2014: A Year of Recovery and Opportunities CSU Business Conference March 12, 2014 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 2014 Satisfaction with Governor Candidates* *Poll was taken prior to Kashkari announcing 14 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 Assembly 80 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 Speaker 21 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 Senate 40 Members Total – 2/3 Threshold is 27* *Calderon and Wright are on Leave from the Senate 26 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 Seat 29 Propositions “The ballot initiative process remains one of the strengths of California’s system of government.” - LA Daily News 30 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 politics 32 Last Year of Session: What Will 2014 Bring? 33 2014 Legislative Introduction Deadline 34 Bill Count – 2013-14 1st Year 2nd Year Total Assembly 1585 1343 2928 Senate 955 659 1614 Total 2540 2002 4542 35 Legislative Trends Over Last Decade Session 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 2014 Key Issues Facing California 44 PPIC Statewide Survey January 2014 Preference 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