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It's Taco Tuesday! What's your favorite taco within walking distance of the Capitol?
The advertising opportunities page now includes info on advertising on the podcast. In a few hours, Gibran and I are sitting down with John Laird, who recently concluded eight years as Secretary of the California Natural Resources Agency. I've known John since he was a Cabrillo College trustee before he became an Assemblymember and Assembly Budget Chair. In the community college world, we were very lucky to have Senator Denise Ducheny (former San Diego CCD trustee) and Assemblymember John Laird as our Budget chairs concurrently, although it was a crappy time.
We had to negotiate defense with them rather than offense, which is a lot more fun from the spending side. But, they allowed the communtiy college advocates--faculty, classified, administators and my folks of college presidents and trustees--hash out our differences over Chinese food and pizza on nights and weekends. Instead of a surprise list of mid-year or full-year budget cuts, we were given a target total and told to come back with a plan and our work product was largely followed.
I still remember the food preferences/needs of some of those folks 15 years later.
I digress. When Gibran and I get John behind the mic, we'll talk not only about those days or his 2020 bid for SD17 (Central Coast). We're going to talk two of California's biggest issues--fire and water, including the impact on small farms that we find in our foothills and along the Central Coast but are often out-of-sight, out-of-mind in the big policy discussions.
These are two big issues for the small farms that longtime Noonerites know I love. Both issues came up at Sunday's market as I talked to the representatives of the two farms partnering on this April 6 fundraiser for fire victims to be held in Ione. Yes, they know I write about policy and am happy to talk policy as I pick up my chicken, eggs, bacon, and veggies from them each Sunday.
THE OC: For the LA Times, Sarah D. Wire looks at the now unified force of Democrats representing the previous GOP bastion of Orange County. "Four of the newest members defeated Republicans in November to secure their seats. They joined Rep. Lou Correa (D-Santa Ana) who holds a seat that flipped to Democratic control in the mid-’90s, and Rep. Alan Lowenthal (D-Long Beach), one-third of whose constituents are O.C. residents." Wire then takes a look at the four new members.
Okay, I didn't intend the next one to go long form, but it did. There are more stories (including a juicy one) after the jump!
MY APOLOGIES, MORE EDUCATION FINANCE, BUT YOU PROBABLY SHOULD KNOW IF YOU ARE IN POLICY OR HAVE KIDS... I generally don't include opinion pieces in this space, but there was an important line in this and I have great respect for Lance Izumi from his time on the Board of Governors of the California Community Colleges. He was well-liked by all constituencies who also respected his conservatism. Anyway, he's on to an important fact in the education crisis we're facing in, largely, our urban districts. He writes:
"For instance, a 2018 study of the fiscal condition of the Los Angeles Unified School District by the Reason Foundation found that charter schools accounted for only 13 percent of declining enrollment in Los Angeles in 2017-18.
The much bigger reasons for reduced enrollment were declining birth rates and family migration patterns.
Further, the main reason for the financial distress in school districts is not the number of charter schools, but exploding pension costs and health benefits for teachers and other school staff."
The only "moderating" edit I would give Izumi's grafs would be replacing the inflammatory "exploding" with something more politically correct, such as "but pension costs and health benefits for teachers and other school staff growing faster than inflation and other state funding increases."
In reality, either version is true.
For longtime Noonerites, you know that I have purposefully avoided writing on community college issues in this space. There were a few reasons. I had been writing nearly daily on community college finance for fourteen of the twenty years I was at the Community College League of California (League). I enjoyed the community we had and the interaction with so many people on those issues. It was time to step aside from that. Further, I've never wanted The Nooner to be about an agenda, either when I was writing while at the League (mostly just headline summaries) or after when I started this endeavor full-time. Finally, there was the possibility that I would look to return to community colleges in some capacity (I have not).
Anyway, I think most people who worked with me knew me as someone who looked objectively and sought practical solutions. We had close advocacy partnerships with the California Federation of Teachers and Faculty Association of California Community Colleges. I toured the state with the presidents of the Academic Senate of the California Community Colleges to provide technical assistance (smack on the head in many cases) of boards, administrators, faculty, staff, and students on how to work better together in college governance. It was some of the best work I had the opportunity to do.
Back to the topic of education finance and Izumi's column. In the community college world, there has been a long theme of "grow or die." While it was moderated somewhat by changes to the funding formula in SB 361 (Scott, 2016), the fact is that education, like health and human services and prisons, is a workload operation. Each of these programs always will be, while qualitative tinkering will occur on the fringes.
Like a business, public entities have fixed costs to open the door, and then there are marginal costs to serve each "customer" true with all of the aforementioned programs, whether they be at Ironwood State Prison or Orange Coast College. It's like the Hmong family-run corner store across from me that I like to refer to. For Thao to open up each day at 8am, there is an SMUD bill, PG&E bill, property taxes, and, well, you get the picture. Those are fixed no matter how many rolls of toilet paper he sells to me. However, the "profit" (markup) on each roll of toilet paper starts eating down those fixed costs and at some point, I along with hundreds of other customers, exceed the fixed costs and start making it worthwhile Sac State Hornet alum Thao to get up and work seven days a week for his parents. However, if those fixed costs increase faster than he is able to markup that toilet paper and everything else that they sell at Southside, they need more customers.
The same thing is true in public entities. It's "grow, find new money, or die." In the proposed state budget, the cost-of-living (inflationary) adjustment for K-14 schools that is determined by statute but still up to the governor and Legislature to fund is 3.46%, which is relatively high. However, you know personally that health insurance costs are fast outpacing that.
In my view, Governor made a smart budget proposal in January given a largess of "one-time" funds available in the General Fund and due to Proposition 98 (K-14) spending. He proposed spending $3 billion to "buy-down" the unfunded liability of the California State Teachers Retirement System (CalSTRS). Ordinarily, CalSTRS relies on fixed rates for the state (4%), employer (variable), and employees (10.025%-10.25%, depending on date of hire). Those are high rates compared to CalPERS, but remember that CalSTRS members do not pay in to Social Security, nor yield its benefits.
The governor's proposal would lower the employer (K-14 districts) CalSTRS rates from 18.13% to 17.1% in 2019-20 and from 19.1% to 18.1% in 2020-21. The current year CalSTRS employer rate is 16.28%, so instead of increasing by 1.85% effective July 1, the governor proposes that by using one-time funds, the rate will increase 0.82%, which frees up an equal amount for each district of 1.03% of CalSTRS payroll (academic employees & administrators). It's essentially a "super COLA" for districts while also reducing the CalSTRS unfunded liability, which is the reason the rates were going up in the first place. To put it simply, it cuts out the middle-man of sending the money to the districts first before they have to send it to CalSTRS.
So, under that "super COLA" concept considering the statutory COLA and the decrease in the scheduled higher CalSTRS rate, we have a general funding increase of 4.46% for the K-12 Local Control Funding Formula, which I have neither studied nor pretend to understand.
Community colleges see a similar 4.46% general funding increase for the new funding formula that is being developed of which I am not even reading the preface. For community colleges, it is largely still grow (and definitely don't decline) or die.
K-12 and community colleges face two similar enrollment factors--demographics and competition.
Anyone around higher education for a couple of decades recall "Tidal Wave II" of predicted huge increases in enrollment demand that was the Legislative Analyst's Office somewhat doubted. Both sides had valid points. It became moot because the apex of the predicted demand was met with the peak of one of the state's budget crises. For K-12, obviously demographics are well known and are not manageable by policy decisions (funding for growth, fee increases) as in higher education.
For community colleges, competition is for-profit schools and colleges in other districts, whether it be in-person or online (which now includes the competition of an online college run by the state Chancellor's Office). The competition from other districts plagued the Los Angeles Community College District (LACCD) in the 1990s as students sought out the colleges on surrounding LACCD that had reputations of better campuses and better transfer agreements to four-year universities.
This was before uniform transfer agreements statewide between UC and CSU and now, many independent universities. So, if you lived within LACCD near West Los Angeles College, you were only 6.5 miles from Santa Monica College. After "free-flow" no longer requiring district attendance was allowed in 1987, you could choose to go to Santa Monica College, which had better transfer agreements with UCLA, and go to the same school that Arnold Schwarzanegger went to. The author of the free-flow bill? Then-assemblyman Tom Hayden, Democrat from Santa Monica.
Los Angeles CCD enrollment was clobbered following the institution of free-flow. It essentially rebuilt its campuses through the 2000s with the support of voters and state policies were changed by the Legislature and the university systems to provide transfer equity among community colleges.
Back to K-12 and Izumi's column.
K-12 has demographic demand, which is more complicated than you would think. In 2015, EdTrust-West estimated that 250,000 undocumented children were enrolled in K-12 schools in California. 68% are from Mexico, but the other 32% are spread from across the world. Los Angeles Unified enrolls a significant share of these students and I need not tell you that they can disappear overnight. Undocumented students must be allowed to enroll in public school under Plyler v. Doe 457 U.S. 202 (1982), but they can be detained any given day.
So, instead of natural birth statistics demographics, introduce the current immigration environment and K-12 enrollment demand gets murky. This is amplified in urban districts and those serving the children of farm workers. And, while there are not currently mass deportations, immigration has dropped because of the climate so the currently enrolled undocumented students who graduate are not being replaced because of the political environment.
Some may cheer that, some may jeer. All I am talking about here is school finance. From our analogy, the customer base buying toilet paper from Thao at Southside will continue to drop.
In the other element of the demand calculation of competition, public K-12 schools have always faced competition from private and parochial schools. These were largely funded from tuition and philanthropy but separated from much of the state oversight. In 1992, the Legislature authorized the creation of publicly funded charter schools, which are chartered by a district or, in some cases, the State Board of Education. Unlike the previous competition, these schools are tuition-free.
The state is not going to start closing charter schools without just cause. It may very well institute a moratorium on the extreme end or find a middle ground of allowing more discretion of allowing the denial by a local school board of a charter school petition and limit the ability for the shopping around of a petition to other school districts or the State Board of Education after denial. I don't know what the closed door commitments to United Teachers Los Angeles were that helped end the strike, we just know that there were some.
Meanwhile, Izumi has a valid point. Even with a complete charter school moratorium, many districts have a huge financial problem because fixed costs (which include variable costs like salary schedules--see March 2 discussion--and benefits) will increase faster than the "general funding" that can be expected of COLA and growth.
Again, I have not seen the LAUSD-UTLA or OUSD-OEA strike deals penciled out over 5 years and I sure as heck don't have the time to read Sac City Unified School District board agendas, but know that our district's teachers have voted for a strike.
Los Angeles Unified is going to the voters on the low-turnout June 4 ballot for a parcel tax increase. Oakland Unified has a state loan on its books and parcel taxes expiring in 2024 and 2028. The last Sac City Unified parcel tax failed to reach the required two-thirds and the district now faces a budget deficit of ~$30 million and the teachers have voted to go on strike to follow their peers in Los Angeles and Oakland. Others will follow.
When I talk to my friends in labor, they point to the split roll property tax on next November's ballot, knowing that additional state General Fund revenues are unlikely beyond what Proposition 98 is forecasted to provide--even under the optimistic scenarios. On the property tax measure, count me in personally as a "yes" vote, but that's not my job here.
No independent political consultant has read a poll thinks it has a chance on the ballot, and even with a generally supportive governor, a legislative deal with the requisite two-thirds vote in both houses seems unlikely given PPIC's 49% "yes," 43% "no" among likely voters in the January poll. The commercial and industrial property owners are ready to play Whack-A-Mole on any legislative efforts. On the ballot measure, just look at what happened to Prop. 10 (rent control). The commercial and industrial property owners is a far greater political force than residential rental property owners. Voters generally favor rent control and are "meh" on changing Prop 13's treatment of commercial and industrial properties. Prop. 10 failed 40.6% to 59.4% after the "no" campaign scared the hell out of everybody.
Even with the pension reforms championed by Jerry Brown in 2012 and Gavin's wise budget proposal on CalSTRS, "fixed" cost increases will continue to outpace general revenue in all districts. This hits some districts, particularly the urban districts which are also coping with the immigration dynamic, the hardest. To make realistic the optimistic scenario in the collective bargaining agreements to reality, it will likely require either reducing competition (closing charter schools) or even more (not continuation of temporary) local taxes, but of which are stretches.
More and #CAKEDAY after the jump . . .
PPIC AND PENSIONS: Some mornings, I swear that the nonpartisan Public Policy Institute of California can read my draft, my mind, or both. As I finished the above novel, PPIC sent out a fact sheet on public pensions in California.
SHRED IT, DUDE! While not in Huntington Beach shredding the waves like Jeff Spicoli, the city of Fremont did some shredding of its own and got a jump on the new police records law that took effect January 1, reports Darwin BondGraham for KQED.
"Last fall, Fremont’s city council also changed their police department’s records retention policy, reducing the amount of time that investigative files of officer-involved shootings must be saved from 25 years down to 10.
Fremont’s city attorney, police department and city manager did not respond to emails and phone calls seeking comment for this story.
There’s no evidence Fremont violated any state laws or its own policies, but few other Bay Area cities have been as aggressive in purging police files."
The cities of Compton and Inglewood in Southern California have taken similar steps. While many see it justifiably from the police use of deadly force perspective in the current context, it affects other employment-related claims, such as patterns of discrimination or sexual harassment.
FRIENDS IN HIGH PLACES: For CALmatters, Dan Morain reports that the Board of Governors of California Community Colleges yesterday voted to engage an executive recruiter with a $500,000 no-bid contract for the nascent state online community college. The new college's president Heather Hiles, who came from the venture capital doing work for the nonprofit sector and will be paid $350,000 per year, said:
“I felt like she was far and away the best qualified,” Hiles said. Citing her goal of starting classes in a matter months, she added: “If I don’t get it staffed up, I can’t get it built.”
"Before becoming an executive recruiter, [Carolyn] Carpeneti was a political fundraiser whose clients included then-San Francisco Mayor Willie Brown. Brown and Carpeneti became romantically involved and had a daughter in 2001. In 2003, the San Francisco Chronicle reported that “nonprofit groups and political committees controlled by the mayor and his allies” paid Carpeneti $2.33 million over a five-year period."
I have nothing to do with community colleges other than thinking of them and their people with deep affection on a daily basis. I don't care who Willie Brown has been in bed with and may or may not be wearing one of his ex's shirts for the presidency as I type.
However, there are lots of state and national well-connected recruiters that focus on community colleges. I know, as I've been in both state and national pools.
The contract awarded yesterday together with the hiring of the president come across as a loud and clear message to the community college world that the state's new online community college, which competes with existing college online programs, will be run by non-community college folks. It's an entrepreneurial endeavor. You can make up your own mind whether that is a good, bad, or meh thing.
No community college board, chancellor, or president could have pulled this off without a lawsuit, a major conflict with collective bargaining units, or both. Whether that's good or bad, you can decide.
That said, it saddens me because there are a lot of brilliant minds out there on the college campuses that I worked with on student access, success, and equity, and I sure as hell their passion and hard work is not overlooked.
To those in the existing community college trenches, thank you, and keep up your hard work for kids like me.
#CAKEDAY: Happy birthday to LA Councilmember Mike Bonin, Andrew Campbell, Andrea Dima-Smith, Assemblymember Adrin Nazarian, Claudia Peña, and four waters!
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