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Higher Education in California: Performance Budgeting

By Hans Johnson, Patrick Murphy, Margaret Weston, Kevin Cook

As California begins to reinvest in public higher education after several years of budget cuts, it could opt to tie funding more closely with outcomes—for example, the number of students educated or degrees awarded. This approach, known as performance-based funding, has the potential to incentivize investment by the state’s higher education systems in areas that further state priorities. Drawing on California’s minimal experience with performance-based funding and the approaches other states have pursued, this report raises four important questions for the state to consider if it wants to link funding for higher education with outcomes without compromising on either quality or equity.


Higher Education in California: Student Costs

By Jacob Jackson

Increases in tuition across California’s public four-year universities have heightened concerns about the affordability of a college education, especially for those with the lowest incomes. In-state full tuition at the University of California (UC) and California State University (CSU) has risen more dramatically than at other public universities in other states over the past decade. During this same period, the federal, state, and institutional grant and scholarship programs that help make college affordable for students from lower- and middle-income families expanded. This helped lower-income families keep up with rising tuition, but the full price of college beyond tuition can still be a relatively large share of their income. Given the importance of higher education to California’s economic future, policymakers at the federal, state, and institutional levels need to make a continuing commitment to keep college affordable for students from low- and middle-income families. Also, given current tuition levels, it is more important than ever for the state to ensure that all students fill out financial aid forms and can easily access tools that can help them understand the financial aid packages they are offered.


Higher Education in California: Institutional Costs

By Hans Johnson, Patrick Murphy, Margaret Weston, Kevin Cook

Over the past 20 years, in-state tuition at both the University of California (UC) and the California State University (CSU) has more than tripled. These tuition increases have led many to believe that spending in the state’s public higher education systems is out of control. However, a closer look reveals that institutional expenditures in the two systems—including faculty salaries and benefits, the largest budget category—have not increased significantly. Our evaluation of both revenues and expenditures shows that recent tuition increases have been driven by dramatic reductions in state subsidies to UC and CSU. In the past, General Fund contributions covered the majority of educational costs. Today, students (often with help from federal, state, institutional, and private grants) pay most of these costs through tuition and associated fees. Better budget data could help policymakers monitor costs and align higher education funding with state goals. But it is clear that tuition at California’s public universities has risen much more rapidly than the cost of providing higher education.


California’s Need for Skilled Workers

By Sarah Bohn

If recent trends continue, California is likely to face a shortage of workers with some college education but less than a bachelor’s degree by 2025. State and federal policymakers have increased their focus on boosting educational opportunities for this segment of the workforce. This report examines labor market outcomes among workers with some college training to shed light on the types of jobs that hold the most promise for future workers and the state economy.

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