Lawmakers Approve Overhaul of Community College District Funding System

Lozano Smith Client News Brief
August 2018
Number 42

State lawmakers have approved an overhaul of the funding system for California's community colleges. The new Student-Focused Funding Formula for general purpose apportionments will be phased in over three school years, starting in 2018-19. The formula aims to equalize access and improve outcomes for community college students by tying a portion of annual funding to student equity and success.

The formula was included in a budget trailer bill, Assembly Bill (AB) 1809, which was part of the budget package Governor Jerry Brown signed on June 27, 2018. The bill added Education Code section 84750.4, which spells out the specifics of the formula. The final version of the formula approved by lawmakers reflects a compromise with Governor Brown, who proposed a new funding formula in January 2018. The Governor's original proposal would have devoted a greater share of funding to student equity and success measures and would have been fully effective this school year.

Under the final version, 70 percent of state apportionment funding for most credit-based full-time equivalent students (FTEs) will be based on enrollment alone, while 30 percent will be tied to student equity and success measures. By the 2020-21 fiscal year, 60 percent of state apportionment funding for community college districts will be based on enrollment alone, while 40 percent will be tied to student equity and success measures.

The student equity funding will be provided in the form of a supplemental allocation based on the number of low-income students a college district serves. The other major funding component will be provided as a "student success allocation" based on degrees and certificates earned, transfers to four-year colleges and universities and other factors. Additional funding will be set aside for college districts whose low-income students attain such successes.

This new student equity and success funding will be allocated on a points-based system that ties points to certain student characteristics. The points will be tied to specific funding rates.

For college districts whose funding would drop under the new formula, there is a "hold harmless" provision that maintains a funding floor for the next two fiscal years at 2017-18 levels, plus cost of living adjustments. For the 2020-21 fiscal year and beyond, college districts will receive the higher of either (1) the amount based on the new formula or (2) the 2017-18 base allocation rate, whichever is higher.

The law additionally maintains higher base allocation rates for 10 specific community college districts that had higher base allocation rates in place during the 2017-18 school year, though these amounts will be subject to decrease over the three-year phase-in period.

AB 1809 also requires each college district's governing board to certify that it will adopt local goals aligned with the California Community Colleges' Vision for Success plan by January 1, 2019. This plan includes a goal of increasing the number of students who obtain degrees and jobs in their field of study and transfers to four-year state colleges or universities.

Unlike the funding allocated under the Local Control Funding Formula to K-12 school districts, this formula does not explicitly require community college districts to spend supplemental and student success allocations to directly benefit the specific student populations upon which the allocations are based. However, it does require each college district to align its comprehensive plan with its local goals and to align its budget with that plan.


As made clear by the statutory provisions enacting the new funding formula, community college district leaders should be prepared to analyze the short-and long-term fiscal impacts of this new funding plan on their students and on supporting programs and services. District leaders may also wish to reach out to legal counsel to explore the potential legal ramifications of the new formula and the impacts it may be expected to have on each college's staffing and programmatic offerings.

For more information on the Student-Focused Funding Formula and how it will affect your district, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.
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As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.