The 2020-21 Budget

Fresno Integrated K-16 Education Collaborative

Introduction

In this post, we analyze the Governor’s proposal to establish the Fresno Integrated K-16 Education Collaborative (the Collaborative). Under the Governor’s proposal, the Collaborative would be tasked with developing additional education pathways that help Fresno-area students move from high school to college and into the workforce. The Governor links this proposal with a broader set of proposals addressing educational and employment disparities in the Fresno region. Below, we provide relevant background, then describe the Governor’s proposal in more detail, assess the proposal, and make an associated recommendation.

Background

In this section, we first explain how major state and federal funding formulas address regional education disparities. We then describe education pathways and discuss the state’s many ongoing efforts to promote streamlined pathways. Next, we highlight some efforts in the greater Fresno region to facilitate the development of additional education pathways.

Many Education Formulas Provide More Ongoing Funding to Disadvantaged Areas. For schools, both the state-developed Local Control Funding Formula and the main federal funding formula (Title I of the Every Student Succeeds Act) provide additional funding based primarily on low-income student counts. For the California Community Colleges (CCC), the state-developed Student Centered Funding Formula similarly provides additional funding based on low-income student counts, with even more funding provided if these students attain certain educational outcomes, such as transferring to a four-year university. The state and federal government also fund various categorical and financial aid programs designed to help low-income students access and complete postsecondary education.

State Allows Localities to Innovate and Tailor Programs to Their Students. The state gives schools, colleges, and universities significant flexibility in how they may use their core funding allocations. With their core ongoing funding, education agencies may develop local initiatives to enhance student engagement, encourage career exploration, promote program completion, reduce time to diploma or degree, and narrow achievement gaps. Education agencies also may coordinate to create articulated education programs. To aid in meeting local goals, education agencies may use their core funding to support counselors, tutors, mentors, industry partners, and program coordinators, among other expenses.

Education Pathways Refer to Many Types of Coordinated Instructional Programs. An education pathway can be any route that takes a student from one level of education to another level and ultimately into the workforce. For example, one typical pathway is for a student to move from a health-focused high school academy into a community college program to become a licensed vocational nurse, then potentially onto a four-year university to complete upper-division coursework and become a registered nurse. In some cases, pathways can be integrated—typically implying that instruction is accelerated. For example, some students are in dual enrollment programs allowing them to complete community college courses while still in high school, with the potential to earn their associate degree more expeditiously than in a traditional education pathway.

State Has Sustained Numerous Efforts Focused on Streamlining Education Pathways. For more than a decade, the state and education agencies have been making many concerted efforts to create clear, streamlined education pathways. For example, at the high school level, the state has encouraged dual enrollment programs. In 2018‑19, approximately 49,000 full-time equivalent students were enrolled in these programs, up from 19,000 students five years earlier. At the community college level, colleges now have “associate degrees for transfer” in many academic subjects. These degrees allow students to complete lower-division coursework at a community college in a clearly delineated two-year pathway, then complete upper-division coursework at a California State University (CSU) campus in another two years. In 2018‑19, approximately 59,000 students graduated from CCC with an associate degree for transfer, up from approximately 12,000 students five years earlier. The state also has supported CSU’s Graduation Initiative to promote more streamlined college pathways that reduce time to degree and reduce excess unit taking. In 2018‑19, CSU’s four-year graduation rate had improved 9 percentage points compared to five years earlier.

State Funds Several Ongoing Efforts to Promote Regional Collaboration. The state also has promoted the creation of additional education pathways by establishing regional consortia. In 2016‑17, the state created the Strong Workforce Program to coordinate career technical education pathways through seven regional consortia. The program’s $412 million in ongoing state funding supports both community colleges in developing education pathways aligned with regional workforce needs and high schools in developing pathways aligned with those of partnering community colleges. In 2015‑16, the state took a similar regional approach in creating the Adult Education Program. Through this program, the state provides $544 million ongoing to 71 regional consortia comprised of school districts and community colleges to coordinate precollegiate instruction for adults, with an eye toward streamlining pathways to postsecondary education and employment.

State Recently Funded a One-Time Initiative Focused on Regional Innovation. The 2019‑20 budget provided $10 million (one-time General Fund) to implement innovative educational strategies specifically in the San Joaquin Valley and Inland Empire. Under this initiative, schools and higher education institutions in the two regions can apply for competitive grant funding. The grants are for improving alignment between secondary and postsecondary programs, increasing college going and college completion, reducing achievement gaps, and creating “a multigenerational culture of educational attainment.” The Governor’s Office of Planning and Research (OPR) is administering this program. By July 2020, OPR must provide the Legislature with a summary of the activities supported by the grants. By January 2022, OPR must provide a summary of associated student outcomes.

Central Valley Has Longstanding Education Consortium. In 2000, 18 postsecondary institutions established the Central Valley Higher Education Consortium (CVHEC) to support a variety of regional initiatives aimed at increasing college attainment. This consortium now consists of 27 postsecondary institutions, including all of the region’s community colleges and public universities as well as five private universities. In conversations with our office, staff at CVHEC indicated that its members are developing a regional strategy to expand dual enrollment programs. According to CVHEC, it held one initial meeting on these matters in October 2019, with the next meeting scheduled for March 2020.

Fresno Community Leaders Have Developed a Regional Improvement Plan. In 2019, a group of community leaders released a ten-year plan to make certain improvements in the greater Fresno region. The plan is known as the Fresno Developing the Region’s Inclusive and Vibrant Economy (DRIVE) initiative. The plan consists of three central components: (1) economic development (focusing, for example, on job creation), (2) neighborhood development (focusing, for example, on affordable housing), and human capital. The human capital part of the plan contains several education-focused initiatives. These include improving early education programs, developing integrated education pathways, and supporting degree completion.

Proposal

Governor’s Proposal Funds Development of New Education Pathways in Fresno Region. The Governor proposes providing $17 million (one-time General Fund) to establish the Collaborative, which would be made up of education institutions in the greater Fresno region. Provisional language directs the Collaborative to “better align educational programs at all levels, increase degree attainment, and better link educational programs to workforce needs.” As specified in the Governor’s Budget Summary, this proposal is based upon a human capital piece of the Fresno DRIVE initiative that focuses on developing integrated education pathways. In correspondence with us, the administration indicates that the Collaborative might develop a handful of pathways—potentially in areas such as teaching, engineering, and accounting. (The Governor’s budget package funds two other pieces of the Fresno DRIVE plan—an economic development initiative focusing on agriculture and a second human capital initiative, which focuses on expanding medical school capacity in the region.)

Proposal Has No Specific Spending Requirements. The Governor proposes giving the funds to OPR, which in turn would pass through the funds to a Fresno-based fiscal agent (likely an education institution in the region participating in the Collaborative). Budget provisional language does not specify how the funds would be spent. According to the administration, the funds likely would be used to hire more counselors, support additional summer enrollment and dual enrollment, and cover planning and coordination costs. Provisional language makes the funds available for three years (through June 30, 2023). To the extent the administration believes the pathways at the end of three years are successful, it indicates it would consider proposing additional funding in future years to scale the pathways statewide.

Assessment

Need for One-Time Funding for Proposed Activities Is Not Justified. Given the billions of ongoing dollars the state already provides for educating disadvantaged students, promoting streamlined education pathways, and supporting regional coordination, the administration has not made a compelling case that additional, one-time funding is needed to create new pathways in Fresno. For Fresno County alone, we estimate public education institutions currently receive a combined almost $3 billion in ongoing core funding. (As discussed in the nearby box, Fresno County ranks relatively high among counties on some key education performance measures.) Existing ongoing funding has the advantage of allowing any newly identified effective strategies to become core to what a region is doing. In contrast, the Governor’s approach provides a small, one-time add on that might have only limited, short-term benefit.

If Governor’s Approach Were to Be Scaled Statewide, Costs Likely Would Be Substantial. The Governor’s initiative could create substantial cost pressure in future years. This is because most of the activities (such as hiring additional counselors and expanding summer enrollment) that the administration indicates would be funded through the one-time initiative are ongoing in nature. Cost pressure is further heightened because the Governor’s initiative funds only a small portion of the amount being requested by the Fresno DRIVE initiative, which seeks a total of $330 million through 2030 to implement new integrated pathways in the region. Moreover, the Governor’s proposal implements only one of the several educational strategies that Fresno community leaders desire to implement, with requested funding escalating to a total of more than $2.5 billion over the next ten years if all these strategies were implemented in the region. Based on these estimates, transporting one or more of the Fresno DRIVE education strategies to other disadvantaged areas of the state could cost billions of dollars.

Results of Latest Innovation Initiative Are Not Yet Available. The state has not yet had an opportunity to learn from the very similar innovation initiative it funded in 2019‑20. Without knowing the outcomes of that earlier initiative, the Legislature has little basis to know whether the new Fresno initiative would duplicate activities already underway. If the Legislature were to wait until OPR submitted its required 2022 report on student outcomes, it would have better information upon which to decide how best to move forward.

Pathways Proposal Lacks Key Details. The Governor’s pathways proposal does not: (1) identify the target student population, (2) explain how any new pathway efforts in the Fresno region would interact with existing efforts in the region, (3) include a detailed budget, or (4) require an evaluation. Given the demonstration aspect of the initiative, not requiring an evaluation is of particular concern. Without a rigorous evaluation, the Legislature would not know whether the initiative achieved its desired objectives and is worthy of scaling statewide.

State Has Many Existing Unfunded Liabilities It Could Address With One-Time Funds. As we have noted in several other publications, the state has more than $100 billion in unfunded retiree liabilities across state agencies. Education agencies alone have tens of billions of dollars in unfunded pension and retiree health liabilities as well as deferred maintenance and seismic renovation backlogs. In contrast to the Governor’s Fresno pathways proposal, allocating one-time funding to address existing liabilities offers the Legislature more assurance that it is reducing future program costs while improving education agencies’ overall fiscal health and the state’s budget condition.

Recommendation

Recommend Rejecting Proposal. For all the reasons discussed above, we recommend the Legislature reject the Governor’s Fresno pathways proposal. The administration has not made a compelling case that additional state funding is needed to spur creation of more education pathways in the Fresno region. We recommend the Legislature consider redirecting the $17 million in one-time funding toward high one-time budget priorities, such as addressing unfunded liabilities.

If a High Budget Priority, Seek to Improve Proposal. If budget makers were to make the Fresno pathways proposal one of their key 2020‑21 priorities, we encourage the budget committees to request that the administration submit a more complete proposal. At a minimum, we believe the proposal should include a detailed budget plan and an independent evaluation component. For the budget plan, we encourage the administration to delineate how the funds are to be spent each year of the three-year period. For the evaluation, the Legislature, in coordination with the administration, could establish specific goals for the initiative, identify ways to measure progress toward meeting those goals, and establish a reporting time line. We also encourage the Legislature to request that OPR provide an update during spring hearings on the innovative grants it has approved to date. As part of this update, OPR should report the number and types of education innovations currently being supported in the San Joaquin Valley.