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Press Release · January 14, 2004

California Community Colleges Shortchanged

Resources for California's Two-Year Colleges Among Lowest in Nation; UC, CSU, K-12 Systems Receive Funding Priority

SAN FRANCISCO, California, January 14, 2004 — The critical role of California’s community colleges in educating and training the state’s workforce is less than obvious when looking at the system’s financial resources. According to a new study released today by the Public Policy Institute of California (PPIC), the state’s two-year colleges are among the most poorly funded in the country. And although the community college system in California enrolls far more students than the University of California (UC) and California State University (CSU) systems, it has steadily lost financial ground to them — as well as to K-12 education —in recent decades.

The national comparison is grim: In 1999-2000, California ranked 45th out of 49 states in revenue spent per community college student. Put another way, California spends 23 percent less per community college student than does the country as a whole. The study also identifies a growing discrepancy between two-year colleges and the UC and CSU systems. Between 1971 and 2000, per student revenue increased 23 and 24 percent for UC and CSU, respectively, while community college revenue rose a mere 4 percent. The report, Financing California’s Community Colleges, concludes that no change in the missions of UC and CSU can account for this disparity; the state simply places a higher priority on funding its four-year colleges.

The mounting revenue gap extends to the K-12 system as well. Between the 1988-89 and 2001-02 fiscal years, elementary and secondary education in California went from receiving 24 to 44 percent more in state funds than two-year colleges. The significance of this disparity? K-12 and community colleges actually compete for the same resources: As decreed by Proposition 98, which was passed by voters in 1988, the state legislature divides one pool of dollars between the two. “Prop. 98 originally guaranteed that about 11 percent of the fund pool would go to community colleges, but that guarantee has been suspended over the past decade,” says Patrick Murphy, the study’s author and an associate professor of politics at the University of San Francisco. “The way this arrangement has played out is a zero-sum competition: For every dollar the K-12 system gets, one is taken from community colleges. It’s a competition the colleges perennially lose.”

Why care about community colleges? According to the state’s Master Plan for Education, California expects two-year colleges to play a major role in developing its future human capital — a mission the system has pursued despite low funding levels. According to Murphy, community colleges provide about 1.6 million residents — many of them low-income and minority students — with access to higher education. Indeed, 74 percent of all students attending public colleges in the state are in the community college system. The system enrolls three times as many students as CSU and six times as many as UC, including most of the African American, Native American, and Latino students who attend institutions of higher education in California.

Despite the lack of funding, community college tuition in the state is exceedingly low. In fact, fees in California were the lowest in the nation in 2000-01 and remain the lowest despite a recent 63 percent fee hike. Compared to UC and CSU, where students paid 22 and 15 percent of their overall education costs, respectively, in 2000-01, community college students paid just three percent of their costs — and are expected to pay only five percent after the 2003-04 increase.

Given this reality and other limitations community colleges face in raising funds, the study concludes that tuition increases represent a significant source of new revenue. Murphy notes that because current tuition is so low, students in California are ineligible for certain federal government grants and tax credits, and that receiving these benefits could significantly offset the burden of higher tuition. The report also concludes that the legislature should respect the original agreement to share about 11 percent of Proposition 98 funds with community colleges.

The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.