesd	50
Faculty merit salary increases	32
Operating expenses and equipment cost increases	30
Health benefit cost increases (5 percent)	27
Maintenance	25
Pension benefit cost increases	24
Debt service for capital improvements	15
Nonresident enrollment growth (3.2 percent)e	14
Dream Loan Program	5
Retiree health benefit cost increases	4
Subtotal	($378)
Restricted State General Fund
Proposition 2 payment for UC Retirement Plan (one time)	$171
Resident undergraduate enrollment growth in 2016–17 (3.4 percent)	50
Deferred maintenance (one time)	35
One–time research and public service initiatives	29
One–time student support and outreach initiatives	25
Resident enrollment growth in 2017–18 (1.1 percent)	19
Equal employment opportunity best practices	2
Remove one–time, prior–year funds	–124
Subtotal	($206)
Total	$584
aIncludes all state General Fund. Reflects tuition after discounts. In 2016–17, UC is projected to provide $1.1 billion in tuition discounts. bReflects increases in nonresident supplemental tuition (8 percent), the Student Services Fee (5 percent), and increased enrollment, offset by increases in discounts. cReflects: (1) General Fund for enrollment growth UC intends to carry forward, (2) savings from administrative efficiencies, (3) increased revenue from investments, and (4) philanthropy. dFor purposes such as increasing instructional support, reducing student–to–faculty ratios, recruiting faculty, increasing faculty salaries, and providing stipends to graduate students. UC indicates it will allow campuses to determine how to spend the funds. eFunded from nonresident supplemental tuition.

UC’s Plan for Unrestricted Funding Mostly for Compensation Increases. More than 60 percent ($239 million) of UC’s spending plan is for employee compensation, including salary increases, health benefit cost increases for active employees, and cost increases for pension and retiree health benefits. Remaining ongoing augmentations planned by UC include support for academic quality initiatives, which include faculty recruitment, faculty salary increases, and increases to graduate student stipends; an increase in nonresident enrollment; and facility maintenance.

Resident Enrollment Expectations and Funding. The 2015–16 budget established a goal for UC to enroll 5,000 more resident undergraduate students in 2016–17 compared to 2014–15 levels. The budget authorized DOF to augment UC’s budget by $25 million (ongoing) in 2015–16 if UC could demonstrate by May 1, 2016 that it would achieve this enrollment goal. On May 1, DOF determined that UC provided sufficient evidence the goal had been met and released the associated funding. The 2016–17 budget continues this practice for enrollment budgeting. Specifically, it sets an expectation that UC enroll 2,500 more resident students in 2017–18 as compared to 2016–17. Similar to the structure of last year’s budget, DOF is authorized to release $18.5 million to UC if it can demonstrate by May 1, 2017 that it will meet this enrollment goal. Budget language also calls on UC to adopt a policy that sets a limit on nonresident undergraduate enrollment. In addition to these actions, legislation enacted during the Second Extraordinary Session provided $1.9 million to serve 48 additional FTE students in a medical education program jointly operated by the Davis, Merced, and San Francisco campuses.

Largest One–Time Augmentation Is for UC’s Unfunded Pension Liability. The 2016–17 budget provides $171 million for UC’s Retirement Plan and scores it as a one–time Proposition 2 debt payment. This is the second of such payments. The 2015–16 budget provided UC $96 million for the same purpose. The 2015–16 budget made that appropriation contingent upon UC adopting a pensionable salary limit for new employees consistent with the limit specified under the Public Employees’ Pension Reform Act of 2013 (PEPRA)—$117,020 in 2016. By comparison, UC’s existing retirement plan had a limit of $265,000—the maximum allowed by the federal Internal Revenue Service. In March 2016, UC adopted the PEPRA limit for new employees, along with plans to redirect associated savings to new defined contribution plans and accelerated pay down of UC’s unfunded liability. Upon its determination that UC’s adopted plan met statutory requirements, DOF released the first payment of $96 million to UC in May 2016.

Three One–Time Augmentations for Student Support and Outreach. First, the budget provides UC $20 million for outreach and student services for low–income students, underrepresented minorities, and students from schools with 75 percent or more low–income, English learner, and foster students. For that last category of students, trailer legislation requires UC to develop a plan and time line to increase the number of admits, expand support services, and evaluate the costs and benefits of providing application fee waivers. Second, the budget provides $4 million to develop at least 45 online college preparatory and advanced placement courses through UC’s Scout program. Trailer legislation requires UC to report on the courses it plans to develop by January 1, 2017 and then develop those courses by January 1, 2018. Third, the budget provides $500,000 (for expenditure over five years) for the Underground Scholars Initiative, a group at UC Berkeley providing support services for formerly incarcerated students enrolled at that campus.

One–Time Funding for Research and Public Service. The budget provides one–time augmentations to various UC initiatives that advance the university’s research and public service missions. Specifically, the budget package provides augmentations for expanding entrepreneurship and innovation activities; conducting precision medicine, firearm violence, and transportation research; and providing aid to stranded or entangled marine mammals. Figure 18 provides further information on each of these augmentations.

Figure 18

One–Time Funding for UC Research and Public Servicea

(In Millions)

Initiative	Description	Funding
Innovation and entrepreneurship activities	Funding is pursuant to pending legislation which calls for each UC campus and the Lawrence Berkeley National Laboratory to expand programs and support services for entrepreneurs. The legislation requires UC to submit an annual report to the Legislature and the Department of Finance on these activities.	$22.0
Precision medicine research	Trailer legislation specifies funding is for supporting demonstration projects in both Northern and Southern California, to be selected by a committee of experts, and developing a public database of precision medicine assets (such as projects, data sets, and experts). The legislation requires an annual report, beginning January 1, 2017, updating the Legislature on the selected demonstration projects and a final evaluation once the projects are completed.	10.0
Firearm violence research	Funding is to establish a Firearm Violence Research Center. Funding is available for expenditure over five years. Trailer legislation specifies that the center would support research on public policies related to firearm violence by (1) conducting its own research and (2) distributing small grants to other institutions for research. The legislation requires UC to report every five years (beginning December 31, 2017) on the program.	5.0
Transportation policy research	Funding augments UC’s longstanding Institute of Transportation Studies. The budget act requires UC to develop an expenditure plan with the Transportation Agency and complete a review of the Project Resourcing and Schedule Management information technology system developed by the Department of Transportation.	3.0
Marine mammal aid	Funding reimburses the Wildlife Health Center at UC Davis for marine mammal stranding rescue centers ($2 million) and a response team to disentangle whales caught in fishing gear and marine debris ($100,000).	2.1
aAll funding provided in the budget act. Funds flow through UC for every program listed except precision medicine research, for which funds flow through the Office of Planning and Research. All initiatives supported with state General Fund except for the transportation initiative, which is supported with monies from the Public Transportation Account in the State Transportation Fund. Trailer legislation refers to Chapter 24 of 2016 (AB 1602, Committee on Budget).

Authorizes UC to Fund Merced 2020 Project. The project will add 917,500 assignable square feet of facility space (more than doubling existing space) to the Merced campus. Through the expansion, UC Merced intends to accommodate a total of 10,000 FTE students by 2020, as compared to the 6,200 FTE students it served in 2015–16. The entire project costs $1.1 billion, with the portion of the project associated with state–funded facilities costing $527 million. To deliver the project, UC will enter into a public–private partnership. UC will provide $400 million in bond funding for state–eligible facilities, with the remaining $127 million in funding from debt issued by the partner. Once construction is completed in 2020, the partner will operate and maintain the facilities for nearly 30 years. Pursuant to Chapter 22 of 2015 (SB 81, Committee on Budget and Fiscal Review), UC must use its own staff for routine maintenance. UC will use its General Fund appropriation to provide ongoing payments for (1) the debt service on UC bonds; (2) routine maintenance conducted by its staff; and (3) annual payments to the partner for its debt service, operations, and maintenance costs. In 2055, UC will assume responsibility for all facility operations and maintenance.

Hastings College of the Law

Total Spending of $62 Million for Hastings. Of total Hastings spending, $22 million is covered from tuition revenue (after discounts), $15 million from state General Fund revenue, and $24 million from various other sources, including investment income, federal grants, donations, and student housing fees.

$2.5 Million Increase in Spending for Hastings’ Education Program. Student tuition and state General Fund revenue are the primary sources of support for Hastings’ education program. Spending on Hastings’ education program increases $2.5 million (6.4 percent) in 2016–17 over the revised 2015–16 spending level. Tuition revenue, however, declines by $4.6 million (17 percent) due to increases in tuition discounts ($3.3 million) and a 3.7 percent drop in enrollment ($1.3 million). State General Fund revenue increases by $3.3 million (27 percent), primarily to pay for deferred maintenance ($2 million). Combined, these two core funding sources are down a net of $1.3 million. Hastings is addressing the resulting $3.8 million operating imbalance (stemming from $2.5 million in higher expenditures and $1.3 million less in core revenues) by drawing down its reserve. Hastings estimates ending 2016–17 with $1.2 million in remaining reserves.

Lease Revenue Bond Funding for New Academic Facility at Hastings Increases by $18.8 Million. The 2015–16 budget authorized $36.8 million in state lease revenue bonds to build a new academic facility on vacant land owned by Hastings. The new facility is intended to replace an existing academic facility whose building systems are reaching the end of their useful lives. Hastings will use a design–build procurement method for the project. The 2016–17 budget increases funding for the project by $18.8 million (51 percent) but assumes no changes to the project scope or schedule. The increase is to pay for higher–than–expected construction costs.

California State University

Total CSU Spending of $9 Billion. Of total CSU spending, about 40 percent is covered by state General Fund ($3.5 billion); 25 percent is covered by student tuition revenue ($2.3 billion); and the remainder is covered from various other sources, including self–supporting activities (such as housing, dining, parking, and academic extension fee revenue) and federal funding for financial aid.

Spending for CSU’s Core Education Program Increases $400 Million (7.2 Percent). Of this amount, $275 million is covered by state General Fund, $24 million from student tuition revenue, and $101 million from various sources, including carryover funds and reserves (see Figure 19). Of the new 2016–17 spending, $301 million is unrestricted and $99 million is restricted. Of the increase in General Fund spending, $176 million is unrestricted and $124 million is restricted, with a technical adjustment of $25 million for the removal of prior–year, one–time funding. Of CSU’s unrestricted General Fund, $148 million is associated with a 4.9 percent base increase proposed in the Governor’s budget and the remainder is associated with two conference committee augmentations ($15 million one time and $12.5 million ongoing).

Figure 19

California State University Core Education Budget

(In Millions)

Revenuesa	Amount
2015–16 Revised
General Fund	$3,297
Tuition and fees	2,273
Total	$5,570
2016–17 Changes
General Fund	$275
Tuition and feesb	24
Otherc	101
Total	$400
2016–17 Enacted
General Fund	$3,572
Tuition and fees	2,297
Total	$5,869
Changes in Spending	Amount
CSU’s Plan for Unrestricted Funds
Employee compensation increase (5.2 percent)	$171
Resident enrollment growth (1.4 percent)	59
Employee health benefits	35
Lease revenue debt serviced	8
Pension benefitse	7
Maintenance of newly constructed facilities	1
Otherf	21
Subtotal	($301)
Restricted State General Fundg
Pension benefitse	$37
Deferred maintenance (one time)	35
Graduation improvement plan (one time)	35
Retiree health benefits	12
Open educational resourcesh	2
Equal employment opportunity best practices (one time)	2
Student Success Network	1
Remove one–time, prior–year funds	–25
Subtotal	($99)
Total	$400
aIncludes all state General Fund. Reflects tuition after discounts. In 2016–17, CSU is projected to provide $671 million in discounts. bGenerated from 1.4 percent enrollment growth. cIncludes some unspent funding from 2015–16 carried forward and some campus funds. dPart of a multiyear plan to provide ongoing funding for debt service on projects approved prior to 2014–15. The 2015–16 budget provided an increase of $7.3 million for this purpose. eBeginning in 2014–15, the state provides pension benefit adjustments based on CSU’s 2013–14 payroll level and requires CSU to fund the remaining adjustment from its unrestricted funds. fIncludes $15 million in one–time General Fund. CSU has not yet specified how it will allocate any of the $21 million. It has identified debt service on capital outlay and additional student success initiatives as possible priorities. gExcludes $20,000 ongoing for financial aid to students participating in the Semester at Sacramento program, administered by the Center for California Studies. hImplements Chapter 633 of 2015 (AB 798, Bonilla).

Largest Ongoing Augmentation for Employee Compensation Increases. CSU’s spending plan contains funding for a 5.2 percent employee compensation increase and employee health benefit cost increases. Additionally, the state budget provides direct funding for increases in CSU’s retiree health benefit costs and higher pension costs associated with CSU’s 2013–14 payroll level. CSU funds remaining pension cost increases (associated with compensation above the 2013–14 payroll level) using unrestricted funds.

Resident Enrollment Expectations and Funding. The 2015–16 budget established a goal for CSU to enroll 10,400 more resident FTE students in fall 2016 as compared to 2014–15. Fall 2015 enrollment data released in January indicated that CSU might achieve the entire enrollment goal in the 2015–16 academic year. The 2016–17 budget sets an expectation for CSU to increase resident enrollment by an additional 5,194 FTE students (1.4 percent) in 2016–17 over 2015–16. This enrollment growth is expected to cost $59 million (based on an estimated marginal cost per student of $11,379).

Two Notable Augmentations for Student Success and Support. First, trailer legislation appropriates $35 million one time to develop a plan to improve four–year and two–year graduation rates for freshman and transfer students, respectively, and close gaps in graduation rates for three groups of students: those who are (1) low income, (2) underrepresented minorities, and (3) first–generation college–goers. The DOF may not release the funding unless CSU submits the required plan by September 30, 2016. Second, the budget provides $1.1 million ongoing to support a network of working groups comprised of staff and employees. The purpose of the network is to investigate the underlying causes of low graduation rates at CSU. The Education Insights Center, located at the Sacramento campus, will administer this funding.

Authorizes CSU to Fund 21 Capital Outlay Projects. In addition to the above augmentations, the state authorizes CSU to undertake a total of $535 million in capital outlay projects. Of this amount, the state gives CSU authority to sell $473 million in systemwide bonds, with the remainder of project funding coming from campus reserves. Over one–quarter of total project costs is for CSU’s systemwide improvement program, which provides some funding to every CSU campus to support upgrades to building systems, improvements to seismic and life safety systems, and renewal of campus infrastructure. The remaining 20 projects include a total of eight new buildings, building replacements, and building additions; ten building renovations primarily intended to address code deficiencies and improve seismic, fire, and life safety systems; and two major campus infrastructure upgrades at the San Diego and Sacramento campuses. The Supplemental Report of the 2016–17 Budget Package contains a description of each of these projects.

CSU Intends to Initiate a Few of These Projects in 2016–17. As of June 2016, CSU indicated it will initiate only the following projects in the coming year: (1) construction of a new science building at Dominguez Hills; (2) renovations of facilities at Fullerton, Humboldt, and Long Beach; and (3) various smaller projects involving upgrades to building systems, improvements to seismic and life safety systems, and other capital renewal.

Crosscutting Issues

One–Time Funding for Deferred Maintenance. The budget contains a package of deferred maintenance funding for several public agencies. Among higher education agencies, the budget provides $35 million each to UC and CSU and $2 million to Hastings. These segments indicate they will use their funding to replace roofs, upgrade building systems, and renew campus infrastructure. Each segment currently reports significant maintenance backlogs. Reported backlogs are $2.6 billion at CSU, at least $1.2 billion at UC, and $8.4 million at Hastings. (As indicated earlier, the budget also provides $185 million for CCC maintenance and equipment. The CCC reports a current maintenance backlog in excess of $1 billion.)

Two Items Related to Employment. First, the budget provides funding for Equal Employment Opportunity (EEO) programs. Specifically, UC and CSU each receive $2 million General Fund one time for this purpose. CCC receives $2 million ongoing Proposition 98 General Fund and $2.3 million one time from a special fund to augment an existing EEO program, bringing total funding to $5.1 million in 2016–17. Budget language requires each segment to report to the Legislature and DOF by December 1, 2016 on the racial, ethnic, and gender composition of its faculty and its efforts to improve EEO practices systemwide. (The budget requires the CCC report annually thereafter for five years.) Second, the budget requires UC and CSU, by January 1, 2017, to (1) review policies and procedures pertaining to outside employment of university executives and senior managers, and (2) report to the Legislature and DOF on any changes made to those policies or procedures.

Plans to Increase Degree and Credential Production. The budget act requires all three segments to submit reports to the Legislature and DOF by March 1, 2017 on how they will increase the number of degrees and certificates they produce. UC and CSU must develop plans to produce 250,000 and 480,000 more bachelor’s degrees, respectively, by 2030 than they would under the Public Policy Institute of California’s (PPIC’s) baseline projections. These targets are based on a PPIC proposal to generate a total of 1 million more bachelor’s degrees statewide by 2030. The CCC report is to identify fiscal and policy changes needed to align associate degree and certificate attainment with the California Strategic Workforce Development Plan. This plan sets forth a goal to produce 1 million associate degrees and certificates with demonstrable labor market value between 2017 and 2027. The CCC report also is to provide specific actions and recommendations to close attainment gaps for targeted subgroups over this period.

Financial Aid

$2.1 Billion for Financial Aid. Of this amount, $1.2 billion is from the General Fund, $926 million is federal Temporary Assistance for Needy Families (TANF) funding, and $24 million is from state special funds and reimbursements. Financial aid spending from these sources increases $118 million (6 percent) from the revised 2015–16 level. Of the increase, $116 million is ongoing and $2.3 million is one time. Year over year, General Fund support decreases by $293 million whereas TANF support increases by $405 million, with a $7 million increase from special funds and reimbursements.

Provides $90 Million for Increased Cal Grant Costs. This is a 5 percent increase from the revised 2015–16 level, bringing funding for Cal Grants to $2 billion in 2016–17. The increase is almost entirely due to a projected 5 percent increase in the number of awards. Renewal awards account for three–quarters of this growth. The growth in renewal awards is due to growth in new awards in recent years. The budget also assumes two changes to maximum award amounts. First, the budget assumes a $54 increase in the maximum UC award due to UC increasing its Student Services Fee by this amount. This increases Cal Grant costs by $4.1 million. Second, the budget assumes the Cal Grant Access Award supplement increases from $8 to $22 (on top of the base award amount of $1,648 per student). This increase is due to College Access Tax Credit Fund revenues growing from $1.8 million in 2015–16 to $5.1 million in 2016–17. Additionally, the budget increases the amount of federal TANF supporting Cal Grants by $405 million and decreases General Fund by the same amount. This change is a fund swap and has no programmatic effect on the Cal Grant program.

Adjustments to Funding for Middle Class Scholarships. Statute sets forth state appropriations for Middle Class Scholarships. The 2015–16 budget package revised the statutory appropriations down to reflect savings from the creation of an asset ceiling and other modifications to the program’s eligibility requirements. The 2016–17 budget package lowers the budget–year and out–year statutory appropriations by $42 million to reflect greater–than–expected savings from these changes. Specifically, trailer legislation reduces the appropriation for 2016–17 from $116 million to $74 million and the appropriations for 2017–18 and thereafter from $159 million to $117 million. After making these adjustments, funding for the program increases by $26 million from the revised 2015–16 level. The year–to–year increase reflects increased participation and the continued phase–in of higher award amounts.

Increases Funding for Chafee Foster Youth Grant Program. This need–based program provides certain current or former foster youth with up to $5,000 per year for college attendance costs at any eligible postsecondary institution. (To be eligible, an institution must be participating in the federal Pell Grant program.) The Chafee grant program is supported with state and federal funds. The budget increases state support for the program from $6 million in 2015–16 to $9 million in 2016–17—a 50 percent increase. Federal support is expected to remain flat at $5.6 million. The $3 million augmentation is expected to provide awards to an additional 922 students, bringing total grant recipients up to an estimated 4,512 students. (CSAC reports that over 1,100 eligible applicants did not receive awards in the most recent grant cycle due to insufficient funding.)

Increases CSAC State Operations Funding. The budget includes two items relating to CSAC’s information technology (IT) system. The budget provides CSAC with $2 million ($1.4 million one time and $526,000 ongoing) to address risks identified in a recent security audit of its current IT system. Additionally, the budget provides CSAC with $396,000 one time to continue planning a new IT system. The commission is expected to perform the second and third stages of the Department of Technology’s four–stage approval process for the new IT project in 2016–17.

Authorizes CSAC to Receive $500,000 One Time From a Private Foundation. This would allow the commission to conduct research sponsored by the College Futures Foundation. The foundation is a private organization that funds initiatives to help low–income students in California attend and graduate from college. The scope of the arrangement between CSAC and the College Futures Foundations is not yet determined.

California State Library

Total State Library Spending of $53 Million. Of total spending, $34 million (almost two–thirds) is from state General Fund, $18 million from federal funds, and $1 million from special funds. Of state General Fund, $18 million is for direct operations and facilities, with $16 million for assistance to local libraries. The budget includes $7.4 million in new General Fund spending—$561,000 for state operations and $6.8 million for local library assistance. This spending increase is offset by $5.5 million in various downward technical adjustments, resulting in a net year–to–year increase of $2 million.

$4.8 Million Increase for Regional Library Cooperatives. Of this amount, $3 million is one time and $1.8 million is ongoing. This is in addition to the $1.9 million in ongoing funding that the cooperatives currently receive to promote resource sharing within and across regions. The budget directs the cooperatives to use the funding increase to expand these efforts and adds language that allows libraries to adopt new technologies to share resources. The California Library Services Board has discretion in how it allocates funding to the cooperatives. Following current practice, it intends to allocate the ongoing funding based on the number of people residing within each of the cooperative’s boundaries. Trailer legislation requires the cooperatives to report on how they spend one–time funds, with additional reporting requirements relating to the expansion of digital libraries.

Several Other Funding Increases. The budget provides $1 million (one time) for the State Library to administer grants to individuals, organizations, and education institutions through the California Civil Liberties Public Education Program. The grants are to provide education about the internment of Japanese Americans during World War II, with priority for projects that link this experience to other populations facing civil rights violations. The State Library would work with an advisory committee to select and administer the grants. The budget also provides $1 million (one time) for the nonprofit California Historical Society to increase access to exhibitions and public programs at its San Francisco and Los Angeles facilities. It also provides $505,000 (ongoing) for the State Library to purchase additional microfilm ($343,000), database subscriptions ($142,000), and periodical and journal subscriptions ($20,000). The budget includes $56,000 (ongoing) to pay for a 5 percent increase in rent and facilities costs at the State Library’s main library in Sacramento.