LAO 2003-04 Budget Analysis: Education

Legislative Analyst's Office

Analysis of the 2003-04 Budget Bill

California Postsecondary Education Commission (6420)

The California Postsecondary Education Commission (CPEC) is responsible for the planning and coordination of postsecondary education. The CPEC provides analysis, advice, and recommendations to the Legislature and the Governor on statewide policy and funding priorities for colleges, universities, and other postsecondary education institutions. In addition, CPEC administers the federal K-12/University Professional Development Partnerships. The commission has 16 members, representing the public and private university segments, the State Board of Education, students, and the general public.

Proposed Budget. The Governor proposes total General Fund expenditures of $695,000, a decrease of $1.4 million, or 67 percent, from estimated current-year expenditures. This is due to the proposed elimination of 23.5 staff positions and related operating expenses and equipment. The proposed reduction would leave five positions (three General Fund positions and two federally funded positions). The Governor's current-year estimate assumes passage of his December revision, which reduced current-year spending for CPEC by $108,000.

As the state's administrator of the federal K-12/University Professional Development Partnerships, CPEC receives federal funds. The Governor's current-year estimate assumes a decrease in federal funds of $2.9 million, leaving a total of $5 million in federal funds. However, subsequent to the release of the Governor's budget, CPEC notified the Department of Finance that it would receive an additional $3.2 million in federal funds in the current year. 

Analysis of the Governor's Proposal for CPEC

Governor's Proposal. As noted above, the Governor's 2003-04 proposal would leave CPEC with three General Fund positions and two federally funded positions. These include the director, the executive secretary, the postsecondary education manager in the external unit, and the chief associate and the office technician in the Federal Programs Unit. Thus, the Governor proposes no staffing for CPEC's information systems and administrative services unit.

Under the Governor's proposal, the two federally supported positions would continue to administer federal K-12/University Professional Development Partnerships. The proposal does not address what responsibilities would be assigned to the remaining three state supported staff. The commission, however, would be unable to fulfill the majority of its current statutory responsibilities with such limited staff. In addition, there is little point in maintaining the commission and executive director position if there is no staff to direct or to carry out its research and public agenda.

Major Funding Changes Should Be in Context of Realigning Mission. We believe that any major changes to CPEC's overall funding should be made in the context of realigning its mission and responsibilities so that CPEC's resources match its duties. Once the Legislature determines CPEC's primary mission and statutory responsibilities, then it can determine the appropriate structure for the agency. This is consistent with the Legislature's intent, expressed in supplemental report language in 2002-03, that our office convene a working group to develop recommendations concerning CPEC. That working group met in the fall of 2002 to: 

Report Examines CPEC's Mission, Governance, and Data and Analysis

In our recent report, The California Postsecondary Education Commission: A Review of Its Mission and Responsibilities, we discuss in detail the major issues that were identified in the course of the working group's discussions and our own investigation. In general, we grouped the main observations and findings into three main categories: mission and statutory responsibilities, governance and structural issues, and data and analysis. Although, our report was informed by the working group's discussion, the group was unable to achieve a consensus on many issues. Thus, the following are our own conclusions and are not necessarily shared by all the working group's members.

In general, we found that there is a mismatch between CPEC's statutory responsibilities and its budgeted resources. We recommended that the Legislature assign highest priority to CPEC's data management functions. This is because CPEC has generally been effective in this area and the data that CPEC collects is useful for policymakers. We further noted that there is a tension in CPEC's mission and statutory responsibilities between coordination and independent analysis. Specifically, it is difficult for CPEC, or any other organization, to serve both as a part of the state's higher education infrastructure and as an objective analyst of it. We also found that CPEC's tendency to use a consensus building approach can interfere with its ability to produce objective and independent analysis.

What Role Should CPEC Play in the Future? In our report, we discuss two options for structuring CPEC beyond data management. Choosing between these options will depend on which function the Legislature identifies as CPEC's primary role: coordination or independent policy analysis. Under either scenario, we expect that CPEC would continue to act as a clearinghouse for current and historical postsecondary education information that is relevant to statewide needs. The CPEC would be expected to continue to make its data available to policymakers and stakeholders to improve coordination and long-term planning for higher education.

LAO Recommendation

We recommend (1) approval of $695,000 in General Fund support for the California Postsecondary Education Commission and (2) that the funds be designated for data management purposes.

As noted above, we believe the highest priority should be to preserve CPEC's information systems unit.If this unit were maintained, then CPEC could continue to collect statewide data on postsecondary education, maintain its website, and provide data to interested parties. We believe that the Governor's proposed level of General Fund support ($695,000) for CPEC is reasonable to maintain its data function at a basic level. It would provide funding for five or six information technology positions and general data systems maintenance.

Legislature Should Carefully Assess Responsibilities Beyond Data Management. To the extent that the Legislature wishes for CPEC to retain significant responsibilities beyond data collection and dissemination, we recommend that it take into consideration the tension between its coordination and independent policy analysis functions noted earlier. Specifically, we would recommend that any effort to redefine CPEC's mission beyond data management focus on only one of these two areas.

CPEC Eligibility Study

We recommend the California Postsecondary Education Commission, along with the state's public higher education segments, report at budget hearings on their progress in completing the state's higher education eligibility study.

The 1960 Master Plan for Higher Education calls for the University of California (UC) to admit applicants from the top one-eighth of high school graduates, for the California State University (CSU) to admit from the top one-third, and for the community colleges to admit all adult applicants who can benefit from instruction. These targets were reaffirmed by the Joint Committee to Develop a Master Plan for Education last fall. By establishing these targets, the Legislature has sought to create an integrated system of higher education segments that provides sufficient opportunities for all the states' residents. However, it is up to the segments themselves to establish and periodically adjust their admissions criteria in a way that captures the target populations.

In order to gage how well the segments are doing this, existing law requires CPEC to "periodically" estimate the percentages of California public high school graduates that are eligible for admission to UC and CSU. The most recent CPEC eligibility study was based on a survey of California's 1996 high school graduates. In this report, CPEC found that CSU was drawing from the top 29.6 percent of high school graduates. This is about 3.7 percentage points below CSU's master plan target of about 33.3 percent. On the other hand, the study found that UC was drawing from a considerably larger pool than the top 12.5 percent. Based on CPEC's 1996 survey, the segment was selecting from the top 20.5 percent of public high school graduates.

Since the last CPEC eligibility study was based on a cohort of students that graduated from high school over seven years ago, we do not know how well the segments' current admissions standards achieve their master plan targets. Although CPEC has not performed an eligibility study in recent years, the past three budgets have provided CPEC with a total of $106,000 to conduct such a study. The state has also provided a total of $133,000 to the three segments to help CPEC prepare the study. Given the importance of the eligibility study for understanding enrollment demand, we recommend that CPEC, UC, CSU, and the California Community Colleges report at budget hearings on their progress in completing the study. This report should include their timeline for completing the study.

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