CSU Administration Legislative Report
August 09, 2002

THE CALIFORNIA STATE UNIVERSITY
Charles B. Reed, Chancellor
Karen Y. Zamarripa, Assistant Vice Chancellor, Office of Governmental Affairs
915 L Street, Suite 1160 - Sacramento, California 95814 - (916) 445-5983

TRUSTEE ICAZA CONFIRMED BY STATE SENATE

The appointment of Ricardo F. Icaza as a member of the California State University Board of Trustees was confirmed on Thursday by the State Senate. The vote to confirm was 33-0, with all Senators present voting in favor on the nomination. Mr. Icaza is the Chief Executive Officer of United Food and Commercial Workers (UFCW) Local Union 770. With 28,000 members, it is the largest local within UFCW, which has a combined membership of 1.3 million in the United States and Canada. Mr. Icaza is also a Vice President of the United Food and Commercial Workers International Union. A member of Local 770 since 1956, and its president since 1981, Mr. Icaza has also served on its staff in several capacities, including research assistant, organizer, business representative, and secretary- treasurer. Local 770 represents employees in retail food, meat and drug stores; meat packing and food processing plants; pharmacies; laboratories; barber and beauty culturist shops.

State Budget Update

BUDGET IMPASSE CONTINUES AS FINAL MONTH OF SESSION BEGINS

As the Legislature returned officially to begin their final month of session, the budget impasse continued with the budget bill on the Assembly Floor, where it is has been stalled since the Senate approved it during the last week of June. After approving a budget on June 29, the Senate adjourned and began a five-week Summer Recess. The Assembly stayed in session during the month of July, but failed to make any progress on the budget or other legislative matters.

The Higher Education Package

The budget approved by the Senate included a higher education package endorsed by both parties and the Davis Administration. The package, which was adopted late in the Conference Committee process, essentially returned funding for the California State University (CSU) to the levels that were contained in the May Revise. Among other higher education actions, the package restored several reductions to the CSU budget that had been adopted during the subcommittee process, including a $800,000 reduction to the system's General Fund base (taken from the revenue generated by the increased rate for nonresident tuition), and a $3 million reduction in funding provided for Executive Management. The package maintained a reduction in advertising funds for the Cal Teach teacher recruitment program, and included a $1.1 million reduction in funding for CSU service learning courses.

During the impasse there has been no indication of interest in further reductions for education, but CSU will continue to monitor the situation closely should budget negotiations lead in new directions.

"Daily Drills" in the Assembly

This week, the Assembly has conducted several budget "drills," none of which have resulted in the 54 votes necessary to pass a budget (and in a few cases, no votes at all). In what was viewed primarily as a political exercise, Democratic members on Monday evening presented an alternative budget that they said met the "no new taxes" pledge of Republicans, and contained numerous programmatic cuts proposed in the last several months by the Republican Caucus. The proposal received no favorable votes, with Assembly Member George Runner (R-Lancaster) commenting that Californians did not want legislators "who want to play games in the middle of the night." Assembly Member Tom Calderon (D-Montebello) countered that the Democratic proposal "showed them [Californians] what you haven't - your cuts."

On Tuesday, Assembly Speaker Herb Wesson (D-Los Angeles) presented a second alternative budget proposal, one which replaced the proposed increase in the Vehicle License Fee with a $3-a-pack tax on tobacco. The proposal was again met with opposition from Republicans: Assembly Member John Campbell (R-Irvine), the Vice Chair of the Assembly Budget Committee and a member of the Budget Conference Committee, said that his caucus was pleased to have Vehicle License Fees "off the table," but "to substitute one tax for people who own cars for one on people who smoke, watch satellite television, work for public companies and own real estate doesn't make it palatable to us."

Forecast Gloomy for 2003-04 Cycle

Two recent letters receiving wide public attention have generally confirmed that while this year's budget situation is highly problematic, next year will find the state in an even more precarious fiscal situation.

The first letter, written by Legislative Analyst Elizabeth Hill in July in response to an inquiry from Senate Republican Leader Jim Brulte (R- Rancho Cucamonga), indicated that if the budget proposal approved by the Senate is enacted, the state could face shortfalls in the next five fiscal years totaling $51.6 billion.

The second, a letter sent this week from Director of Finance Tim Gage to the heads of State Agencies, warns agencies that the Department of Finance anticipates the need for additional cuts in 2003-04 and that departments should be prepared to submit reduction plans of up to 20%. The letter states, "it is expected that reductions for the 2003-04 budget will be more complex, and require the elimination of programs or layoff of employees."

When Will It Happen?

At this juncture, even the most optimistic observers believe the impasse will continue until the scheduled end of session on August 31, and perhaps beyond. Assembly Speaker Wesson stated this week that Democrats are prepared to "stay here until Christmas" to fight for a budget which does not include additional program cuts, and Assembly Republican leaders have remained steadfast and unified in their opposition to any budget which contains additional tax increases. To date the Davis Administration has not directly engaged the Republican leadership in any budget negotiations, focusing instead on individual targeted Republican members. In addition, Senate involvement in the impasse has been limited primarily due to their absence during July. We will continue to report on the budget situation as developments warrant.

GOVERNOR SIGNS TRUSTEE-SPONSORED LEGISLATION

In July, Governor Gray Davis signed Assembly Bill 1863 (Committee on Higher Education), legislation sponsored by the Board of Trustees which extends Trustee authority to adopt, amend or repeal regulations pertaining to the California State University (CSU).

As signed by Governor Davis, AB 1863 also requires the CSU to submit an annual report to the Governor and the Education policy committees in the Legislature on the number of regulations adopted during the previous calendar year, any concerns that were raised regarding any regulation during the public review process, and any actions taken by the CSU to alleviate those concerns.

The bill goes into effect on January 1, 2003.

PROPOSITIONS SET FOR NOVEMBER BALLOT

Last month, the Secretary of State's office assigned numbers to the propositions that will appear on the November General Election ballot. In addition to Proposition 47, the Kindergarten-University Public Education Facilities Bond Act of 2002, the following propositions are set for November:

Proposition 46, the Housing and Emergency Shelter Trust Fund Act of 2002, which would allow the state to sell $2.1 billion of general obligation bonds to fund 21 housing programs.

Proposition 48, Court Consolidation, which would make technical and conforming changes to the Constitution recommended by the California Law Revision Commission related to court consolidation.

Proposition 49, pertaining to After School Programs, which would make various funding changes to the state's Before and After School Learning and Safe Neighborhoods Partnership program.

Proposition 50, the Water Quality, Supply and Safe Drinking Water Projects and Coastal Wetlands Purchase and Protection Bond Act, would allow the state to sell $3.44 billion in general obligation bonds for various water-related programs. More than half of the funds would be allocated to two purposes - coastal protection and the CALFED Bay-Delta Program.

Proposition 51, Transportation - Allocation of Sales and Use Taxes Raised From Sale or Lease of Motor Vehicles, would redirect to transportation-related purposes 30 percent of the sales tax revenue from the lease and sale of new and used motor vehicles that currently goes to General Fund-supported programs.

Proposition 52, Election Day Voter Registration, would allow eligible citizens, upon presenting proof of current residence, to register to vote up to and including election day.

A complete analysis of each proposition can be found on the website of the Legislative Analyst's Office at: http://www.lao.ca.gov/initiatives/qryPropositions_by_election_11-2002.asp.

SENATE EDUCATION COMMITTEE TAKES UP SUSPENSE FILE

In a hearing that originally had been scheduled for early July, the Senate Education Committee on Wednesday took action on bills that they had referred to their Suspense File. The committee began this practice last year as a result of the state's difficult fiscal situation. While on Suspense, members of the committee and staff worked to consolidate similar measures, and amend others to reduce their impact on the state's General Fund. In many cases, the committee held bills, indicating that although some were meritorious, sufficient funds did not exist to implement them adequately.

Among the bills of interest to the CSU that were held in committee was Assembly Bill 2225 (Lowenthal), which would have required the system to meet new standards in the use of personal services contracts in the $25,000-$300,000 range. CSU opposed the bill because it was in conflict with existing statutes and collective bargaining agreements, and its expected fiscal impact (estimated in excess of $2 million annually). Also held in committee were the following bills:

Assembly Bill 1747 (Briggs), which would have required the California Postsecondary Education Commission (CPEC) to conduct a study of the statewide need for new higher education facilities, including but not limited to the higher education needs of Tulare County. The bill included a $75,000 appropriation for this purpose.

Assembly Bill 2153 (Firebaugh), which would have required the president of each CSU campus to make public any proposed changes in the admission, retention, or remediation policies at that campus. Assembly Member Firebaugh dropped the bill because the Board of Trustees will be considering adoption of such a policy at their September meeting.

The committee also approved several bills of interest to the CSU, including the following:

Assembly Bill 2295 (Oropeza), which would require CPEC to prepare a report on intercollegiate athletics in California and that the report include findings related to the percentage of participating women athletes, the percentage of funding and scholarships for women athletes, and the overall level of compliance with Title IX by postsecondary educational institutions in the state.

Assembly Bill 2314 (Thomson), which would require, by September 1, 2005, the CSU and the California Community Colleges to (a) standardize all nursing program prerequisites on a statewide basis, and (b) enter into nursing program articulation agreements.

Assembly Bill 2533 (Jackson), which would require the State Auditor, by January 1, 2004, to conduct an audit of a sample of not less than 6 institutions of postsecondary education in California to evaluate the procedures used by the institutions to identify, gather, and track data for publishing, disseminating, and reporting accurate crime statistics in compliance with the federal Clery Act.

All of the above-referenced bills now advance to the Senate Appropriations Committee.

Ten Years Ago in the CSU Legislative Report: Another Time, Another Budget Crisis

The longest budget impasse on record occurred in 1992, when budget negotiations lasted throughout the Summer and the budget was not signed into law until September 2 of that year. The article below, which appeared in the August 14, 1992 edition of the CSU Legislative Report, demonstrates that while the cast of characters has changed, many of the issues remain the same.

GOVERNOR RELEASES NEW BUDGET PROPOSAL

Addressing the protracted budget process which "reflects honest differences," Governor Pete Wilson proposed a new budget plan in an effort to move out of the "budget hostage crisis."

While there is no change in the total reduction for higher education, the new plan contains:

The Governor remarked that while he and the legislative leadership agree with many of these components, there were "still tough choices to make." He said that the budget is a "zero sum game of spending cuts," and that protections in one spending area necessitate cuts in others. Governor Wilson called on the Legislature to act as soon as possible on the proposal. During today's Assembly floor session, Assembly Speaker Willie Brown announced that the Governor's proposal would be available this afternoon and that action on this, and the Conference Committee proposal contained in SB 1280 (Alquist) would be taken on Monday.


The CSU Legislative Report is published by the CSU Office of Governmental Affairs on a bi-weekly basis when the Legislature is in session.

EDITOR: Jeff Vaca

WRITERS/CONTRIBUTORS:

Gregory B. Harrison, Jason D. Hioco, K. Wess Larson, Sara I. Ramirez, Jeff Vaca, Karen Y. Zamarripa

WEBMASTER: Garrett Tsujiuchi

The Legislative Report is available on the World Wide Web at http://www.calstate.edu/GA/