CSU Business ConferenceMarch 12, 2014

2014: A Year of Recovery and Opportunities

Overview

2014 in Sacramento– State Fiscal Picture

– Elections and Changes

Opportunities and Issues– Budget Advocacy

– Issues

– Elections at Home

2

2014-15 Budget

3

“Despite the recent improvements in our budget situation, there remain a number of major risks… including the remaining budgetary debt and hundreds of billions of dollars in longer term liabilities… That is why wisdom and prudence should be the order of the day.”

- Governor Jerry Brown

4

Proposed CA Budget Breakdown

5

Revenues and Expenditure Way Up Revenue is up $4.5 billion and expenditures

proposed over $8 billion Largest shares to:

– “Wall of debt”

– Proposition 98 (K-12 and community colleges)

– Medi-Cal and Cal Works

– State Deferred Maintenance

6

Governor’s Proposal for Higher Ed

Second year of Governor’s Plan– Increase; no more reductions

– $142 million increase over last year

– No increase in student tuition fees 4th year in a row

Theme: Innovation, efficiency, improvement– Online courses

– Streamline time to degree

– Improve graduation rates

7

It’s Not a Money Problem….It’s About Priorities

General Fund revenues way up– Proposition 30 revenues for all education

Permanent budget increases abound– Double digit in some cases

Real question: Is higher education really a priority?

8

2014 Elections: Change and Stability?

9

For the People’s Consideration…

This Election– All state officers

– New class of freshman legislators

Propositions, propositions, propositions…– Competing interests will affect elections, priorities

10

Governor’s Last Ride

Governor will run for 4th and final term

Other candidates:– Tim Donnelly

– Neel Kashkari

11

How Does the Governor Fare?

Governor Brown*– 60% favorable rating

– 7% of voters aware of race

Secretary of State Campaign shows $15+ million in hand

*PPIC Report “Californians and their Government” – January 2014

12

Neel Kashkari Vs. Tim Donnelly

13

PPIC Statewide Survey January 2014Satisfaction with Governor Candidates*

14*Poll was taken prior to Kashkari announcing

Statewide Races: Contested Races

Controller– John Perez v. Betty Yee v. Ashley Swearengin

Secretary of State– Alex Padilla v. Leland Yee v. Dan Schnur

15

Statewide Races: Downticket Seats

Superintendent of Public Instruction– Tom Torlakson

Insurance Commissioner– Dave Jones

Lt. Governor– Gavin Newsom– Ron Nehring

16

Statewide Races: Downticket Races

State Treasurer– John Chiang (Current State Controller)

Attorney General– Kamala Harris– Phil Wyman?– Orly Taitz?

17

Current Legislative Make-up

Democrats control both houses “Super” majority achieved last election – and

keeping it drives everyone

18

2013-14 Assembly80 members Total - 2/3 Threshold is 54

19

Assembly Leadership Departing

Speaker John Perez

Republican Leader Connie Conway

Budget Chair Nancy Skinner

20

New Speaker:Unlike Senate An Actual Election

Toni Atkins (San Diego)– Termed out in two years

– Close ally of Speaker Perez Freshmen Class Candidates

– Gomez, Rendon, Eggman, Holden New Class

– Candidates in 2016?

– Role in selecting new Speaker21

Republican Leaders Too Connie Conway termed out Caucus members positioning all year

– Chavez, Melendez, Olsen

– Maienschein, Bigelow, Wilk New Republican Caucus Chair

– Scott Wilk – Future leader?

22

Freshmen Class Composition

42 new Assembly members– Democrats 32, Republican Members 10

On top of 30 new members from 2012

This CLASS can serve 12 YEARS

Largest Freshmen class since the 19th century

23

Assembly’s Composition

24

Assembly Make-up by Class and Party

25

2013-14 Senate40 Members Total – 2/3 Threshold is 27*

26*Calderon and Wright are on Leave from the Senate

Key Senate Leaders Departing Leaders:

– President Pro Tempore Darrell Steinberg Friends and Allies

– Alex Padilla

– Lou Correa Less Than….

– Leland Yee

27

Senate Leadership

New Pro Tempore has NOT been selected, yet– Kevin de Leon has been endorsed by Steinberg

Interim Candidate – Mark DeSaulnier – now to Congress

Others in the Wings– Holly Mitchell

– Bob Hertzberg

28

Key Races to Watch:The Fight for Supermajority

Assembly:– Steve Fox (Palmdale)

– Jeff Gorrell* (Camarillo)

– Sharon Quirk-Silva (Fullerton) Senate:

– Anthony Cannella (Ceres)

– Lou Correa* (Santa Ana)

– Andy Vidak (Fresno)

*Open Seat29

Propositions

30

“The ballot initiative process remains one of the strengths of California’s system of government.”

- LA Daily News

Current Potential Ballot Count

Two qualified for June Ballot– Public Records Act for local govt

– Veterans bond restructuring

Four qualified for November Ballot– Rainy Day Fund; from 5% to 10%

– Water Bond; $50 million for CSU

31

Propositions in Process Over 50 in various stages

– 23 initiatives with the Attorney General

– 32 initiatives out for gathering signatures Minimum Wage Proposal

– Increase wage to $12 by 2016 High Quality Teachers Act of 2014

– Termination based on performance not seniority Oil severance, tobacco taxes

– Policy and politics32

Last Year of Session:What Will 2014 Bring?

33

2014 Legislative Introduction Deadline

34

Bill Count – 2013-141st Year 2nd Year Total

Assembly 1585 1343 2928

Senate 955 659 1614

Total 2540 2002 4542

35

Legislative Trends Over Last DecadeSession Assembly Senate Total

2005-2006 3229 2311 5540

2007-2008 3112 2419 5531

2009-2010 3068 2266 5334

2011-2012 2719 2127 4836

2013-2014 2540 2002 4542

36

Issues for Today and Tomorrow

Bonds– $11 billion bond or not?

– Education bond in 2014, 2016?

K-12 Reform Continues– Common Core, Transitional Kindergarten

37

Election Related Issues

Prison Overcrowding– New prison construction v. reforms by 2016

Pension and health care costs– Employer and employee share of cost, benefits

High-Speed Rail– Legacy issue for governor

38

Higher Education Specific

Campus Climate– Sexual assault reporting

– Hate Crimes and overall climate

Community college bachelors degree– Nursing or other applied degrees

Performance measures and accountability– More defined, directive

39

Campus Climate AB 1433 (Gatto) – Reporting of Hate and Sexual

Crimes to Local Jurisdiction

AB 1549 (Rendon) – Requires Sexual Harassment Policy be Posted on Internet

AB 2168 (Campos) – Taskforce Investigation on Discrimination and Violence

SB 967 (deLeon) – “Affirmative Consent” as part of campus investigation of possible sexual assault

40

Financial Aid and Fees AB 1976 (Quirk-Silva) – Expands the new number of

Cal Grants offered to 50,000

AB 2566 (Weber) – Extends the Period of Time you can Apply for Cal Grant by One Year

AB 1456 (Jones-Sawyer) – Pay it Forward Measure

41

Accountability and Oversight AB 1348 (J. Perez) - Postsecondary education:

California Higher Education Authority

SB 1196 (Liu) - Public higher education: state goals

SB 1022 (Huff) - Labor market outcome information

42

Making the Year Count for CSU

43

PPIC Statewide Survey January 2014Key Issues Facing California

44

PPIC Statewide Survey January 2014Preference for State Spending

45

More Money, More Competition

Budget is opportunity and challenge– More money means more demand for support– Election year, political allies, local communities

Competition requires proactive effort– Time to match rhetoric with reality

Engage beyond the university, issue for campaign Make the ask for investment and redesign Hold them accountable

46

CSU as a Good Investment

Up against varying and competing priorities– Harder to seek new money than manage cuts

– Election year shifts focus

CSU must show value as a partner, innovator– What we are doing today, what we are prepared

to do for the future

– Ability to improve, willingness to change

47

Tell the Story CSU is valuable investment because…

– Assist in meeting the workforce gap Local and statewide needs Employers, industry, community leaders

– Value of college degree To state and local economy Employment opportunities, job development

48

Tell the Story

Innovation and efficiencies our way of life– Online teaching and learning– Innovative programs and partnerships

Improvement is a goal– Graduation Initiative

Results to date, future efforts

– Transfer Reform Implementation of SB 1440, other efforts

49

Being Ready to Make the Case

New Chancellor values advocacy– Active partner already

– Expectation of campus leadership focus

Advocacy Plan to guide our work– All university responsibility

– Common goals and objectives, unique campus approaches

50

Summary Budget, elections: challenges and opportunities

– New investment, redesign; not restoration

– Improvement, completion and access

– Role in state’s economy, successful residents

Changes require ongoing advocacy efforts– Competition for revenue

– Last term with governor, more than 65% legislators new

51

Summary

Budget proposal increase funds for CSU

–But falls short of Board request by $95 million Not a money problem, a priority issue

–Stakeholders must make case together Making higher education a real priority

–Our real friends must step up Beyond rhetoric, be held accountable

52

www.calstate.edu

53