News & Commentary

New compacts, historic funding levels: May Revise Budget steers California higher education toward unification

Governor Newsom’s May revise budget, built upon California’s $97.5 billion budget surplus, marks a historic commitment to funding California’s public higher education segments. While the 5% annual base general fund increase for five years to the University of California, California State University, and California Community Colleges systems is significant in and of itself, most notable is the set of multi-year compacts that were developed jointly by the system leaders, the Governor’s Office, and the Legislature.  

Said Monica Lozano, President & CEO of College Futures Foundation, “The multi-year compacts are an exemplar of higher education systems and state leadership planning together for more accessible, equitable, and affordable education for all Californians. It’s a heartening step towards a unified system, which California urgently needs.” 

“The state’s investment in our future workers and leaders is both record-setting and appropriate, given the need, while the systems will be accountable for improving student outcomes, closing equity gaps, and making higher education more affordable,” commented Ria Bhatt, Director of Public Policy for College Futures.  

One of the shared goals in the compacts is to expand access to the UC and CSU by substantially increasing California resident undergraduate enrollment–and ensuring that community college transfer students represent a significant share. Another is to decrease students’ non-tuition costs or increase availability of lower-cost options for housing, food, transportation, and class materials. Performance targets include eliminating equity gaps in graduation rates for students who are low-income or from underrepresented groups. 

The ability to plan longer-term should help the state and its higher education segments protect student access and success through the peaks and valleys associated with California’s boom-bust economy—including volatile socio-economic moments such as those brought on or exacerbated by the pandemic. 

College Futures Foundation has been working for a number of years on higher education finance reform, business modeling, and long-term planning, in conjunction with a set of expert partners. Said Lozano, “One key recommendation from our research is multi-year funding in return for progress on accountability measures to be reported annually. We are glad to see that in the May revise budget.” 

The current budget does not tackle reforms to our system of student financial aid—a top priority of students, advocates, and the Legislature. “California still has work to do to achieve an equitable, robust, and simple college affordability system, particularly as students and families continue to be challenged by the pandemic,” said Bhatt. Adjustments and discussions will continue until the Legislature’s final budget is approved by the Governor in June. 

“Our higher education institutions provide powerful pathways to socio-economic opportunity, but Californians need opportunity on purpose, rather than relying on luck or privilege,” said Lozano. “Shared goals, long-term planning, significant state investment, and performance-based institutional outcomes will enable California to achieve equitable opportunity for students by design,” said Lozano.