The Master Plan at 50: Greater Than the Sum of Its Parts--Coordinating Higher Education in California

The Master Plan at 50: Greater Than the Sum of Its Parts— Coordinating Higher Education in California M AC TAY LO R • L E G I S L A T I V E A N A L Y S T • J A N U A R Y 2 010 AN LAO REPORT CONTENTS Executive Summary ............................................................................. 3 Introduction ......................................................................................... 5 Coordination—Who Needs It? ............................................................. 5 The Whole Can Be Greater—or Less—Than the Sum of Its Parts ....................6 The Actions of the Segments Are Interdependent ...........................................7 Institutional Interests Can Compete With Public Interests ..............................7 Balancing Coordination and Autonomy ........................................................9 Coordination in California: A Checkered History .............................. 10 Master Plan Reflects Postwar Vision of Higher Education Leaders ............................................................10 Passive Coordination Worked Well in Capacity-Building Phase ...................10 Effectiveness Declined as Enrollment Leveled Off .......................................11 Attempts to Improve Coordination ..............................................................13 LAO Assessment of Coordination Issues Today ................................. 15 California Lacks Statewide Goals for Higher Education ...............................15 Coordination Mechanisms Are Inadequate ..................................................16 California Lacks Effective Statewide Policy Leadership ...............................20 How Better Coordination Could Improve Outcomes: Lessons From Other States ............................................................... 21 Policy Leadership in Illinois ........................................................................22 Accountability for Results in Texas ..............................................................23 Performance-Based Funding in Ohio ...........................................................23 Driving Improvement With Data in Florida and Washington .......................25 Recommendations ............................................................................. 28 Set a Clear Public Agenda for Higher Education ..........................................29 Strengthen Coordination Mechanisms .........................................................30 Rebuild State’s Capacity for Policy Leadership .............................................32 Conclusion ......................................................................................... 35 2 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT EXECUTIVE SUMMARY Coordination Mechanisms Inadequate. Coordination is necessary to guide public higher educational institutions toward collectively meeting state needs. Coordination does not always require active direction by a state agency. Instead, it can work less directly through incentives, funding models, accountability systems, and other mechanisms. California’s approach to coordination over the past 50 years has been indirect, resting mostly on well-defined missions and eligibility pools to guide the development of higher educa- tion institutions. This approach worked well during several decades of expansion, producing arguably the greatest higher education system in the world. The effectiveness of this approach has declined over the last quarter century, however, and institutions have been left to pursue their separate interests with insufficient mechanisms to advance the state’s priorities. This decline in the effectiveness of coordination has resulted in suboptimal outcomes for the state. For example: ➢ Public universities have expanded programs that are not high priorities for the state while restricting undergraduate enrollment. ➢ Students experience ongoing difficulties transferring from two-year to four-year colleges. ➢ There is increased duplication of programs across segments, and evidence of growing institutional, local, and regional political influence at the expense of statewide planning. At the same time, California is experiencing multiple budgetary, demographic, and econom- ic challenges. These include a leveling off in the number of traditional college-age residents, an increase in the proportion of residents from groups that have historically been underrepre- sented in higher education, and a growing demand for educated and skilled workers. California has seen protracted budget crises in recent years, and the fiscal outlook remains poor, with a persistent structural deficit. LAO Recommendations These challenges underscore the importance of aligning the performance of the state’s higher education system with the state’s needs. Several states provide valuable examples of effective coordination leading to improved outcomes for students and states. Drawing on some of these examples, we recommend several legislative actions to improve coordination of higher education in California: ➢ Adopt a clear public agenda for higher education, with specific statewide goals that can serve as the framework for an accountability system designed to align higher education performance with the state’s needs. LEGISLATIVE ANALYST’S OFFICE 3 AN LAO REPORT ➢ Strengthen several critical mechanisms of coordination, including funding formulas, delineated missions, eligibility standards and enrollment pools for each segment, articu- lation and transfer mechanisms, approval processes for new programs and sites, and accountability mechanisms. ➢ Reform the California Postsecondary Education Commission or replace it with a new coordinating body to help create higher education policy leadership for California. We believe these strategies would enhance the Legislature’s ability to target resources in ways that would improve the higher education system’s performance in meeting the state’s educational and workforce needs. 4 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT INTRODUCTION The 1960 Master Plan for Higher Education As the state approaches the 50-year anni- in California, which launched a major restructur- versary of the Master Plan, dissatisfaction with ing and expansion of the state’s higher education coordination of California’s higher education system, has served as a model for other states system is evident. In the past few legislative ses- and countries. The plan’s promise of universal sions, lawmakers have sought to address persis- access to quality postsecondary educational op- tent problems in course articulation and student portunities at every level—certificates, associate transfer across institutions, reduce the need for degrees, baccalaureate degrees, and beyond— remediation at the college level, alter the balance and its plan for accommodating enrollment of functions established by the Master Plan, set demand through an integrated system of differen- state goals for higher education, create a state- tiated public and private institutions were vision- wide accountability framework, and eliminate ary in the mid-twentieth century. the existing higher education coordinating body. The Legislature’s first comprehensive review These efforts highlight frustration with the pres- of the Master Plan in 1973, however, revealed ent condition of statewide coordination, and lack concern about poor coordination and plan- of confidence in the ability of current mecha- ning across California’s educational system. The nisms to address problems effectively. At the report of the Joint Committee on the Master Plan same time, they indicate recognition of the need described “a system dominated by segmental for systemwide planning and problem solving, rivalries and poor planning and coordination,” important components of effective coordination. and made a case for improvement. Later reviews This report examines the need for a system- arrived at similar conclusions. Although the wide approach to planning and coordination Legislature has taken various steps to strengthen of California’s system of higher education, and coordination of the higher education system, proposes strategies for improvement. coordination problems have persisted. COORDINATION—WHO NEEDS IT? Higher Education Coordination Defined ➢ Advising on Resource Allocation—advis- ing policymakers on mission differentia- Higher education coordination involves tion, program development, campus structures and processes that guide public and development, and budgeting. private educational institutions toward collective- ly meeting state needs and realizing state goals. ➢ Data Collection and Analysis—assessing There are many possible coordination functions: system performance in meeting state goals, ➢ Planning—monitoring demographic and and recommending policy solutions. economic trends, advising state policy- ➢ Collaboration and Innovation—promot- makers on how to respond, and articulat- ing articulation and transfer functions, ing state goals and objectives. LEGISLATIVE ANALYST’S OFFICE 5 AN LAO REPORT outreach, and college readiness efforts; T W C B G — he hole an e reaTer supporting efforts to improve outcomes o l —T s I P r ess han The um of Ts arTs including productivity, student learning, A coordinated approach can help policy- and success of underrepresented groups; makers consider the higher education system as advancing partnerships with business, a whole, and develop policies and budgets that industry, and other constituencies; and maximize the system’s value to the state. If the providing incentives for intersegmental segments’ activities are complementary and they collaboration. (Course articulation is the operate as an integrated system in which each formal recognition of specified courses at part adds value that is unique to its role, then one institution to meet equivalent course their combined efforts may add up to more than and program requirements at another what the institutions could achieve independently. institution.) Examples include: Coordination Mechanisms. These functions ➢ A Smooth Intersegmental Pathway to can be met through active or passive mechanisms. Obtaining a Baccalaureate Degree— ➢ Coordinating body, either advisory or robust preparation of students in the K-12 regulatory. system, a solid base of general educa- tion and major preparation courses in ➢ Budget process through which executive community college, and focused upper- and legislative branches allocate resources. division coursework at senior institutions. ➢ Legislative action to establish and/or fund Each segment performs its mission effec- tively, minimizing the need for overlap. new campuses and programs. ➢ Legislative action to address specific ➢ Regional Planning—considering the educational needs in a region of the state problems and issues. and identifying how the community col- ➢ Contracts or other agreements between leges, public university campuses, and the state and institutions. private colleges and career schools in the region will contribute to meeting these ➢ Structural provisions in statute or the needs. California Constitution specifying gov- ernance and missions of institutions and ➢ Joint Degrees—combining the strengths agencies. of more than one university without du- plicating programs. ➢ Funding formulas and policies with intrin- sic incentives and disincentives. In contrast, if there is significant overlap of mission, duplication of effort, or lack of cur- ➢ Existing statutes and regulations govern- ricular alignment across segments, their com- ing operation of colleges and universities. bined efforts will be less valuable—and more expensive—to the state. Some evidence of this includes: 6 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT ➢ Remedial courses required for students ties. In July 2009, CSU cancelled its spring 2010 unprepared for college-level work due to admissions cycle, delaying the enrollment of lack of alignment between high school many transfer-eligible community college stu- curricula and college expectations. dents for a semester or more. Many of these students will remain at community colleges, ➢ Excess course units resulting from incon- taking excess courses for which they may not sistent course articulation between com- receive degree credit. More recently, San Di- munity colleges and universities, or lack ego State University announced its intention to of effective academic advising. increase the proportion of enrollment of out-of- area students in fall 2010, at the expense of local ➢ Competition for specialized faculty admissions. This decision has created new work among duplicative programs. for San Diego-area high school counselors and ➢ Building new capacity in one part of the community college personnel, as they identify system while facilities are underutilized in options for students who had expected to attend another part. San Diego State. In another example, the UC Regents’ recent ➢ Separate data and accountability systems decision to redefine its freshman eligibility pool that do not allow policymakers to aggre- will have ramifications for CSU. Instead of ac- gate results. cepting students from the top one-eighth of high school graduates based on grades and standard- T a s he CTIons of The eGmenTs ized test scores, the new eligibility framework al- a I re nTerdePendenT lows UC campuses to draw students from an en- Decisions at the individual higher education rollment pool almost twice as large. As a result, segments—and individual campuses within those UC may be able to draw in some of the students segments—can directly affect the other segments who under current rules would have only been and their campuses. For example, the universi- eligible for CSU. This could alter CSU’s student ties’ transfer and major requirements, and their body, and could make it more difficult for CSU approval or disapproval of courses for univer- campuses to gauge how many students will ac- sity credit toward general education and major cept their offers of admission. requirements, have a direct impact on instruction I I C C (and counseling) at the community colleges. nsTITuTIonal nTeresTs an omPeTe W P I Student admissions policies provide another ITh uBlIC nTeresTs clear example. In the 2009-10 application cycle, Institutional Aspirations. Institutions’ gov- the University of California (UC) and California erning boards and administrators have fiduciary State University (CSU) attempted to hold steady responsibility to their own institutions. They are or reduce enrollment at their campuses. The charged with maintaining and strengthening their California Community Colleges (CCC) reported respective systems, and naturally seek to increase record enrollment demand, which they attributed their prestige and ranking among peer institu- in part to enrollment restrictions at the universi- tions. However, the measures they may use, LEGISLATIVE ANALYST’S OFFICE 7 AN LAO REPORT such as the U.S. News and World Report college institutions must find ways to reconcile the priori- rankings and National Institutes of Health rank- ties of their internal constituencies. ing by research expenditures, do not necessarily External Influences. Constituencies outside align with the state’s interests. They may lead an higher education also seek to influence deci- institution to compete with private universities for sions about higher education policy and bud- star researchers; to expand its research and grad- gets. In fact, one of the primary motivations for uate programs at the expense of undergraduate developing the 1960 Master Plan, in the words instruction; to become overly selective in student of an early legislative review, was to manage the admissions; or to add law and other professional “almost uncontrolled aspirations and proposals programs in an effort to heighten prestige and of local communities for local public campuses.” develop a strong alumni base—whether or not For example, a 1955 Senate bill that initially these activities are state priorities. proposed one new four-year campus eventually These kinds of activities become problem- grew to include 19 new campuses as it worked atic when there is poor alignment between the its way through committees and the full Senate. broader interests of the state and narrower insti- By laying out a plan for deliberate expansion of tutional interests. For example, policymakers and colleges and universities through 1975 based on analysts acknowledge the need for a larger pro- documented needs by region, the Master Plan portion of the population to attain two-year and succeeded in stemming a flood of bills to estab- four-year degrees to support the state’s economy. lish new campuses. Yet, the universities currently are expanding Once the initial expansion mapped out in graduate programs while attempting to restrain the Master Plan was complete, however, local enrollment in undergraduate programs. New political influences again overtook careful needs graduate and professional schools of medicine, analysis in some major policy decisions such as law, nursing, public policy, and global health are where to locate new campuses. A recent re- currently underway or in the planning stages. port from the National Center for Public Policy This is one reason external mechanisms are and Higher Education cites the establishment of needed—to steer institutions away from particu- CSU Monterey Bay in 1994 and UC Merced in lar actions that diverge from the public interest. 1999 as examples. Both campuses were built Internal Constituencies. A related problem is in sparsely populated areas, far from the urban that the priorities and values of some subgroups and suburban centers where projected growth within higher education may conflict with those of of high school graduates was concentrated. the institutions and the state. For example, faculty Both are struggling to attract students several control of the curriculum at the individual depart- years after opening. Nearly half of their capacity ment level is a strong value in higher education remains unused, while campuses in other areas that is sometimes at odds with efforts to establish of the state are restricting admissions to reduce clear and broadly applicable transfer pathways overcrowding and bring enrollment in line with between two-year and four-year colleges. Just as budgets. The National Center report attributes the state seeks to develop mechanisms to align the shift away from policy-driven growth, and institutional priorities with those of the state, the toward local and regional political influence, to 8 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT the vacuum created by the absence of effective a large extent, CSU enjoy, employ accountability statewide planning. systems to ensure that their universities act in the These illustrations underscore the potential best interests of the state. value of higher education coordination for the A prime example is Virginia, which in 2005 state. In its absence, there is greater likelihood of enacted an explicit quid pro quo—the state duplication and other inefficiencies, segmental granted institutions actions with unintended consequences for other greater autonomy in segments, and the subordination of the state’s exchange for institu- ❝...without effec- priorities to those of institutions and special inter- tional commitments ests. More importantly, without effective coordi- to meeting state tive coordination, nation, it is unlikely that the state’s higher educa- goals, articulated in it is unlikely that tion needs will be met by the collective efforts of legislation. The leg- the state’s higher its public and private institutions. islation established a robust account- education needs B C alanCInG oordInaTIon ability system and will be met by the a a nd uTonomy directed that institu- collective efforts of State-level planning and coordination, by tions failing to meet its public and pri- definition, reduces the autonomy of individual specified targets higher education institutions and segments. Too would lose the vate institutions.❞ much regulatory control can tie the hands of expanded autonomy higher education leaders and hamper their ability and other benefits. to respond to changing circumstances, ultimately The initiative has harming the quality, efficiency, and integrity of begun to show the academic enterprise. Insufficient state influ- results, most notably in the number of transfers ence, on the other hand, can result in ineffi- from community colleges to four-year institu- ciency and lack of alignment with state interests. tions, which doubled from 2005-06 to 2009-10. A key question for policymakers is: What is the California’s approach has been different for right balance between institutional autonomy each higher education segment. The state has and state-level planning and coordination? granted considerable autonomy to UC, and al- Some states are moving away from regulatory lows the CSU limited autonomy. The community processes, such as program approval, in favor of colleges are locally governed, but subject to more outcome-based accountability systems. In these state regulatory and budget control than the uni- cases, institutions are held responsible for meet- versities. In most cases, however, the state has not ing state goals—such as increasing the number required institutions to meet specified state goals. of graduates in high-priority disciplines and con- In the next section, we review California’s taining costs per degree—and are given the flex- efforts to balance coordination with institutional ibility to determine how best to meet those goals. autonomy, from the Master Plan to the present, More broadly, many states that give public higher and assess the current condition of higher educa- education the level of autonomy that UC and, to tion coordination in the state. LEGISLATIVE ANALYST’S OFFICE 9 AN LAO REPORT COORDINATION IN CALIFORNIA: A CHECKERED HISTORY m P r P formal authority. As originally recommended, asTer lan efleCTs osTWar V h e l the Coordinating Council was to be composed IsIon of IGher duCaTIon eaders exclusively of representatives from the higher Master Plan Provisions. The Master Plan was education segments—three each from the junior negotiated primarily among higher education (community) colleges, state colleges, UC, and in- leaders, who sought to preserve their autonomy dependent institutions. The Donohoe Act added at a time of growing public concerns about to the council three public members appointed higher education. Clark Kerr, who as president of by the Governor, and subsequent legislation UC served as one of the chief negotiators, noted added more public representatives appointed by publicly that “we had to agree upon some system the Legislature. The Council was charged with of coordination, because we not only wanted to advising the Governor and Legislature on higher have our own plan, we also wanted to keep it education operating budget and capital outlay within our control.” In his memoirs, he described requests, interpreting functional differentiation the development of the plan as, among other among institutions, developing plans for the things, an attempt to escape state legislative orderly growth of higher education, and making domination. By developing an acceptable plan to recommendations to the institutions’ govern- coordinate themselves, higher education leaders ing boards on the need for and location of new avoided the creation of a strong, active coordi- facilities and programs. The Donohoe Act stated nating body and greater legislative and executive the Legislature’s intent that no new state college branch oversight. or university campuses would be authorized In addition to establishing several core prin- without the Council’s recommendation. ciples and policies for California higher educa- In effect, the Master Plan promoted coor- tion, the Master Plan established structures and dination primarily through passive mechanisms processes to guide the future development of rather than through regulatory oversight. It relied higher education policy. It included specific rec- on the design of the system—including strict ommendations about the structure, mission, and mission differentiation and defined eligibility eligibility pool for each public segment, and laid pools—to prevent direct competition for stu- out a plan for expansion of campuses. (Please dents, minimize duplication of effort, preserve see our November 2009 publication, The Mas- the quality of research and graduate programs, ter Plan at 50: Assessing California’s Vision for and encourage efficient allocation of resources to Higher Education, for a summary of the Master meet state needs. Plan report and the 1960 Donahoe Act that codi- fied several of its recommendations.) P C W assIVe oordInaTIon orked Coordination in the Master Plan. The Master W C -B P ell In aPaCITy uIldInG hase Plan also called for creating a Coordinating The passive coordination set in motion by Council with primarily an advisory role and little the Master Plan functioned well initially. A 1966 10 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT report from the Coordinating Council, The Mas- ➢ Insufficient Statewide Planning. The ter Plan Five Years Later, reviewed the status of Joint Committee’s study noted a need implementation of each of the Master Plan’s 67 for improved planning at the state level recommendations and found that, overall, imple- as the basis for all other coordination mentation had progressed successfully. It noted efforts. According to the report: “After that the participation of all the segments on the more than a decade under the celebrated Coordinating Council, along with strong public Master Plan, California has no compre- representation, had produced workable solutions hensive state plan, no statewide planning to higher education’s problems. process, and no comprehensive infor- In the ensuing decades, California’s public mation system to provide policymakers colleges and universities provided high quality with accurate and comparable data on education at a relatively low cost, while absorb- programs, costs and flow of students.” ing enrollment growth far greater than originally The report attributed the council’s inef- projected. The community colleges provided fectiveness primarily to its composition— broad access to higher education throughout namely its domination by the segments. the state; the state college system grew into the ➢ Dominance by Segments Over State Pol- largest multicampus baccalaureate and master’s icy. The absence of statewide planning degree-granting institution in the world; and UC had left the growth and development of maintained its preeminence as a research and higher education largely in the hands of doctoral institution. The California Master Plan the segments. Planning at the segments, and the resulting system of higher education according to the report, was primarily became models studied and emulated around concerned with the interests and aspira- the world. tions of each segment, rather than how e ffeCTIVeness d eClIned as each segment could best contribute to e nrollmenT l eVeled o ff meeting the needs of the state. The Joint Committee found that the strict mission In the early 1970s, periodic reviews of the differentiation articulated in the Master implementation of the Master Plan began to Plan had allowed the segments to protect document difficulties with the coordination func- their individual functions at the expense tion. Many of the concerns raised in these early of the overall system. The report also crit- studies persist today. icized uniform treatment of all campuses Poor Coordination Cited in Early 1970s within a segment, noting that diversifica- tion within segments could promote a In 1971, the Legislature established a Joint more effective allocation of resources. It Committee on the Master Plan for Higher Edu- did not make sense, the report argued, cation, which conducted a wide-ranging study for every new UC campus to model itself of the present and future of higher education in on the most prestigious ones. California. Among other things, the report identi- fied two major concerns with coordination: LEGISLATIVE ANALYST’S OFFICE 11 AN LAO REPORT Regional planning was also nearly nonexis- segments to submit certain information, and to tent, according to the report. The Joint Commit- advise the Legislature and Governor on issues tee made the case for campuses to be responsive related to governance, operation, and financing to local needs, and segments to cooperate within of higher education. each region. It recommended the creation of Concerns Echoed Over regional councils throughout the state, composed Next Three Decades of community representatives and representa- tives of each institution within the region. The The replacement of the Coordinating Coun- councils would: assess demand for postsecond- cil with the new CPEC did not resolve all of the ary education in each region and survey the problems identified by the Joint Committee, and availability of public and private resources to created some new weaknesses in intersegmental meet that demand; find methods for effectively coordination. Legislative studies of the Master utilizing or increasing educational resources; Plan in 1987, 1989, and 2002; a white paper and encourage the development of policies and commissioned by the Legislature in 2003; and procedures for cross-registration of students and a series of Assembly hearings in 2005 shared sharing of faculty and facilities. many common themes. Some of the key findings Creation of CPEC. Based on its assessment regarding statewide coordination are summarized of higher education, the Joint Committee rec- below. ommended replacing the Coordinating Council Broad and Incompatible Roles for CPEC. with a commission that would have an expanded Many studies have called for clarifying, prioritiz- statewide planning function and a majority of ing or paring down the multiple duties assigned public members. The Joint Committee’s report to CPEC, and matching its responsibilities to its emphasized that the effectiveness of a coordinat- resources. Additionally, several have identified ing body depends upon the quality of its advice an intrinsic conflict between CPEC’s coordination rather than its power to govern. It acknowledged, and advocacy responsibilities, and its role as an however, that coordination requires mechanisms independent fiscal and policy watchdog. that constrain institutional actions that would be Inadequate Planning. Although CPEC was inconsistent with the interests of overall state pol- given a stronger planning mandate in 1973, later icy. The report cautioned that, if a coordinating studies reported that important public policy de- body does not effectively carry out its responsi- cisions were still being made on an ad hoc basis. bilities, it creates a gap that must be filled by the The reports cited selection of new campus sites, Governor and Legislature. patterns of growth in enrollment, and develop- In response to the report, the Legislature ment of new instructional programs as examples reconstituted the Coordinating Council as the of decision made without systematic planning. California Postsecondary Education Commission The CPEC’s planning efforts were hampered by (CPEC) in 1973, with increased responsibility the absence of clear state goals for higher educa- for planning and a majority of public members. tion, and by lack of formal authority to approve The new CPEC was granted modest additional long range plans and capital outlay requests, authority, including the ability to require the conduct economic and workforce planning, con- 12 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT trol costs, and ensure segmental accountability. adding courses in recreation and leisure activities, The CPEC also lacked adequate student tracking continuing education, workforce preparation, and data to conduct rigorous evaluation, research, remedial education—further diluting their transfer and policy analysis. functions. The passage of Proposition 13 in 1978 Mission Creep. Studies also identified a need resulted in funding reductions, and the colleges to revisit the missions of the public higher educa- responded by reducing course offerings, counsel- tion segments. Over the decades following ap- ing, and testing services. proval of the Master Plan, for example, tensions By the mid-1980s, the transfer pathway to the emerged among the segments regarding the baccalaureate had diminished measurably. The scope of research at CSU, expanded demand for majority of students who enroll in community functions other than baccalaureate transfer (such colleges with apparent intent to transfer to a bac- as remediation, English language instruction, and calaureate institution do not succeed in doing so. workforce preparation) at the community col- There is no consensus about how to measure in- leges, and evolving graduate education require- tent to transfer. Studies have used students’ stated ments in practical fields such as education and intentions on enrollment forms or their course- nursing. taking patterns as proxies for intent to transfer. Atrophy of Transfer Function. Perhaps the Most studies have found low transfer rates for most consistent theme in studies from the 1970s these students. One study from the Public Policy through the mid-2000s is a decline in transfers Institute of California and another from the CSU from the community colleges to the public uni- Institute for Higher Education Leadership and versities. The community colleges developed and Policy pegged the transfer rate at 26 percent, maintained strong transfer programs from 1960 and a CPEC study found that about 22 percent of to 1975. Many students who were eligible for di- students who took transferable courses for credit rect entry to UC and CSU, as well as those who eventually transferred to a CSU or UC campus. did not meet university eligibility criteria, chose Need for Comprehensive Data System. As to enroll in community colleges. This enabled early as the 1971 Joint Committee report, reviews the universities to achieve the Master Plan target of California’s higher education system have la- that at least 60 percent of undergraduate students mented the lack of a comprehensive information at the four-year institutions have upper division system with program, cost, and student data. Re- (junior and senior) status. ports have highlighted the need for accurate and When the number of high school graduates comparable data to improve the state’s capacity leveled off and then declined in the late 1970s, for policy analysis, inform budget decisions, and the universities were faced with declining overall strengthen accountability. enrollment and revenues. To increase enrollment, a I C TTemPTs To mProVe oordInaTIon they began to attract more high school gradu- ates directly as freshmen. This resulted in lower The Education Round Table. In response to enrollment and fewer resources at the community early concerns about intersegmental coopera- colleges. Partly in response, many community tion under the reconstituted CPEC, the segments colleges sought to attract more students—by formed in 1979 a voluntary association, the LEGISLATIVE ANALYST’S OFFICE 13 AN LAO REPORT California Education Round Table, which remains tium’s control, but this achievement illustrates in existence today. The Round Table includes the the potential for regional collaboration. Like Superintendent of Public Instruction, the chief ex- the Round Table efforts, however, the regional ecutives of each of the public segments, the chair consortia offer voluntary collaboration on mutual of the Association of Independent California Col- interests, rather than true coordination in the leges and Universities, and the director of CPEC. broader interests of the state or region. A staff arm, the Intersegmental Coordinating Recent CPEC Reform Efforts. Since 2002, Committee, supports the Round Table members at least a dozen bills have sought to eliminate to improve operational linkages across the seg- CPEC or restructure it by replacing or chang- ments. As might be expected, the Round Table ing the membership of the commission, altering takes on issues upon which all of its members the appointment process for commissioners, agree, and avoids those on which there is sub- and modifying the commission’s responsibili- stantive disagreement among the sectors. ties. Governor Gray Davis’ May Revision budget Regional Collaboratives. In several regions proposal for 2002-03 sought to eliminate nearly of the state, educational leaders have formed all funding for CPEC. In 2005, Governor Arnold voluntary organizations to advance common in- Schwarzenegger supported a California Perfor- terests related to student preparation, enrollment, mance Review (CPR) proposal to eliminate CPEC and achievement. The Education Round Table and merge its functions into an executive office. conducted a survey of these efforts in 2007, and In 2008, Senate amendments to the proposed identified more than two dozen regional higher budget would have begun a phase-out of the education consortia with participation from organization over three years, but the amend- multiple educational segments and community ments were rejected in conference committee. partners. Some have overlapping membership. More recently, the Governor’s 2009-10 budget There are five different organizations, for ex- proposal echoed the 2005 CPR recommenda- ample, serving the Central Valley, with some- tion to eliminate CPEC and transfer its functions what different geographic or topical emphases. into the executive branch. Lack of consensus on Many of the consortia were started with federal, these proposals has prevented any fundamental state, or private grant funds. The Round Table changes to CPEC, while repeated budget re- survey documented significant improvements in ductions—totaling more than 60 percent of its educational outcomes from these efforts, such General Fund budget since 2001-02 adjusted as increases in college-going rates, university eli- for inflation—have further eroded its capacity. gibility, financial aid eligibility, and reductions in For 2009-10, CPEC has an operations budget of the proportion of students needing remediation $2.2 million ($1.8 million from the General Fund) at the college level. One consortium negotiated a and 20.8 personnel-years. transfer associates degree that would be awarded Articulation and Transfer. The Legislature by 12 community colleges and accepted for full attempted to improve articulation and transfer lower division credit by 13 public and private processes in 2004 with the approval of colleges and universities. The degree was not (1) Chapter 737, Statutes of 2004 (SB 1415, implemented for reasons outside of the consor- Brulte), aimed at establishing a common course 14 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT numbering system across all higher education work on statewide transfer patterns. The heads segments, and (2) Chapter 743, Statutes of 2004 of the three public higher education segments (SB 1785, Scott), requiring CSU to establish convened a task force in 2009 to increase the statewide and campus-specific course require- number of community college students transfer- ments for transfer students in the largest majors. ring to the universities, but the task force’s pre- The common course numbering system has been liminary report, citing limited resources, recom- abandoned, and CSU recently suspended new mends very modest efforts in the short term. LAO ASSESSMENT OF COORDINATION ISSUES TODAY Systemic problems identified in report after higher education, but does not provide specific report over the last four decades—lack of state- goals that can form the basis of a statewide pub- wide planning, poor articulation of courses lic agenda. Several bills, including most recently among institutions, low com- Senate Bill 1331 (Alpert) in munity college transfer rates, 2004, Senate Bill 325 (Scott) in lack of comprehensive data for 2007, Assembly Bill 218 (Por- ❝...It is no wonder planning and accountability, tantino) in 2009, and Senate Bill mission creep, and concerns then that Califor- 775 (Liu) in 2009 have sought about the effectiveness of the to establish state goals, objec- nia’s higher edu- coordinating body—persist to- tives, and targets for higher cation segments day. In addition, there is grow- education, but to date, no such ing concern about poor degree pursue their own legislation has been enacted. completion rates, particularly No Basis for Statewide goals and objec- in the context of recent reports Planning and Resource Al- tives. The absence projecting a shortage of college location. Goal setting at the graduates for California’s work- of statewide goals state level is a necessary first force. This section provides our creates a vacuum step for coordinated efforts to assessment of structural and address problems and improve for the institutions policy barriers to overcoming outcomes in the state’s higher to fill. ❞ these problems and improving education system. Goals guide higher education coordination program and policy choices, in California. and decisions about resource allocation. In years of budget C l s alIfornIa aCks TaTeWIde growth, they influence how new funds are in- G h e oals for IGher duCaTIon vested. In years of budget contraction, they influ- No Specific Goals. The Master Plan estab- ence which programs are protected, and which lished several principles and broad goals for may be reduced or eliminated. In the absence of LEGISLATIVE ANALYST’S OFFICE 15 AN LAO REPORT state goals, these decisions are made by institu- entering the state minus number leaving tions, based on their priorities. Such has been the state each year). the case in California over the last decade, when While the higher education system is not di- funding increases rectly responsible for performance on all of these for higher education goals, they provide the broader context for the ❝...California, have been (with few system’s contributions. exceptions) broad which set the gold No Foundation for Accountability. Goal set- and general, and ting is also a necessary precursor for a meaning- standard for higher budget reductions ful system of accountability for higher education. education plan- have been almost In our discussion of coordination mechanisms entirely unallocat- ning in 1960, following this section, we address the state’s lack ed—leaving it to the of accountability measures. Statewide goals are now stands alone institutions to deter- at the center of any state accountability system among sizeable mine how to spend for higher education. The performance mea- or absorb them. It is states in its lack of sures, performance targets, incentives, and policy no wonder then that responses that are part of most accountability established goals, California’s higher systems are all derived from the state’s specific a statewide plan, education segments goals. pursue their own and an account- California, which set the gold standard for goals and objec- higher education planning in 1960, now stands ability system for tives. The absence alone among sizeable states in its lack of estab- higher education.❞ of statewide goals lished goals, a statewide plan, and an account- creates a vacuum for ability system for higher education. the institutions to fill. Nearly all states have adopted specific state- C oordInaTIon m eChanIsms wide goals for their higher education systems, a re I nadequaTe and most have developed strategic plans based As discussed below, California’s tools for co- on these goals. For example, Ohio’s strategic ordination, including passive mechanisms (such plan sets three goals to improve the state’s edu- as the mission and eligibility pool definitions for cational attainment: the segments, funding formulas, and other state- ➢ Graduate more students (measured by wide policies) and active ones (such as approval total degrees awarded). processes for new programs and facilities, state resource allocation methods, and CPEC itself), ➢ Keep graduates in Ohio (measured by are inadequate to achieve effective coordination percent of graduates living in Ohio three of higher education. years after graduation). Mission Differentiation Has Deteriorated ➢ Attract more talent to Ohio (measured by number of degree holders age 22-64 Differentiation of functions is the primary instrument in the Master Plan for restricting un- 16 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT necessary duplication among the higher educa- authority to offer doctoral degrees in nursing in tion segments. In recent years, the three public response to the AACN action, and has asserted segments have expanded their functions, result- a need for professional doctorates in audiology ing in greater overlap among them. In some and physical therapy. Likewise, some community cases, they were able to act unilaterally because colleges have sought authority to offer baccalau- of weak coordinating mechanisms. In other reate degrees. At the other end of the spectrum, cases, they secured approval from the Legislature some community colleges are offering high and Governor, even though their actions appear school credentials for students who did not pass to breach this core Master Plan principle. the high school exit exam Some of the expansion efforts have been As discussed earlier, the development of a driven by external parties. For example, the new UC campus at Merced, using primarily a American Association of Colleges of Nursing regional rationale, is another example of mission (AACN) has acted to move the current level of creep. The CSU system has traditionally served preparation necessary for advanced nursing prac- regional needs, whereas UC campuses have tice from the master’s degree to the doctorate drawn students from across the state. level by 2015, and the CSU has responded by A longtime CSU campus president and seeking authority to offer a doctorate in nursing. historian of the CSU Independent Actions of Segments. In 2009, system has observed UC unilaterally changed its admissions policy, that “The concept ❝...the segments’ which simultaneously shrank the pool of high of differentiation of recent activities are school graduates who are guaranteed eligibility functions is what nudging Califor- to the university and greatly expanded the pool makes California of students who are considered for admission. public higher edu- nia’s system away One result of this change is that UC’s eligibility cation a cohesive from cohesiveness pool is less well defined, and has greater overlap whole rather than a and toward pur- with CSU’s eligibility pool. heterogeneous mix- The segments can also make more subtle ture of institutions suit of institutional policy changes without legislative approval. In pursuing a variety of aims.❞ response to budget reductions in 2008-09 and goals and wishes.” 2009-10, the universities reduced freshman To the extent this is enrollment. In doing so, they altered the balance true, the segments’ of undergraduate and graduate students in the recent activities are nudging California’s system public universities, with no explicit public discus- away from cohesiveness and toward pursuit of sion of the policy implications. institutional aims. Actions With State Approval. In 2005, the Funding Mechanisms Not Legislature granted CSU’s request for authority Linked to Priorities to offer doctoral degrees in education—arguably blurring, rather than reaffirming, strict mission The allocation of discretionary funds is one differentiation. As noted above, CSU is seeking of the key ways the state expresses priorities LEGISLATIVE ANALYST’S OFFICE 17 AN LAO REPORT among programs and services. Within a given their systems. Likewise, CCC’s local governance service, such as higher education, funding can structure diminishes direct state involvement in also create incentives to align institutional perfor- college decision making. All three segments, mance with state needs. however, continue to receive the majority of their Funding Has Been Driven by Governors. core instructional funding from the state. As a Over the past two decades, most incremental result, the budget remains a potentially powerful funding for California’s universities has largely tool for state policymakers in higher education. been driven by Governor’s proposals based on In our view, the state has failed to use this tool compacts or agreements between the universities effectively. and governors. Under these agreements, the Gov- A 2007 study by the CSU Institute for ernor promised to seek a speci- Higher Education Leadership fied level of funding in exchange and Policy documented the for the segments’ commitment extent to which some state ❝...Because the to specified goals. Although the policies inadvertently create Legislature did not endorse these state rewards en- barriers to student success. For agreements, it often approved example, enrollment-based rollment instead the amount of funding proposed funding encourages campuses of completion, it is by the Governor. We see four to maximize enrollment, even main shortcomings to this ap- not surprising the if students are unprepared for proach: (1) the compacts have enrollment levels courses and have little chance not involved the Legislature, and of succeeding. Because the are much higher as a result have lacked broad state rewards enrollment in- than course com- commitment and continuity, stead of completion, it is not (2) funding has supported the pletion or program surprising the enrollment levels status quo through base in- are much higher than course completion lev- creases and enrollment funding, completion or program comple- els.❞ instead of desired practices or tion levels. outcomes, (3) it has not been a Furthermore, California comprehensive approach, as it continues to provide enrollment excluded the community col- funding based on an overall leges, which enroll the majority of postsecondary marginal cost rate at the universities, not distin- students in the state, and (4) it has not included guishing between high- and low-cost programs, any meaningful accountability mechanism. or, more importantly, high- and low-priority Furthermore, the compacts have been quickly programs. (In recent years, the state has failed abandoned in times of fiscal stress, in favor of to provide enrollment funding altogether due to unallocated budget reductions. budget shortfalls.) Other states have developed Funding Policies Not Used Effectively. sophisticated funding formulas based on the Over the years, the state has granted consider- documented costs of various types of instruc- able autonomy to UC and CSU in operating tional programs and students, and provided 18 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT well-targeted funding to support state priorities. California has adopted several laws in at- In addition, several states are employing perfor- tempts to streamline the transfer process over mance-based funding to motivate institutions to the past 20 years. These have required or re- achieve desired outcomes, such as successful quested the segments (including the private program completion, rather than inputs, such as institutions) to make transfer a central priority, enrollment. We provide examples of these prac- develop transfer agreement programs, adopt a tices later in this report. common core curriculum in general education for transfer students, implement common course No State Approval Required numbering, and standardize prerequisites for For New Programs high-demand majors across university campuses. In many states, new program approval is an Through these laws, California has regulated the important coordination mechanism. State coor- transfer process, but has not held the institutions dinating boards have used approval authority to accountable for results. The transfer process prevent the creation of new programs that are remains complex and difficult for students to not aligned with state priorities and to control navigate, and transfer rates have remained flat program proliferation—for example, by requiring for decades. This stands in stark contrast to the institutions to phase out lower priority programs example we provided from Virginia, where the before creating new ones. In California, CPEC’s universities doubled the number of students role in program approval is advisory only, and transferring from community colleges in a period institutions do not always follow the commission’s of a few years under a system of greater institu- program recommendations. Likewise, although tional autonomy with meaningful accountability CPEC approval is required for new institutions for results. and campuses of public higher education, many Authority of Coordinating off-campus instructional sites can be established Body Is Limited without external approval. In most cases, new programs and sites that institutions create require The role of CPEC with respect to the higher long-term support from state resources, whether education segments, the Legislature, and the through funding augmentations or reallocation of Governor is primarily advisory. An advisory role state funds from other priorities within institutions. can be effective in guiding state policy if policy- makers are involved in major higher education No Accountability for Results policy decisions and give weight to the advice Earlier in this report, we indicated that some provided. Otherwise, more formal structures— states have moved away from regulatory control such as greater approval authority for the coordi- in higher education in favor of outcome-based nating body or a more formal legislative approval accountability systems. California has neither process—may be required to provide checks and imposed effective regulatory control nor held its balances to institutional influence. public institutions accountable for meeting state goals, as illustrated by efforts to facilitate commu- nity college transfers. LEGISLATIVE ANALYST’S OFFICE 19 AN LAO REPORT State Lacks Comprehensive make extensive use of alumni, student, faculty, Higher Education Data and staff networks for legislative advocacy. In ad- dition, faculty and staff organizations maintain a Data is a vital tool for coordination. Infor- significant lobbying presence in Sacramento. mation about the students, courses, costs, and The higher education segments are also well outcomes of higher education should inform represented in CPEC. Currently, 5 of 16 commis- goal-setting, planning, resource allocation, and sioners represent the education segments (includ- accountability. The Legislature strengthened ing the independent colleges and the Board of CPEC’s authority to collect individual student Education), and two more are students from the data from the public segments with Chapter 916, segments. Together, these constituencies are only Statutes of 1999 (AB 1570, Villaraigosa). Follow- one vote short of comprising half the commis- ing enactment of this law, it took six years for the sion. In most states, higher education institutions segments to provide individual student data to have much smaller representation on their higher CPEC. The data the segments provided to CPEC education coordinating boards or none at all. In is valuable, but not comprehensive—it lacks key addition, the segmental representatives in CPEC information such as course enrollment and com- are supported by institutional staff who can de- pletions, remedial course-taking, and socioeco- vote more time and attention to commission mat- nomic status, and cannot be matched with K-12 ters than most public members can. As a result, student data. It is technically possible to match the segments’ influence is likely disproportional records in CPEC’s data bank with employment to their numbers. records from the Employment Development Department to provide useful measures of the CPEC’s Influence Has Been Limited contribution of educational programs to meeting The Legislature and the segments have not workforce needs. Yet, the state has not devel- turned to CPEC for policy leadership in recent oped the policies and procedures that would years. The following examples illustrate CPEC’s permit data sharing between these agencies. The marginalization in several policy discussions. commission has not conducted extensive analy- ses with student data, in part due to resource ➢ Recent accountability bills passed by the constraints, and has not made the data available Legislature (but vetoed by the Governor) to outside researchers for further analyses that would have assigned CPEC a limited could support policy development. data collection role with no meaning- ful analytical responsibility. Similarly, C l e s alIfornIa aCks ffeCTIVe TaTeWIde a workgroup on education data gov- P l olICy eadershIP ernance mandated by the Legislature in 2008 excluded CPEC, even though Segments Have CPEC is currently the only state agency Disproportionate Influence with extensive intersegmental education The higher education segments maintain ac- data. In most states, the higher education tive government relations offices in Sacramento coordinating board leads accountability to promote their legislative interests. They also systems. 20 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT ➢ The CPEC was not central to legislative of these factors have diminished enthusiasm for discussions about a significant change independent policy advice. in UC’s admissions policy in late 2008 Additionally, CPEC’s publications sometimes and early 2009, despite specific statutory lack specific policy recommendations, or offer responsibility for advising the Legislature recommendations that do not address the politi- on proposed changes to eligibility pools. cal realities of issues. For example, in a series of reports on affordability published from 2006 ➢ A recent intersegmental transfer initiative to 2008, the commission urged California poli- announced by the three public higher ed- cymakers to increase their investment in higher ucation segments does not involve CPEC. education, but did not suggest any cost savings, A Demand Problem? In some cases, CPEC revenue increases, or other ways to fund the ad- has taken strong positions on important policy ditional investment. In these cases, the commis- issues, but the segments and the Legislature have sion’s reports are not as helpful as they could be not always adopted its recommendations. For to policymakers. example, CPEC recommended against develop- Lack of Continuity Hinders ing a law school at UC Irvine, and raised con- Legislative Leadership cerns about granting CSU the authority to offer doctoral degrees in education, but both of those Changes in membership of legislative commit- initiatives advanced. tees (due to changes in appointments as well as Several national experts have suggested turnover in legislative seats) reduce the state’s in- that there is little demand for strong leadership stitutional knowledge base and policy continuity. in California from an organization like CPEC. This may contribute to the difficulty of implement- The higher education segments prefer to work ing long-term reforms and increased influence of directly with policymakers to influence events, the segments and other stakeholder groups. and policymakers have been amenable to this In the next section, we present examples of arrangement. Furthermore, the state’s reputation more effective coordination in other states, with from the past success of California’s higher edu- some lessons for California. Following that, we cation system may engender complacency. Both offer recommendations to strengthen California’s higher education coordination mechanisms. HOW BETTER COORDINATION COULD IMPROVE OUTCOMES: LESSONS FROM OTHER STATES All states have some form of higher educa- boards (with legal and management control of tion planning and coordination entity. A couple higher education institutions) and those with of states rely on their university systems for these coordinating boards. Most coordinating boards functions, and the rest are about evenly divided have regulatory authority over functions such as between those with consolidated governing planning, academic program review, campus and LEGISLATIVE ANALYST’S OFFICE 21 AN LAO REPORT facility review, budgetary processes, accountabil- initiative to strengthen program review, improve ity systems, and mission definition. They provide management tools, and create a tough process policy analysis and policy leadership, and some for making choices and setting priorities. The oversee financial aid and other programmatic program review process was based on statewide functions. studies to establish capacity needs and priori- Few states come close to matching California ties for each discipline. Institutions conducted in size and diversity of population, or magnitude their academic program reviews in the context of and organization of public higher education. these studies, and coordinated their submissions However, several states face similar challenges so that all programs in the state in a particular in higher education, and their experiences can discipline, such as history, were reviewed in the provide lessons for California. same year. This allowed the state board to con- sider the programs collectively, from a statewide P l I olICy eadershIP In llInoIs perspective. The program redirected hundreds The Illinois Board of Higher Education is of millions of dollars by eliminating lower-value considered by policy experts to have achieved activities and reinvesting in higher-value activities among the best balance of institutional autonomy in just the first three years. Colleges discontinued and state priorities, especially during the 1990s. hundreds of small or low-priority programs and The board has a record of accomplishment in academic units (departments, schools, and col- defining the important policy issues facing higher leges, research and public service centers, and education, pushing the universities to act like a institutes), and streamlined administrative func- system, and serving as a strong advocate and tions. They redirected resources to areas such critic of higher education in budget and policy as improving undergraduate education, enhanc- discussions. ing salary competitiveness, improving minority The Illinois board includes ten public mem- student achievement, reducing deferred mainte- bers appointed by the Governor and confirmed nance backlogs, and enhancing library support. by the Senate, three institutional representatives The PQP initiative is no longer active—it gave appointed by the Governor, two students, and way to different projects under new board lead- two ex-officio members. The board is respon- ership—but it provides one of the clearest exam- sible for statewide planning and policy develop- ples of effective statewide coordination balancing ment; administers federal and state grant pro- institutional autonomy with state priorities. grams related to the board’s priorities; approves Illinois has also developed extensive data on all new programs of instruction, research, and instructional costs by level of instruction (un- public service for public colleges and universi- dergraduate and graduate) and discipline, using ties; conducts periodic review of existing pro- a uniform cost accounting system for all institu- grams; and maintains a comprehensive informa- tions. Several other states, including Washington tion system with data on students, faculty, and and Texas, have developed similar information. institutional expenditures. These data allow them to compare how resourc- In the early 1990s, the Illinois board estab- es are used across programs and institutions, and lished the Priorities, Quality, Productivity (PQP) to determine per-student costs for setting tuition 22 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT and fees, and funding enrollment based on the sures. The “Closing the Gaps” effort resulted in mix of disciplines and instructional levels at each several new initiatives to increase college prepa- institution. This information could be used to ration, affordability, participation, and success, guide investments in higher education programs, and the state has been recording steady progress and to identify opportunities to reduce costs and toward most of its targets. increase return on investment. P -B f o erformanCe ased undInG In hIo a r T CCounTaBIlITy for esulTs In exas In 2008, Ohio restructured public higher The Texas Higher Education Coordinating education to improve coordination, reduce inef- Board has been successful in defining the state’s ficient competition, and better align the state’s in- higher education challenges and engaging busi- vestment with the state’s needs. Ohio unified its ness, political, and education leaders and con- numerous colleges and universities under a new stituencies in developing solutions. The Governor University System of Ohio, and developed a ten- appoints all nine members of the board, none of year strategic plan for the system with a sharp whom may be employed in education or serve focus on three goals: graduating more students on a college board of trustees. The coordinat- from college, keeping more graduates in Ohio, ing board has a number of advisory boards that and attracting more degree holders to the state. do include institutional representatives. The The state’s Chancellor and Board of Regents coordinating board has approval authority for undertook these efforts in response to several all degree programs and off-campus activities at legislative and gubernatorial directives aimed at public universities and community and technical restoring the state’s economic health following colleges. It develops funding formulas for higher decades of decline in the previously dominant education for use by the Governor and legislative manufacturing sector. budget committees in recommending appro- The Ohio Board of Regents is the coordinat- priation levels. The board approves most new ing board for higher education. It includes nine construction and renovation at public institu- members appointed by the Governor and two tions, and adopts standards for the operation of ex-officio representatives of the state Legislature. community colleges. The Governor also appoints the Chancellor, who About ten years ago, the Texas board con- leads the professional staff of the agency, with ducted a comprehensive demographic study the advice and consent of the Senate. The Chan- of the state to identify gaps in higher education cellor is a member of the Governor’s cabinet. participation, success, quality, and research fund- The board has authority to approve or disap- ing relative to other states. Through a participa- prove programs at public and private colleges, tory statewide consultation process, the board set and diploma schools of nursing, in the state. The specific performance targets for enrollment and board also reviews institutional requests for state degree completion by region and by racial and support and makes recommendations on a con- ethnic group, and for other measures related to solidated budget for higher education. quality and research. The board is responsible for Under the new umbrella structure and strate- accountability reporting based on those mea- gic plan, the state imposed greater mission dif- LEGISLATIVE ANALYST’S OFFICE 23 AN LAO REPORT ferentiation; granted institutions flexibility to set Ohio is now working to change how its tuition, as long as they provide for financial aid; colleges and universities receive funding. It is increased opportunities for dual enrollment of moving away from funding based on enrollment, high school students and recapture of high school towards a performance-based funding struc- dropouts; created a comprehensive unified data ture. The new structure, with different formulas system; developed programs to increase the suc- for flagship campuses, regional campuses, and cess of underrepresented groups; and initiated community colleges, rewards steps toward suc- continuous improvement processes focused on cess (such as course completion and community efficiency and costs. The plan includes baseline college transfer) and degree completion. The information about the condition of education in outcomes valued in this structure relate directly Ohio, and 20 “measurements of success” to track to the measurements of success in Ohio’s stra- progress toward goals (see Figure 1). tegic plan. Following an extensive consultation Figure 1 The University System of Ohio Accountability Measures Access • Total post-secondary enrollment • Total Science, Technology, Engineering, and Mathematics degrees awarded • Total enrollees age 25 and older • Total degrees awarded to first generation college students • Percent of total degrees awarded to Black and Hispanic students Quality • Improvement in actual graduation rate over expected graduation rate (2007 as baseline) • Measuring the system’s reputation: Number of first time enrollees in the top 20 percent SAT/ACT (at University Main Campuses) • Percent of facilities in satisfactory condition or needing only minor rehabilitation • Total size of endowments and foundations per full-time equivalent (FTE) • Federally financed research spending per capita—national rank Affordability and Efficiency • Average out of pocket cost • Tuition and fees of a combined associate and bachelor’s degree offered on a community college or university regional campus—national rank • State funding per FTE—relationship to the national average • Percent of first time enrollees below age 21 with equivalent of one semester or more of college credit earned during high school • Percent of bachelor’s degree recipients with at least one year of credit from community college Economic Leadership • Industrially financed research spending per capita—national rank • Globalization measure: Total international students/Ohio students studying abroad annually • Invention disclosures filed + university start ups attracting more than $1,000,000 • Business satisfaction—measured through survey • Number of students engaged in internships and co-ops Source: University System of Ohio. 24 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT process, the move to performance funding has policymakers to test a theoretical inter- received broad support from college faculty and vention to improve student transition to, administrators, despite some concerns about and retention in, postsecondary educa- implementation details. tion, and see projected results based on the current K-20 pipeline. This work d I W d rIVInG mProVemenT ITh aTa formed the basis for a legislative agenda I f W n lorIda and ashInGTon to improve outcomes. Florida’s Statewide K-20 Longitudinal ➢ High School Feedback. Florida offers an Data System annual online feedback report to all high Florida has one of the nation’s most com- schools in the state providing information prehensive and mature longitudinal student data about their students’ SAT, ACT, and col- systems. Its single database for K-20 education lege placement test results; entrance into is linked with the Florida Board of Governors, postsecondary education; and ultimate Independent Colleges and Universities of Florida, success in postsecondary education. Department of Children and Families, Agency for ➢ Accountability. The legislature enacted Workforce Innovation, Department of Juvenile an accountability law in 2002 establish- Justice, and Department of Corrections, as well ing performance funding based on prog- as national data sources such as the National ress toward four statewide educational Student Clearinghouse, College Board, ACT, and goals. The funding scheme accounts for Federal Employment Data Exchange System. Six up to 10 percent of the annual legisla- examples illustrate how state policymakers and tive appropriation for each education educational institutions use comprehensive data sector—K-12, workforce education, adult to inform their decisions and improve outcomes. education, community colleges, and ➢ Workforce Estimating. State officials universities. The community colleges use labor statistics in combination with have reported that their campuses have enrollment, completion, and placement eliminated many less-productive pro- data from the integrated education data grams and streamlined others—increas- system to provide the Legislature with ing the number of graduates and place- semi-annual information regarding the ments while reducing overall full-time supply and demand for certain kinds of equivalent enrollment—to qualify for the jobs in Florida’s economy. The data are performance-based funding. used to target vocational and academic disciplines for special funding, financial ➢ Teacher Pipeline. Researchers track the aid, or other attention. progress of teacher education students through their degree programs and into ➢ Student Flow Model. Using data from classrooms or other employment venues the integrated systems, analysts devel- to identify program initiatives that are oped a student flow model that allowed particularly successful in training teach- LEGISLATIVE ANALYST’S OFFICE 25 AN LAO REPORT ers, placing and retaining them in the is managed by a division of the state’s Depart- classroom, and helping them succeed ment of Education, under the purview of the with respect to student learning. board. The unified structure no doubt facilitates information sharing across institutional bound- ➢ Institutional Initiatives. The statewide aries, but the statewide data system predates data are available to educational institu- the consolidation. Florida has had integrated tions in Florida for research into student education and workforce data for over 20 years access, retention, and success. The through interagency agreements among multiple Florida Division of Community Colleges educational and other entities. has used the data to compare outcomes As shown in Florida, the development and at individual community colleges (gradu- maintenance of a comprehensive, longitudinal ation, transfer, and still-enrolled rates education data system requires substantial re- of student cohorts) with those of their sources. Additionally, the capacity to use infor- peers in the state and nationally and to mation from such systems to inform state policy analyze specific subgroups of students requires investment in skilled researchers and on the basis of student characteristics or policy analysts, as well as willingness to share course-taking patterns. One recent study data with external researchers. examined the impact of taking a student life skills course on student success. The Washington’s Education study showed that taking this course Research and Data Center significantly increased students’ success In 2006, policymakers in the state of Wash- and retention rates, regardless of student ington adopted ten long-range goals for their characteristics. These results have caused education system, and directed key coordinating several institutions to require that enter- bodies to develop indicators and create a longitu- ing students enroll in the course. dinal student data system that could track prog- Florida’s public education sectors, from pre- ress toward achieving these goals. (The nearby kindergarten to postsecondary, are under a single text box highlights the goals pertaining to postsec- governing structure, the state Board of Education, ondary education.) The state’s Office of Financial which is appointed by the Governor. In 2001, Management established the Education Research several existing statewide boards and commis- and Data Center in 2007, in partnership with the sions related to postsecondary education, includ- Higher Education Coordinating Board, Board for ing the State University System Board of Regents, Community and Technical Colleges, four-year in- the State Board of Community Colleges, the State stitutions of higher education, and the Superinten- Board of Independent Colleges and Universities, dent of Public Instruction. Since then, the center the State Board of Non-Public Career Education, has completed a per-student higher education and the Postsecondary Education Planning Com- funding study, published a compendium of key mission, were repealed and, in most cases, their education indicators, contributed to enrollment duties transferred to the state Board of Education. projections, and added a longitudinal component The state’s comprehensive education data system to the state’s higher education enrollment system. 26 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT The center now has the capacity to answer their ability to target education investments and questions such as: improve student success and system productiv- ➢ How are high school course-taking pat- ity. In the future, the center may add partnerships with early learning centers and social services terns related to remedial course taking in agencies. college? Community and Technical College Student ➢ What are retention and completion rates Data System. In addition to the statewide data and time to degree, and are these differ- center, Washington’s Board for Community and ent for students entering from high school Technical Colleges has a strong record of using and community college transfers? its student data system for applied research. Two examples illustrate the potential to use compre- ➢ What are the workforce outcomes for hensive data to improve student outcomes: individuals who complete various edu- ➢ Tipping Point. One Washington study cation and training programs? For those of nearly 35,000 adult working-age who do not finish? students—most of whom entered the Policymakers have determined that these colleges through the English as a second are important questions to answer to improve language (ESL), adult basic education W ’ s m P G ashInGTon s TraTeGIC asTer lan oals The Strategic Master Plan adopted by the 2008 Washington Legislature calls for: ➢ Increasing degree and certificate attainment by more than 40 percent annually by 2018. ➢ Promoting economic growth and innovation by focusing on the skills and knowledge needed for prosperity in the 21st century. ➢ Emphasizing accountability for results throughout the higher education system. When the Legislature approved the strategic plan, it directed the Higher Education Coordi- nating Board to develop a ten-year action plan to guide policy and funding decisions through 2018. The Legislature asked for an action plan that specifies: ➢ How the plan’s degree goals will align with state workforce needs in the next decade. ➢ How the higher education system will match system and program capacity with chang- ing state workforce needs. ➢ How much the plan will cost to implement. ➢ What the higher education system will do to increase access, enrollment, and student success. LEGISLATIVE ANALYST’S OFFICE 27 AN LAO REPORT (ABE), or GED-preparation programs— all 34 community and technical colleges, documented a tipping point. Students with enhanced funding from the state. had a significant earnings advantage if The state also developed a new financial they completed at least one year’s worth aid program for low-income adults based of college-credit courses and earned a on the board’s research. certificate or degree. The study, however, ➢ Momentum Points. Building on research found that relatively few students reached at the system level, the state board has this tipping point. Many did not transition developed a way to measure and reward from ESL and ABE to postsecondary edu- continuous improvement in student cation and training because the commu- achievement at the colleges. Measures nity and technical colleges did not have represent incremental gains, or momen- strong coordination among their three tum points, toward college success and mission areas (basic skills, workforce, achievement of certificates, degrees, and transfer), and the state did not have and apprenticeships. These momentum policies that encourage colleges to align points include advancing through ABE their mission areas in a way that facilitates or ESL; completing pre-college English transition of students from basic skills and math; earning the first, fifteenth, and into workforce or transfer programs. This thirtieth college-level credits; completing research helped persuade the Governor, college math or computation courses; Legislature, and Workforce Education and and earning a certificate backed by at Training Board to support a new training least one year of college-level credit, or model, Integrated Basic Education and a degree, or apprenticeship award. The Skills Training (I-BEST), designed to bring measurement and reward system is in the low-skill adults to the tipping point. In early stages of implementation. Over the ten pilot projects, I-BEST students earned next few years, the system will be used to five times more college credits and were track student achievement, help colleges 15 times more likely to complete work- plan improvement strategies, and docu- force training than were traditional ESL ment best practices that colleges can students. The program has expanded to share with each other. RECOMMENDATIONS The examples in the previous section il- (1) setting a clear public agenda for higher educa- lustrate how effective coordination can improve tion, (2) strengthening coordination mechanisms, higher education outcomes for students and and (3) rebuilding the state’s capacity for policy states. In this section, we recommend ways to im- leadership, through CPEC or an alternative struc- prove coordination in California to better align the ture. We offer several strategies to improve CPEC’s performance of the higher education system with effectiveness under the third recommendation. Our the state’s needs. To that end, we recommend recommendations are summarized in Figure 2. 28 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT s C P a and research. In fact, the budget for the higher eT a lear uBlIC Genda f h e education coordinating board is organized ac- or IGher duCaTIon cording to the Close the Gaps goals and perfor- We recommend that the Legislature adopt a mance measures in the state’s appropriation act. clear public agenda for higher education, with Ohio, Florida, and Washington all establish state specific statewide goals that can serve as the goals for higher education, with performance framework for an accountability system designed measures and various degrees of performance to align higher education performance with the funding. More generally, states with effective state’s needs. higher education coordination have clear priori- Earlier in this report, we discussed the central ties and a small number of well-defined goals role of higher education goals for planning and for their higher education systems. In contrast, coordination activities. We also noted some of California has broad goals, as expressed in the the consequences of California’s lack of goals. Master Plan and subsequent reports and leg- The states highlighted in this report have used islation, but no comprehensive articulation of clear state goals and priorities to focus higher specific and measurable objectives. education systems on serving the public inter- We recommend that the Legislature work est. Illinois’ PQP initiative focused attention on a with the administration and others to adopt a well-defined agenda of setting priorities, improv- clear public agenda for higher education, with ing quality, and increasing productivity. Texas’ specific and focused goals for higher education. Close the Gaps initiative set specific performance Two bills passed by the Legislature in recent targets for postsecondary completion, quality, years sought to ac- complish this, but were Figure 2 vetoed by the Governor. Summary of Recommendations In his veto messages, the Governor cited the need Set a Clear Public Agenda for Higher Education for stronger accountability • Set specific statewide goals (see sample goals) measures (“incentives or • Use goals as framework for an accountability system Strengthen Coordination Mechanisms consequences that would • Align funding formulas with state goals modify behavior to meet • Simplify articulation and transfer processes any policy objectives”) in • Improve oversight for major policy decisions • Reform program approval process the bills. We agree that • Consider regional coordination meaningful accountability Rebuild State’s Capacity for Policy Leadership is needed, and suggest • Maintain coordinating board’s independence from executive and legislative that articulating specific branches and increase its independence from higher education segments • Revise appointment process for the coordinating board goals is an important first • Assign clear responsibility for shepherding the public agenda step. A more nuanced ne- • Create a more comprehensive statewide student data resource with enhanced research and analysis capabilities gotiation of accountability measures could follow LEGISLATIVE ANALYST’S OFFICE 29 AN LAO REPORT enactment of legislation establishing goals for the improve overall student persistence and comple- state’s higher education system. tion or increase on-time graduation rates. In Figure 3, we provide a sample public While we recommend the state adopt fund- agenda for California that builds on Master Plan ing formulas that reflect its priorities, it is difficult principles. This example is offered as an illustra- to develop robust funding formulas. They must tion—development of a state’s public agenda be designed carefully, with extensive participa- should involve formal deliberation by policymak- tion from institutions and other stakeholders to ers and broad stakeholder participation. promote the right outcomes, minimize unintend- ed consequences, and ensure sustainability. They s C TrenGThen oordInaTIon should be modeled to test potential results for m eChanIsms individual institutions and overall funding under We recommend that the Legislature strength- various scenarios. en several critical mechanisms of coordina- Simplify Articulation and tion—including funding formulas; articulation Transfer Processes and transfer processes; oversight for major policy decisions such as those affecting institutional In our 2006 report, Promoting Access to missions, eligibility standards, and new programs; Higher Education: A Review of the State’s Trans- and regional coordination. fer Process, we recommended streamlining UC’s California’s approach to coordination—in- general education course requirements so that corporating primarily passive mechanisms such they would be consistent across all UC cam- as differential missions and admissions pools, puses, and streamlining UC and CSU pre-major as well as several active mechanisms such as a course requirements to achieve consistency coordinating body and annual budget process— within each university segment. Although CSU is well suited to our large and segmented higher has made some progress in bringing partial education system. Several of the mechanisms, uniformity to pre-major requirements, substantial however, should be strengthened to provide variation still exists across campuses, and our more effective coordination. recommendations remain applicable. Align Funding Mechanisms Improve Oversight for With State Goals Major Policy Decisions Funding should be better aligned with state Mission and Enrollment Pools. We have pro- goals. Specific mechanisms would depend on vided examples of institutional actions that have the state’s articulation of goals, as previously weakened mission differentiation and changed noted. Examples might include changing census eligibility standards, in some cases with little or dates for counting enrollment to be funded, or no legislative involvement. Because differentia- providing differential funding by academic dis- tion of functions and enrollment pools is at the cipline and instructional level. More fundamen- core of California’s higher education system tally, this could include performance funding, design, any significant changes to these elements such as providing incentives to institutions that should require significant involvement from state 30 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Figure 3 Sample Public Agenda for Higher Education in California Mission The purpose of the higher education system in California is to align the knowledge and skills of the adult popula- tion with the civic and workforce needs of the state of California. Master Plan Principles • Access to higher education for all adults who could benefit from postsecondary instruction with commu- nity colleges serving as the main entryway for the majority of undergraduates. • Affordability through general support to public institutions and financial aid for students attending public and private colleges. • High quality and cost containment through orderly growth, differentiation of functions, and coordination. Priority Goals Access and Success 1. Increase awareness of and student preparation for the demands of postsecondary education. 2. Achieve measurable value-added student learning outcomes. 3. Increase rates of program completion, transfer, licensure and certification, and job placement. Affordability 4. Adopt and maintain a fee policy that defines the share of educational costs that students pay. 5. Maintain financial aid so that all students are financially able to attend higher education. Quality and Cost Containment 6. Provide educational programs whose content, quality, and costs are aligned with state needs. 7. Reduce cost per completion in each public segment. Accountability Although the Master Plan does not include accountability, policymakers have come to recognize it as necessary for achieving priority goals. 8. Expand statewide longitudinal data collection and analysis to inform state policy decisions. 9. Align policies and funding mechanisms with priority state goals. LEGISLATIVE ANALYST’S OFFICE 31 AN LAO REPORT policymakers. We recommend that changes to Resolving persistent problems in articulation institutional mission and significant changes to el- and transfer has proved difficult on a statewide igibility and selection criteria undergo legislative level; it could be more feasible on a regional review. We further recommend that the Legisla- level. Winning agreement on lower division ture periodically review the missions and enroll- requirements for business majors among the ment practices of each segment to determine three CSU campuses and one UC campus (and, whether any refinement is necessary. Where ideally, several private college campuses) in the necessary, the Legislature should pass legislation Central Valley should be easier than negotiat- defining or adjusting the system’s parameters to ing among the 32 public and numerous private improve its alignment with the state’s needs. universities in the state. The Legislature could re- New Program Approval. In another report in quire the public universities and community col- this series, we evaluate the existing review and leges within each region of the state to agree on approval process for new academic programs, all lower division requirements for high-demand and make several recommendations for improve- majors, for example. The California Economic ment. These recommendations are designed Strategy Panel has defined nine regions for the to better connect growth in programs to state state that may serve as a starting point for higher needs, and include (1) periodically measuring education regions. supply and demand in certain fields; (2) reversing Statewide goals for higher education could the current order of events—first identify state- also be disaggregated into regional goals. Large wide demands and priorities, and then solicit regional disparities in family income, educational proposals from campuses; (3) focusing review on attainment, college readiness, postsecondary the largest proposals; (4) requiring state coordi- participation, financial need, and other factors nating board concurrence for proposals to move are masked by statewide averages. The Legisla- forward; and (5) requiring legislative approval ture could establish regional goals, as subsets of for larger proposals, or separate budget items for the statewide goals, that could be used for tar- new schools and major programs. geted planning, coordination, and accountability at the regional level. Consider Regional Coordination r s ’ C eBuIld TaTe s aPaCITy Policymakers may also wish to consider new f P l or olICy eadershIP models for active coordination. In some areas of California, postsecondary institutions have We recommend the Legislature reform CPEC been working together with K-12, workforce, and or replace it with a new coordinating body to economic development officials to coordinate help create higher education policy leadership educational services at a regional level. These ef- for California. We offer the following strategies to forts have shown promise in improving outcomes increase the effectiveness of an active coordinat- for students and institutions. They have relied on ing body: local leadership and shared interests, but may pro- ➢ Maintain its independence from the ex- vide a constructive model for active coordination. ecutive and legislative branches, and in- 32 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT crease its independence from the higher further diminishing its usefulness to the Legisla- education segments. ture. For these reasons, we recommend that the independent commission structure be retained ➢ Develop a more concentrated governing for CPEC or a successor organization. board appointment process. A related issue is domination of CPEC by the ➢ Assign clear responsibility for shepherding higher education institutions, as discussed earlier in this report. Between the public and inde- the public agenda, with an expanded role pendent segments, the Board of Education, and in resource allocation decisions and sup- college students, educational institutions are only port commensurate with responsibilities. one vote short of comprising half the commis- ➢ Create a more comprehensive statewide sion. Of the five states highlighted in this report, student data resource, with enhanced four (Texas, Ohio, Florida, and Washington) have research and analysis capabilities. no coordinating board positions designated for higher education institutions. In Illinois, 3 of 15 We believe there are several critical coordi- positions are institution governing board repre- nating functions that are necessary to protect the sentatives. Several states have separate, high- state’s investment in higher education, and that level advisory boards for the heads of the higher at least some of these are best performed by an education systems or institutions to contribute independent policy body. The Legislature could to the deliberations of the coordinating board. reform CPEC so that it can become an effective (California also has a statutory advisory commit- policy body, or eliminate it and create a new tee at the staff level to inform the work of the organization to advance its higher education commission.) We recommend the Legislature agenda at the state level. eliminate or reduce the representation of institu- Increase Independence tions on the state’s coordinating board, perhaps permitting one or two representatives of the Several reform efforts in recent years sought California Education Round Table to serve on the to place CPEC’s functions under executive con- commission, or elevating the role of the existing trol. In our view, the interests of the state are best statutory advisory committee with respect to the served when the Governor and Legislature can commission. base their policy decisions on rigorous, unbiased analysis supported by thorough research and Revise Commission accurate data provided by an independent entity Appointment Process that is responsive, but not beholden to either The quality of the governing board is critical branch of government. If higher education policy to the effectiveness of the coordinating agency. analysis were conducted in an agency under For CPEC, the commission appointment process executive control, the Legislature could reason- is distributed among seven appointing authori- ably be concerned about partisan or ideological ties—the Governor, the Assembly Speaker, the bias. Likewise, a policy body in the executive Chair of the Senate Rules Committee, the Gov- hierarchy would not be free to critically appraise erning Boards of the three public higher educa- the administration’s budget and policy proposals, LEGISLATIVE ANALYST’S OFFICE 33 AN LAO REPORT tion segments, and the State Board of Education. Strategies to focus the coordinating board’s Despite statutory direction that the appointing responsibility could include giving it an expand- authorities confer with each other, this distribut- ed advisory role in executive and legislative re- ed process can lead to problems. For example, it source allocation processes, increasing its formal can engender the perception that members owe authority to approve new academic programs their allegiance to their specific constituencies— and facilities with significant out-year budgetary either the institutional segments they represent or policy impacts, and assigning to it a central or the individuals who appointed them. This role in an accountability system based on the tends to result in policy recommendations that state’s policy agenda. All other activities should devolve to the lowest common denominator that support these functions (for example, its role as can achieve a majority, generally preserving the data repository would be instrumental in carrying status quo and precluding bold actions. out these responsibilities), or relate directly and To improve California’s ability to develop and explicitly to the state’s higher education agenda. maintain an effective governing board for higher Develop Comprehensive Statewide education coordination, we recommend that Data Resource appointment authority for members of the board be more concentrated and that the state estab- We recommend the Legislature create a lish qualifications for board positions that can comprehensive statewide student data resource help ensure members will have the experience for higher education, with enhanced research and skills to guide higher education policy. With and analysis capabilities and linkages to other fewer institutional representatives, clear qualifi- state systems. cations and more concentrated appointments, California is making progress in developing the coordinating board is more likely to achieve its educational data systems. The Department effective balance and cohesion. of Education has established longitudinal K-12 student achievement and teacher data systems, Focus Responsibilities and Resources and recent legislation (Chapter 561, Statutes of On Shepherding Public Agenda 2008 [SB 1298, Simitian]) lays the groundwork We recommend the Legislature assign clear to link these systems to child care, higher educa- responsibility to the coordinating board for shep- tion, health, welfare, juvenile justice, corrections, herding the public agenda, with an expanded and employment agency data. Several challenges role in resource allocation decisions and support remain, however. There are gaps in statewide commensurate with responsibilities. This would higher education data as described in this report, require a clear public agenda established by poli- and missing linkages with other data sources cymakers; a focus on a limited set of state goals that would enable researchers to evaluate the and objectives; and financial, policy, and staff longer-term outcomes of educational programs. resources to perform the necessary planning and As California continues to develop its education coordination duties. data systems, it will be important to ensure that the statewide higher education data reported by the institutions is of sufficient detail and specific- 34 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT ity to inform higher education policy and fi- move between the public and nonpublic sectors, nance decisions. We recommend the Legislature for example, or to evaluate the effectiveness of expand the authority of the coordinating body Cal Grants at private institutions, could help to to require data from the public higher education inform policy decisions. segments, including data on course enrollments, Establishing a solid foundation of data that student financial status, and remedial course tak- can be used for policy analysis will be an impor- ing. We also recommend the Legislature consider tant step. Transforming the raw data into useful limited reporting requirements for non-public information, however, will require (1) providing institutions as a condition of participation in state greater analytical resources at the state level, or financial aid programs. Data that would permit (2) making the data available to researchers who the state to track the progress of students who can conduct analyses and publish results. CONCLUSION While California’s mostly passive mecha- college educated workers over the next fifteen nisms for coordinating its higher education years. In this report, we have identified several system worked well during the Master Plan strategies for improving the coordination of the period of rapid expansion, their effectiveness has state’s system of higher education. We believe declined markedly in recent decades. California these strategies will enhance policymakers’ abil- is now facing real challenges to access, afford- ity to target resources in ways that will improve ability, and productivity in higher education, at the system’s performance in meeting the state’s a time when experts predict a great shortage of educational and workforce needs. LEGISLATIVE ANALYST’S OFFICE 35 AN LAO REPORT LAO Publications This report was prepared by Judy Heiman and reviewed by Steve Boilard. The Legislative Analyst’s Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an E-mail subscription service, are available on the LAO’s Internet site at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. Cover black and white photo, San Jose State College Quad, 1963. Used with permission. SJSU University Archives Collection, Courtesy of Special Collections & Archives, San Jose State University. Cover color photo, Haas School of Business, University of California, Berkeley. Used with permission. Marketing and Communication, Haas School of Business. 36 LEGISLATIVE ANALYST’S OFFICE