The 2023-24 Budget: California Student Aid Commission

2023-24 BUDGET The 2023-24 Budget: California Student Aid Commission GABRIEL PETEK | LEGISLATIVE ANALYST | FEBRUARY 2023 SUMMARY Brief Covers the California Student Aid Commission (CSAC). This brief analyzes the Governor’s budget proposals for Cal Grants, Middle Class Scholarships (MCS), Golden State Education and Training Grants, Golden State Teacher Grants, and CSAC state operations. Recommend Determining Now Whether to Proceed With Cal Grant Reform. Last year, the state crafted a plan to potentially restructure the Cal Grant program in 2024-25. The program changes, which are estimated to cost $365 million ongoing, would be triggered if the state determines in spring 2024 that sufficient General Fund is available. Based on our budget projections, the Cal Grant program changes are very unlikely to be triggered. Moreover, the timing of the trigger is problematic for incoming students, some of whom would need to make college enrollment decisions without knowing whether they will be eligible for a Cal Grant award or how much aid they will receive. We recommend the Legislature instead determine during this year’s budget process whether to proceed with Cal Grant reform in 2024-25. Expanding the program would benefit many additional low-income students, but the expansion entails difficult fiscal trade-offs. Given the state’s projected out-year operating deficits, funding to support the expansion in 2024-25 likely would need to be redirected from other existing ongoing purposes. Recommend Any MCS Expansion Be Supported With Ongoing Funding. Consistent with last year’s budget agreement, the Governor’s budget increases MCS funding by $226 million one-time General Fund in 2023-24. Using one-time funds for an ongoing financial aid program has notable drawbacks, especially for continuing students who would see their award amounts reduced in 2024-25. In contrast, ongoing funding would provide greater certainty to students and families, while also better reflecting the out-year cost pressures for the state to maintain the higher funding level. We recommend the Legislature weigh expanding the MCS program against its other financial aid priorities, taking into account the state’s budget condition. We further recommend the Legislature provide ongoing funding for any MCS expansion, while rejecting the proposed one-time funding and counting this as a budget solution. Recommend Discontinuing Golden State Education and Training Grants. Since the state first created this program to provide grants to workers displaced by the pandemic, the underlying need for the program has diminished. Notably, the labor market has improved, and the program is reaching far fewer recipients than intended. Moreover, displaced workers have various other options for affordable education and training. Whereas the Governor proposes delaying the bulk of program funding ($400 million out of $500 million one-time General Fund) to future years, we recommend the Legislature instead discontinue this program and remove any remaining funding (an estimated $470 million) at the end of 2022-23. Brief Includes Several Other Recommendations. Regarding the Golden State Teacher Grants, we recommend the Legislature reject the Governor’s proposed trailer bill language that would expand grant eligibility. The administration’s rationale for the expanded eligibility is to increase program uptake, but data indicate the program is already fully subscribed. Regarding CSAC state operations, we recommend adopting the Governor’s proposals to increase staffing and funding for cybersecurity and human resources, as CSAC has provided adequate associated workload justification. However, we recommend rejecting the Governor’s proposal for CSAC to distribute financial aid toolkits to high schools, as the state is already taking several other actions to help high schools increase the number of their students completing financial aid applications. www.lao.ca.gov 1 2023-24 BUDGET INTRODUCTION Brief Focuses on CSAC Budget. CSAC Cal Grants, MCS, Golden State Education and administers many of the state’s student financial Training Grants, Golden State Teacher Grants, aid programs. This brief is organized around and state operations, respectively. This brief is the Governor’s 2023-24 budget proposals for the fifth in our series of higher education budget CSAC. The first section provides an overview of analyses. All of our 2023-24 budget reports can be CSAC’s budget. The remaining sections focus on accessed online. OVERVIEW Governor’s Budget Provides $3.2 Billion federal Temporary Assistance for Needy Families for CSAC in 2023-24. As Figure 1 shows, the (TANF). In 2023-24, state General Fund would proposed 2023-24 funding level is $178 million comprise 87 percent of CSAC funding and federal (5 percent) lower than the revised 2022-23 level. TANF would comprise 12 percent. The remainder The lower funding level is primarily due to changes would come from various sources, including in one-time funding, with ongoing funding remaining reimbursements from other departments. roughly flat from the previous year. The two main fund sources for CSAC are state General Fund and Figure 1 Ongoing General Fund Support for CSAC Remains About Flat in 2023-24 Spending by Program and Funding by Source (Dollars in Millions) Change From 2022-23 2021-22 2022-23 2023-24 Actual Revised Proposed Amount Percent Spending Local Assistance Cal Grants $2,233 $2,269 $2,259 -$10 —a Middle Class Scholarships 105 630 856b 226 36% Learning-Aligned Employment Programc 200 300 — -300 -100 Golden State Teacher Grantsc 56 147 49d -98 -67 Golden State Education and Training Grantsc 95e — — — N/A Other programs 38 46 38 -7 -16 Subtotals ($2,727) ($3,392) ($3,203) (-$190) (-6%) State operations $23 $22 $34f $12 54% Totals $2,750 $3,414 $3,236 -$178 -5% Funding General Fund Ongoing $1,974 $2,538 $2,529 -$9 —a One-time 354 455 286 -169 -37% Federal TANF 400 400 400 — — Other funds and reimbursements 22 21 21 —a —a a Less than $500,000 or 0.5 percent. b Includes $226 million in one-time funds. c One-time initiatives. d The administration intends to correct this to $98 million at the May Revision. e In addition to the $95.3 million provided in local assistance grants, $4.7 million is included in state operations for this program. f Includes $10.2 million in carryover funds for administration of certain multiyear initiatives. CSAC = California Student Aid Commission and TANF = Temporary Assistance for Needy Families. 2 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Governor’s Budget Reflects Several Changes Figure 2 to CSAC Spending. Figure 2 shows the ongoing and one-time spending changes proposed for Largest CSAC Spending Changes CSAC in 2023-24. The largest ongoing change is Are One Time a baseline adjustment for Cal Grants, reflecting General Fund Changes, 2023-24 (In Millions) the most recent program estimates. The largest one-time change is an augmentation for MCS Ongoing Spending consistent with last year’s budget agreement. Cal Grant baseline adjustments -$10 State operations augmentations 1 The Governor also has a few state operations Other financial aid program adjustments —a proposals for CSAC. In addition to the 2023-24 Subtotal (-$9) changes shown in the figure, the Governor has a One-Time Initiatives proposed budget solution to delay $400 million Middle Class Scholarship augmentation $226b General Fund for Golden State Education and Golden State Teacher Grants 49c State operations augmentations 1 Training Grants from 2021-22 to the out-years. Subtotal ($276) Though not affecting program funds, the Governor Other One-Time Adjustments also has a trailer bill proposal to expand eligibility Remove 2022-23 one-time funding -$455 for Golden State Teacher Grants. Carryover funds 10 Subtotal (-$444) Total -$178 a Less than $500,000. b The 2022-23 budget agreement included intent to provide these funds. c The 2021‑22 Budget Act appropriated a total of $500 million to be spread out evenly from 2021-22 through 2025-26. The amount shown reflects anticipated spending in 2023-24. The administration intends to correct this to $98 million at the May Revision to align with program estimates. CSAC = California Student Aid Commission. CAL GRANTS In this section, we begin by covering the systemwide tuition and fees at public universities state’s current Cal Grant program. Then, we and a fixed amount of tuition at private universities. discuss the potential implementation of Cal Grant Cal Grant B provides the same amount of tuition reform in 2024-25. coverage as Cal Grant A in most cases, while also providing an “access award” for nontuition CURRENT CAL GRANT PROGRAM expenses such as food and housing. Cal Grant C, which is only available to students enrolled in career Below, we first provide background on the technical education programs, provides lower current Cal Grant program and then discuss award amounts for tuition and nontuition expenses. cost estimates for this program under the Across all award types, larger amounts of nontuition Governor’s budget. coverage are available to students with dependent Background children as well as current and former foster youth. Cal Grant Program Is the State’s Largest Cal Grants Have Financial and Academic Financial Aid Program. The Cal Grant program is Eligibility Criteria. To qualify for Cal Grants, intended to help students with financial need cover students must meet certain income and asset college costs. The program offers multiple types criteria. These criteria vary by family size and are of Cal Grant awards. As Figure 3 on the next page adjusted annually for inflation. For example, in the shows, the amount of aid students receive depends 2022-23 award year, a dependent student from on their award type and the segment of higher a family of four must have an annual household education they attend. Cal Grant A covers full income of under $116,800 to qualify for Cal Grant A www.lao.ca.gov 3 2023-24 BUDGET Figure 3 or C, and under $61,400 to qualify for Cal Grant B. In most cases, students must also meet a grade Cal Grant Amounts Vary by Award Type, point average (GPA) requirement. The specific GPA Sector, and Student Characteristics requirement varies by award type. Most award Maximum Annual Award Amount, 2022-23 types require a minimum high school GPA of 2.0 or 3.0 or a minimum community college GPA of 2.0 Amount or 2.4. Tuition Coverage Most Cal Grants Are Entitlements, but Some Cal Grant A and Ba UC $13,104b Are Awarded Competitively. For more than Nonprofit institutions 9,358 20 years, the state has provided Cal Grants as WASC-accredited, for-profit institutions 8,056 entitlements to recent high school graduates as CSU 5,742 well as transfer students under age 28. In 2021-22, Other for-profit institutions 4,000 the state also began providing Cal Grants as Cal Grant C entitlements to community college students Private institutions $2,462 Nontuition Coverage regardless of their age and time out of high Cal Grant A school. The state currently provides approximately Students with dependent childrenc $6,000 140,000 new entitlement awards annually. The Foster youthc 6,000 state also provides a limited number of competitive Cal Grant B awards (13,000 new awards annually) to students Students with dependent childrenc $6,000 who do not qualify for an entitlement award— Foster youthc 6,000 typically older students attending four-year All other students 1,648 universities. Students generally may renew their Cal Grant C Students with dependent childrenc $4,000 Cal Grant awards for four years of full-time study Foster youthc 4,000 (or the equivalent). Other CCC students 1,094 Other private-institution students 547 Cost Estimates a Cal Grant B recipients generally do not receive tuition coverage in their Governor’s Budget Reflects Large Downward first year. b Reflects award amount for new UC students. Award amounts for Adjustment to 2022-23 Cal Grant Spending. continuing students are based on the tuition levels set in the year the student first enrolled at UC. From the 2022‑23 Budget Act level, the Governor’s c Students attending private for-profit institutions are ineligible for these budget revises current-year Cal Grant spending awards. down by $210 million (8.5 percent) to align WASC = Western Association of Schools and Colleges. with CSAC’s most recent cost estimates. As Figure 4 shows, Figure 4 spending is adjusted downward across all the higher education 2022-23 Cal Grant Spending Is Adjusted Downward at segments. The largest adjustment All Segments (in dollar terms) is at the California (Dollars in Millions) State University (CSU), consistent with the enrollment declines Change 2022-23 2022-23 that segment is experiencing Budget Act Revised Amount Percent in 2022-23. The next largest UC $1,011 $986 -$24 -2% adjustment is at the California CSU 829 764 -65 -8 Community Colleges (CCC). CCC 307 255 -53 -17 Private nonprofit 251 235 -17 -7 The CCC adjustment is primarily Private for-profit 31 29 -3 -9 attributable to community college Othera 49 — -49 -100 entitlement awards. Since the state Totals $2,478 $2,268 -$210 -8% began providing those awards in a The 2022‑23 Budget Act provided $49 million on top of baseline estimates to account for more 2021-22, costs have been notably students potentially returning to college following recent enrollment declines. It did not specify how these costs would be distributed by segment. The Governor’s budget removes these funds to align with the most recent cost estimates. 4 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET lower than expected, reflecting depressed CCC Background enrollment levels and low paid rates. (Across all State Might Restructure Cal Grant Program segments—and especially at CCC—some students in 2024-25, Subject to Trigger Provision. In the who are initially offered awards are not paid for 2022-23 budget package, the state adopted new various reasons, such as deciding not to enroll, rules for the Cal Grant program that would become no longer meeting eligibility requirements, or operative in 2024-25 only if certain conditions are administrative barriers.) met. Specifically, the new program—commonly Governor’s Budget Reflects Small Spending referred to as Cal Grant reform—would be Decrease in 2023-24. From the revised 2022-23 triggered on if the state (1) determines in spring spending level, the Governor’s budget further 2024 that sufficient General Fund is available decreases Cal Grant spending by $9.5 million to support the program changes and (2) enacts (0.4 percent) in 2023-24 to align with CSAC’s cost future legislation providing a corresponding estimates. We summarize the projected changes by appropriation. (This trigger is separate from the segment and award type in our Cal Grant Spending trigger restoration proposed in the Governor’s and Cal Grant Recipients tables. The lower budget as part of his approach to addressing the spending reflects a projected decline in renewal state’s budget problem.) Under the new program, recipients in 2023-24. This decline, however, is the existing Cal Grant award types are replaced largely offset by an assumed increase in new with a Cal Grant 2 award that provides nontuition recipients. The cost estimates also reflect higher coverage to community college students and a tuition award amounts for the two most recent Cal Grant 4 award that provides tuition coverage cohorts of University of California (UC) recipients, at all other segments. All awards under the new accounting for an estimated $46 million in additional program would be provided to eligible recipients Cal Grant costs in 2023-24. as entitlements, with no awards offered on a Cost Estimates Will Be Updated at May competitive basis. The new rules would apply to Revision. The Cal Grant cost estimates underlying all new applicants for Cal Grant awards beginning the Governor’s budget were prepared by CSAC in 2024-25, with renewal applicants continuing in October. We believe the estimates for 2022-23 to receive awards under the current rules. The and 2023-24 are reasonable based on the changes are estimated to increase net Cal Grant information available at that time. In the spring, costs by $365 million in 2024-25. CSAC will update its estimates based on more Cal Grant Reform Involves Several Key recent program data. Among other changes, this Eligibility Changes. The eligibility requirements will include an adjustment to reflect that UC has of the new Cal Grant program differ in several adopted higher systemwide charges than originally ways from those of the current program. First, assumed—$13,752 instead of $13,628. The whereas the current program has its own income administration is expected to update its Cal Grant and asset ceilings, the new program has the spending levels at the May Revision accordingly. same income ceilings as the federal Pell Grant program is to have beginning in 2024-25. The CAL GRANT REFORM new Cal Grant income ceilings generally are lower Below, we first provide background on the than the current ones. (For example, the income Cal Grant reform provisions in the 2022-23 ceiling for a dependent student with married budget agreement. Then, we provide an update parents in a family of four under the new program is on Cal Grant reform under the Governor’s expected to be approximately $76,300 in 2024-25.) budget, assess the implications, and make Second, whereas the current program provides associated recommendations. only a limited number of awards to older students attending the universities, the new program has no restrictions related to age or time out of high school at any segment. Third, whereas the current program generally requires students to have a www.lao.ca.gov 5 2023-24 BUDGET minimum GPA, the new program does not have a state now faces a budget problem. Moreover, under GPA requirement for community college students. the Governor’s budget, the state faces operating If the new program is triggered, these changes are deficits in the out-years (2024-25 through 2026-27). expected to lead to a net increase of 150,000 award Based on our budget projections, Cal Grant reform offers in 2024-25. is very unlikely to be triggered. Cal Grant Reform Also Involves Changes to Trigger Creates Significant Timing Problem Award Amounts and Coverage. For Cal Grant Within Admissions Process. Campuses generally recipients attending community colleges, the aim to send financial aid offer letters to students new program initially provides the same award shortly after they are admitted. This allows students amounts (a $1,648 access award for nontuition and their families to consider the amount of financial expenses) as the current program. Under the aid they will receive when deciding whether to go new program, however, these award amounts to college and which institution to attend. Students will be adjusted annually for inflation. For Cal considering four-year universities often must Grant recipients attending universities, the new make these decisions by May 1 of the preceding program involves more immediate changes to academic year, as this is traditionally the national award amounts and coverage. Whereas some deadline to accept admissions offers at selective first-year university recipients do not receive tuition institutions. Under the trailer legislation adopted last coverage under the current program, all university year, the state will determine in spring 2024 whether recipients receive tuition coverage under the Cal Grant reform is triggered. The legislation does new program. No university recipients in the new not specify an exact date for the determination, but program, however, receive Cal Grant nontuition the state often waits until after the May Revision is coverage. The segments are instead expected released in mid-May to make key budget decisions. to provide nontuition coverage through their This means that campuses likely would not know institutional aid programs. This policy change is whether Cal Grant reform has been triggered when substantial as roughly half of university recipients they begin sending financial aid offer letters to receive nontuition coverage under the current students and their families for 2024-25. Cal Grant program. Some Students Are Likely Not to Receive Accurate Award Information on Time. Until the Proposal Cal Grant reform trigger is determined, campuses Governor Proposes No Changes to Cal Grant will not be able to determine which students are Reform Provisions. The Governor’s budget does eligible for awards and what award amounts they not include any changes to the Cal Grant reform will receive in 2024-25. This will make it difficult for provisions included in last year’s budget agreement. campuses to provide clear and accurate information Consistent with that agreement, the new program on financial aid offers to students and their would be triggered on in 2024-25 only if sufficient families. Some students will likely need to make General Fund is available to support the action over enrollment decisions based on financial aid offers the next several years. that could change in the coming weeks, depending on the trigger determination. This is particularly Assessment problematic for students who would lose eligibility State Budget Condition Has Changed Since or receive smaller awards under Cal Grant Last Year’s Agreement. When it enacted the reform. These students might end up receiving 2022‑23 Budget Act, the state had a notable less financial aid than they had expected at the surplus. Even at that time, however, the state did time of their enrollment decision, if their campus not know whether it would be able to support cannot cover the difference with institutional aid or certain program expansions in the out-years. As a other sources. result, the state tied these program expansions to trigger language. As we discuss in The 2023-24 Budget: Overview of the Governor’s Budget, the 6 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Trigger Creates Administrative Challenges and disbursing awards to students. Given the state for CSAC and Campuses. Until the trigger is budget condition, proceeding with Cal Grant reform determined, both CSAC and campus financial aid in 2024-25 would involve difficult trade-offs. If the offices need to be prepared to administer either Legislature decides to support Cal Grant reform version of the Cal Grant program in 2024-25. beginning in 2024-25, it likely would need to redirect For example, they will need to implement the new funds (an estimated $365 million) from other rules in the software they use to administer financial ongoing purposes to avoid exacerbating the state’s aid programs, while also keeping the current projected out-year operating deficits. rules available. Campuses vary in their capacity Consider Cal Grant Reform Together With to implement these changes. At the community Other Potential Financial Aid Expansions. The colleges, for example, campuses have different Legislature has multiple options for expanding information technology systems and different financial aid. For example, it could increase Cal financial aid staffing levels. Any administrative Grant access awards in addition to or in place challenges at CSAC or the campuses could lead to of implementing Cal Grant reform. It also could delays in making award decisions and disbursing expand the MCS program, which we discuss in the awards to students. next section. These options would result in certain students receiving more assistance with their living Recommendations costs, which has been a legislative priority over the Determine Now Whether to Proceed With past few years. Whether the Legislature decides Cal Grant Reform. Under the budget provisions to proceed with financial aid expansion in the adopted last year, Cal Grant reform is very unlikely near term or wait until the state budget condition to be triggered in 2024-25. Moreover, even if Cal improves, we encourage it to weigh these various Grant reform were triggered, the timing of that options before deciding which approach to pursue. determination could significantly undermine the Notably, the various options impact different groups program’s effectiveness in the first year. In light of students and have different associated costs. of these factors, we recommend the Legislature For example, implementing Cal Grant reform is revisit the trigger. Rather than subjecting Cal Grant projected to benefit more low-income students, reform to a spring 2024 trigger determination, we older students, and community college students recommend the Legislature instead determine relative to the current program. The various options during this year’s budget process whether to also interact with one another. For example, proceed with Cal Grant reform in 2024-25. Making implementing Cal Grant reform would change the this determination one year in advance would allow number of access award recipients and thus the the state to send a clearer message to students cost of increasing those awards. Any Cal Grant and their families about the financial aid available augmentations at UC and CSU also would reduce to them. It would also give CSAC and the segments the cost of the MCS program at full implementation. more time to implement any changes effectively, reducing potential delays in making award decisions MIDDLE CLASS SCHOLARSHIPS In this section, we provide background on the Background MCS program, describe the one-time augmentation State Recently Revamped MCS Program. for the program under the Governor’s budget, The state created the original MCS program in assess the proposed approach, and make an the 2013-14 budget package to provide partial associated recommendation. tuition coverage to certain UC and CSU students. Originally, MCS awards were for students who were not receiving tuition coverage through the www.lao.ca.gov 7 2023-24 BUDGET Cal Grant program or other need-based financial MCS awards on average because they tend to aid programs. In the 2021-22 budget package, the receive more gift aid from other programs (such as state adopted a plan to revamp the MCS program Cal Grants, Pell Grants, and institutional aid). to focus on total cost of attendance rather than Current Funding Covers About One-Quarter tuition only. Under the revamped program, students of Full Implementation Costs. Last year, CSAC may use MCS awards for nontuition expenses, such estimated it would cost $2.6 billion to cover as housing and food. The state is implementing the 100 percent of each student’s remaining costs revamped program for the first time in 2022-23. under the MCS formula. The 2022‑23 Budget Act Award Amounts Are Now Calculated Based provided $632 million ongoing General Fund to on a Multicomponent Formula. As Figure 5 cover an estimated 24 percent of each student’s shows, calculating a student’s award amount under remaining costs. The budget agreement also the revamped program involves several steps. included intent to provide $227 million one-time First, CSAC accounts for other available gift aid, a General Fund in 2023-24 to increase coverage to student contribution from part-time work earnings, 33 percent of each student’s remaining costs in and parent contribution for dependent students that year. with a household income of over $100,000. It then Proposal deducts these amounts from the student’s total cost of attendance to determine whether the Governor’s Budget Provides One-Time student has remaining costs. Finally, it determines Augmentation for MCS Program. The Governor’s what percentage of each student’s remaining costs budget first adjusts MCS spending to $630 million to cover based on the annual state appropriation for ongoing General Fund in 2022-23 to align with the program. Under this formula, award amounts CSAC’s most recent cost estimates, which indicate vary widely among students, with each student’s program funding is sufficient to cover 26 percent award reflecting their costs and available resources. of each student’s remaining costs. This is the maximum coverage possible without going over the Revamped Program Serves Broader Group amount appropriated in the 2022‑23 Budget Act. of Students. The revamped MCS program Then, consistent with last year’s agreement, the generally maintains the income and asset ceilings Governor’s budget provides $226 million one-time of the original program, adjusted for inflation. The maximum annual household income to qualify for an MCS award Figure 5 is $201,000 for dependent students Middle Class Scholarships Are Calculated Using in 2022-23. However, the program Multicomponent Formula is now serving considerably more low-income students than before. Illustrative CSU Dependent Students Living Off Campus, 2022-23 This is because students receiving Example 1 Example 2 tuition coverage through Cal Grants Household Income $50,000 $130,000 or other financial aid programs are Cost of attendance $30,380 $30,380 newly eligible for MCS awards to Other federal, state, and institutional gift aida -11,035 — help cover nontuition expenses Student contribution from work earnings -7,898 -7,898 under the revamped program. 33% of parent contribution from federal EFCb — -8,528 As Figure 6 shows, more than half Student’s Remaining Costs $11,447 $13,954 Percentage based on annual appropriationc 26% 26% of students offered MCS awards in Award Amounts $2,976 $3,628 2022-23 have a household income a The amount also includes any private scholarships in excess of the sum of the student contribution of $50,000 or less, and more than and parent contribution. 80 percent have a household b Only applies to dependent students with a household income of more than $100,000. c State law requires CSAC to determine what percentage of each student’s remaining costs to cover income of $100,000 or less. each year based on the annual appropriation for the program. Under CSAC’s most recent estimates, Students with lower household the program is estimated to cover 26 percent of each student’s remaining costs in 2022-23. incomes, however, receive smaller EFC = expected family contribution and CSAC = California Student Aid Commission. 8 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET General Fund to increase program funding to Assessment $856 million in 2023-24. Based on CSAC’s cost MCS Implementation Challenges Have estimates, the proposed funding level would be Impacted Program Effectiveness in 2022-23. sufficient to cover the intended 33 percent of each As CSAC and campus financial aid offices student’s remaining costs. Figure 7 shows CSAC’s implemented the revamped MCS program for the estimate of recipients, spending, and average first time this year, several challenges emerged. awards by segment under the Governor’s budget. Figure 6 Revamped Program Serves Many Low-Income Students but at Lower Award Amounts 2022-23 80,000 $3,500 Offered Awardees Average Award 70,000 3,000 60,000 2,500 50,000 2,000 40,000 1,500 30,000 1,000 20,000 10,000 500 $0 or Less $1 $25,001 $50,001 $75,001 $100,001 $125,001 $150,001 $175,001 to to to to to to to to 25,000 50,000 75,000 100,000 125,000 150,000 175,000 201,000 Household Income Figure 7 Proposed Augmentation Would Increase MCS Average Award Notably Key Information by Segmenta Change From 2022-23 2021-22 2022-23 2023-24 Actual Revisedb Proposed Amount Percent Recipients CSU 44,481 184,240 197,137 12,897 7% UC 10,511 88,200 94,374 6,174 7 Totals 54,992 272,440 291,511 19,071 7% Spending (in Millions) CSU $74 $447 $608 $160 36% UC 32 183 248 66 36 Totals $105 $630 $856 $226 36% Average Award CSU $1,654 $2,429 $3,083 $654 27% UC 3,015 2,074 2,633 558 27 a Data reflect California Student Aid Commission (CSAC) estimates. b The Middle Class Scholarship (MCS) program was revamped beginning in 2022-23, with the new rules significantly affecting the number of eligible recipients and award amounts. www.lao.ca.gov 9 2023-24 BUDGET In spring 2022, while students were considering of their cost of attendance, using one-time funds their admissions offers, CSAC did not have the for ongoing grant programs has key drawbacks. necessary data to estimate MCS award amounts For students and their families, receiving a certain under the new formula. As a result, students and amount of aid in one year can create an expectation families were not notified of their award amounts in of receiving a similar amount in future years. With time for it to influence their enrollment decisions or the one-time MCS augmentation, however, students their financial planning around covering college costs. would receive more aid in 2023-24 only to have (CSAC did, however, send a general notification their award amounts decrease when the funds are to students considering a UC or CSU campus to removed the following year. This arrangement could inform them of their potential eligibility for an MCS create an unexpected financial strain for continuing award.) After CSAC began processing award offers students in 2024-25. Using one-time funds for a in September, further delays affected when students temporary increase in aid also creates inequities received payments. For example, the segments among student cohorts, with incoming students needed time to implement changes to the software in 2024-25 receiving less aid than the students their campuses use to administer financial aid before them. programs. UC reports its campuses disbursed One-Time MCS Augmentation Also Will Create fall-term awards from October through December, Out-Year State Cost Pressures. To avoid reducing while CSU reports its campuses disbursed fall-term aid for students, the state likely would face significant awards the following January. As a result of this pressure to retain the higher award levels in 2024-25. timing, the awards were not yet available as students This could lead to difficult trade-offs, particularly as and families began incurring costs for the fall term. the state is facing a projected operating deficit that Implementation Could Go More Smoothly in year. These trade-offs could be heightened because 2023-24, but Some Challenges Remain. Some of the Legislature is also interested in implementing a the MCS implementation challenges that CSAC and significant expansion to the Cal Grant program in campus financial aid offices experienced in 2022-23 that year. are expected to ease with time. For example, the Recommendation disbursement process will likely go faster next year, now that the segments have made the necessary If Expanding MCS Program, Adopt Ongoing changes in their financial aid management software. Funding. As we discuss in the “Cal Grants” section However, CSAC and the segments indicate that of this brief, we recommend the Legislature first other challenges could persist under the current weigh all its options for expanding student financial program structure. One notable challenge is that aid—across both the Cal Grant and MCS programs. MCS award amounts often need to be adjusted If the Legislature chooses to proceed with expanding throughout the year. These adjustments may happen the MCS program, we recommend it designate for various reasons, including to reflect any new gift ongoing funding for this purpose. Compared to the aid a student receives (such as merit scholarships one-time funding included in the Governor’s budget, or emergency grants), to comply with certain federal ongoing funding would provide greater certainty financial aid packaging requirements, or to keep to students and families about the financial aid MCS spending within the annual appropriation. available to them, while also better reflecting the cost These adjustments create significant workload for pressures associated with expanding aid in any given CSAC and campus financial aid offices. Moreover, year. Given the state budget condition, however, they create frustration and potential hardship among increasing ongoing MCS funding in 2023-24 would students, particularly when award amounts are involve difficult trade-offs. To avoid exacerbating reduced partway through the year. CSAC and the the state’s projected out-year operating deficits, the segments are exploring legislative changes to simplify Legislature would likely need to redirect funds from program administration. other ongoing purposes to support any ongoing MCS expansion. In the meantime, we recommend One-Time MCS Augmentation Has Key the Legislature reject the $226 million in one-time Drawbacks for Students. Though the proposed MCS funding and count this toward its budget one-time MCS augmentation would help those solutions in 2023-24. college students enrolled in 2023-24 cover a portion 10 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET GOLDEN STATE EDUCATION AND TRAINING GRANTS In this section, we provide background on the Program Is Supported by One-Time Golden State Education and Training Grant program, General Fund. The 2021‑22 Budget Act provided describe the Governor’s proposal to delay funding for $500 million one time for the program, initially this program, assess that proposal, and provide an consisting of $472.5 million federal American associated recommendation. Rescue Plan Act funds and $27.5 million General Fund. However, the 2022‑23 Budget Act authorized Background the administration to swap the federal funds for State Has Extensive Workforce Development General Fund, bringing the General Fund amount System. California’s public higher education to $500 million. This fund swap was intended to segments are part of this system. The community maximize flexibility in program administration and colleges provide workforce education and training reporting. Current law requires CSAC to report as part of their primary mission, while the universities to the Legislature by December 31, 2023 on the also provide programs that prepare students for number of grants provided under the program. careers. Outside of higher education, many other Proposal state and local agencies also provide services to job seekers. Notably, under the federal Workforce Governor Proposes Delaying Bulk of Program Innovation and Opportunity Act (WIOA), California has Funding. As a budget solution, the Governor a network of local workforce development boards. proposes to delay $400 million of the $500 million These boards operate one-stop centers providing in program funding from 2021-22 to later years. various job services, including training benefits. The Specifically, the Governor proposes to provide state maintains a list of where workers may use these $200 million in 2024-25, $100 million in 2025-26, WIOA-funded training benefits, called the Eligible and $100 million in 2026-27. The administration Training Provider List (ETPL). In addition to public suggests this budget approach aligns more closely higher education institutions, the ETPL includes with the actual pace of program spending. The various other providers, such as private career administration does not expect the proposal to colleges, adult schools, and trade associations. have any programmatic impact. Given that program State Created New CSAC Program to Help spending would continue through 2026-27, the Workers Displaced by Pandemic. The 2021-22 Governor also proposes trailer bill language budget package created the Golden State changing the deadline for CSAC to report on grants Education and Training Grant program at CSAC. from December 31, 2023 to September 30, 2027. The program provides one-time grants of up to Assessment $2,500 to individuals who lost employment due to Proposed Approach Contributes to State’s the pandemic and were not already enrolled in an Out-Year Budget Deficits. Although the education or training program. To qualify for the Governor’s proposed budget solution reduces program, individuals must meet the income and asset near-term spending by $400 million General Fund, criteria associated with a Cal Grant A award. (For it does so by shifting those costs into the out-years. example, in 2022-23, the income ceilings are $42,800 In doing so, it contributes to projected operating for a single independent student and $116,800 for a deficits in 2024-25 through 2026-27. As a result, student in a family of four.) The program is intended the state would need to find additional solutions to to help grant recipients cover the cost of enrolling at balance the budget in those years. CCC, CSU, or UC or obtaining training from another provider on the ETPL that meets certain performance Underlying Need for Program Has outcomes. Specifically, other providers on the Diminished. The state created the Golden State ETPL must demonstrate that the majority of training Education and Training Grant program to address participants have obtained living-wage employment a spike in job losses during the pandemic. Many of within one year of program completion. these job losses were in close-contact industries— such as personal care services, accommodations www.lao.ca.gov 11 2023-24 BUDGET and food services, and entertainment and Program Has Been Costly to Administer. recreation—that tend to employ workers with lower CSAC has incurred relatively high start-up costs education levels. The program was intended to for this program. As of January 2023, CSAC had help these displaced workers pursue additional encumbered or spent $7.2 million for program education and training. Since the height of the administration and marketing, with the majority pandemic, however, the labor market has improved going toward an external contract to promote significantly. Whereas the state unemployment the program to prospective applicants. While rate peaked at 16 percent in May 2020, it is these administrative costs remain within the down to 4.1 percent as of December 2022. This statutory allowance ($15 million), they account is comparable to pre-pandemic lows. Moreover, for over one-third of total program spending to because the labor market has been very favorable date. The program’s high administrative costs are for people looking for jobs, displaced workers are partly because CSAC is working with a new set more likely to have the option to find other jobs of potential beneficiaries—specifically, displaced rather than returning to school. (The tight labor workers not yet connected to higher education. market has been a key factor contributing to steep As a result, CSAC is spending a relatively high declines in community college enrollment over the amount for marketing. In addition, administrative past couple of years.) costs are high because CSAC is required to work Program Is Reaching Far Fewer Recipients with a new set of training providers—specifically, Than Intended. Of the $500 million initially ETPL providers that are ineligible for the traditional appropriated for the program, $485 million was financial aid programs that CSAC administers. reserved for grants (with the remainder for program CSAC has dedicated staff time to establishing administration and outreach). The $485 million is processes for working with these providers for sufficient to provide grants to 194,000 recipients, the first time. assuming each recipient gets the maximum grant. Recommendation As of January 2023, only about 5,000 recipients As Budget Solution, Recommend had received grants at a total cost of $12.5 million Discontinuing Program and Removing (2.6 percent of the available funding). Remaining Funds. Given the above considerations, Other Programs Are Available to Support we recommend the Legislature discontinue the Training for Displaced Workers. Separate Golden State Education and Training Grant program from this program, displaced workers have at the end of the current year and remove any various other options for affordable education or remaining funding at that time. Based on program training. Community colleges provide noncredit spending to date, we estimate roughly $470 million adult education courses at no charge, while in one-time General Fund would remain unspent at also providing full tuition waivers for students the end of 2022-23. Removing these funds would with financial need to take credit courses. Many provide an estimated $70 million in immediate students with financial need are also eligible for solution beyond the Governor’s budget. It would federal and state financial aid—including Pell also reduce spending by an additional $400 million Grants and Cal Grants—to help with their education in the out-years, thereby improving the state’s and living costs. Notably, Cal Grant C awards are out-year budget condition. Under this approach, available in career technical education programs as the Legislature could retain the reporting deadline short as four months. Individuals can also access relating to the number of grants awarded that is in federally funded job services, including training current law (December 31, 2023), as the program from providers on the ETPL, through one-stop would end prior to that date. job centers. 12 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET GOLDEN STATE TEACHER GRANTS In this section, we provide background on It also expanded eligibility to recipients pursuing a the Golden State Teacher Grant program, pupil personnel services credential, such as school describe the Governor’s proposed trailer counseling, social work, or school psychology. In bill language making various changes to the contrast to most other state financial aid programs, program, assess those changes, and provide this program does not have financial eligibility associated recommendations. criteria (such as an income ceiling). State Appropriated Five Years of Program Background Funding in 2021-22. Although the program was California Has Teacher Shortages in Certain created in 2019-20, the original appropriation Subject Areas and Schools. Over the years, was rescinded in 2020-21 to address a projected some school districts have experienced challenges budget deficit stemming from the pandemic. In that finding credentialed teachers. These challenges year, the state provided a small amount of federal have been concentrated in certain subject areas funding for a narrower version of the program and schools. The state has identified persistent focused on special education. Then, in 2021-22, teacher shortages in special education, science, the state provided $500 million one-time General and math. Additionally, urban schools and rural Fund for the program. Trailer legislation authorized schools in low-income areas tend to experience CSAC to spend $7.5 million (1.5 percent) of these greater difficulties with staffing and are more likely funds on program administration. The remaining than other schools to hire underprepared teachers. amount was to be spread evenly over five years, Although these challenges are long-standing, equating to approximately $98 million annually teacher shortages have worsened since the start through 2025-26. of the pandemic, which prompted teachers to leave State Is Expanding Early Education the workforce at accelerated rates. Programs. The 2021-22 budget agreement State Recently Created Grant Program for included plans to gradually expand TK to all Prospective Teachers. In the 2019-20 budget four-year olds. This expansion will result in greater package, the state created the Golden State demand for early educators. The state requires Teacher Grant program administered by CSAC. early educators to meet certain qualifications. This is one of several initiatives the state created Many positions, including in the State Preschool in recent years to address teacher shortages. program, require a child development permit. The program provides grants of up to $20,000 to The state offers six types of child development students in professional preparation programs permits, ranging from assistant permit (requiring six leading to preliminary teaching credentials who units of relevant coursework) to program director commit to a certain service requirement. Under permit (requiring a bachelor’s degree or higher). current law, the service requirement involves Beginning in August 2023, TK teachers also working for four years at a “priority school”—defined must have at least 24 units of child development as a school where at least 55 percent of students coursework or a child development permit, in are low-income, English learners, or foster youth. addition to the current requirements of a bachelor’s Originally, recipients were also required to commit degree and elementary school teaching credential. to teaching in certain subject areas—special In 2021-22, the state provided $100 million one-time education; science, technology, engineering, and Proposition 98 General Fund to increase the math; bilingual education; elementary school; number of highly qualified State Preschool and and transitional kindergarten (TK). However, the TK teachers. 2022-23 budget package expanded eligibility to recipients who agree to teach in any subject area. www.lao.ca.gov 13 2023-24 BUDGET Proposal process payments in the coming months, it is likely to spend not only the $98 million available for grants Governor Proposes Changing Service in 2022-23, but also some or all of the remaining Requirement for Grant Recipients. The proposed funds from 2021-22. CSAC further projects that it trailer bill language would make two changes to will fully spend the $500 million allocation before the current requirement for Golden State Teacher the end of the five-year period. This suggests no Grant recipients to commit to working for four years further eligibility expansions are needed to ensure at a priority school. First, it would allow recipients sufficient demand for the program. Moreover, to instead commit to working for four years at any further eligibility expansions could lead demand to school, beyond only priority schools. Second, for exceed available funding. The proposed trailer bill recipients who still choose to work at a priority language does not specify how CSAC is to prioritize school, the proposed language would reduce among applicants in this event. the length of their service requirement from four years to three years. The administration indicates Proposed Changes Would Likely Reduce these changes are intended to ensure sufficient Benefits to Priority Schools. The current demand for the program, while also maintaining service requirement is designed to address the some incentive for grant recipients to teach at a disproportionate staffing challenges at priority priority school. schools. The proposed trailer bill language would reduce the program’s effectiveness in meeting Governor Proposes Expanding Eligibility this objective in two ways. First, it would reduce to Certain Child Development Permits. The the number of years that recipients are expected proposed trailer bill language would also expand to work at a priority school from four years to program eligibility to students pursuing certain three years. Second, it would allow recipients to child development permits—specifically for master instead complete their service requirement at a teachers, site supervisors, and program directors. school that is not on the priority list. To the extent These permits are required for nonentry-level, that recipients choose this option, the program’s supervisory positions within State Preschool. benefits would be redistributed from priority To qualify for a grant, students pursuing these schools to higher-income schools that have less permits must be concurrently pursuing a bachelor’s acute staffing challenges. Although the program degree. (Students pursuing required coursework or might still support the expansion of the teacher child development permits for assistants, associate workforce overall, its impact would not be as teachers, and teachers would remain ineligible targeted toward the areas of greatest need. for grants.) Grant recipients could complete their associated service requirement at any elementary Proposed Changes Do Not Effectively school or at a state or federally funded preschool Address Early Educator Workforce Needs. program. The administration indicates these Though school districts will need more early changes are intended to address early educator educators over the next few years, the Governor’s workforce needs. proposed trailer bill language is not likely to be an effective way to address this objective. Assessment The proposed requirement that recipients Program Demand Is Robust Under Current concurrently pursue a bachelor’s degree with their Eligibility Requirements. In 2021-22 (the first permit would exclude current elementary school of the five years covered by the General Fund teachers returning to school to complete additional appropriation), CSAC spent only $42 million of the child development coursework necessary to teach $98 million available for grants. Program demand, in a TK classroom. The proposed language also however, has increased notably following the excludes individuals seeking coursework and significant eligibility expansions enacted in the entry-level child development permits to teach in 2022-23 budget package. In 2022-23, CSAC has State Preschool. More broadly, it is unclear what is spent $90 million on grants as of January. Given the added value of this proposal relative to current CSAC will continue to receive applications and early educator workforce programs that have less 14 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET restrictive eligibility requirements. Those other Recommendation programs could potentially be more effective ways Reject Proposed Eligibility Expansion to address the objective of expanding the early and Change to Service Requirement. Given educator workforce. the above considerations, we recommend the Proposed Changes Could Make Program Legislature reject the Governor’s proposed trailer Costlier to Administer. The proposed program bill language changing the Golden State Teacher changes would have some administrative costs. Grant program eligibility and service requirement. CSAC would need to notify a new set of preparation Based on CSAC’s projections, demand likely is programs that their students now qualify for grants. sufficient under the current program structure to CSAC would also need to track grant recipients fully spend grant funds by the expenditure deadline across a broader set of schools to monitor (and possibly sooner). Moreover, expanding the whether the service requirement was being met. service requirement to include non-priority schools Moreover, having two different lengths of service undermines the primary program objective of requirements (three years at a priority school versus supporting schools facing the most acute teacher four years at all other schools) could also increase shortages. The Governor’s proposal also is not well monitoring costs. In addition, CSAC would need tailored to early educator workforce issues. A more to implement the new grant rules in the software direct approach would be to ask the California system it uses to administer financial aid programs. Department of Education for an update on the Although incurring additional administrative costs state’s recent initiative to increase the number of is sometimes necessary, higher administrative highly qualified State Preschool and TK teachers. costs are harder to justify when proposed program To the extent this initiative is proving to be effective, changes are not warranted. the Legislature could increase funding for the initiative depending on its other budget priorities. STATE OPERATIONS In this section, we begin by providing background About 18 Percent of Positions Are Currently on CSAC’s state operations. We then assess the Vacant. As of January 2023, CSAC reports that Governor’s proposed augmentations for human 25.5 (18 percent) of its permanent positions resources, cybersecurity, and high school toolkits. were vacant. This is somewhat higher than the We end by discussing a state operations issue statewide average vacancy rate, which has ranged relating to Cal Grant reform implementation and other between 10 percent and 15 percent over the past potential financial aid expansions. decade. CSAC indicates that it is actively working to fill most of its vacant positions, with 19 of these Background positions in various stages of the recruitment and CSAC Is Mid-Sized State Agency. Like other hiring process. state agencies, CSAC spends a majority of its state Human Resources operations budget on staffing. In 2022-23, CSAC has 145.5 authorized permanent positions. These Governor’s Budget Funds One New Human positions span eight divisions, the largest of which Resources Position. The Governor’s budget are Program Administration and Services, Information provides $121,000 ongoing General Fund for one Technology Services, and Fiscal and Administrative Associate Personnel Analyst position. The position Services. Since 2017-18, the number of authorized would support recruitment, hiring, onboarding, permanent positions at CSAC has increased by and other human resources activities. 23 positions (19 percent). Most of the positions added over the past five years were to address increased workload linked to financial aid program expansions. www.lao.ca.gov 15 2023-24 BUDGET Proposed Human Resources Position Is High School Toolkits Reasonable, Recommend Approving. In recent Governor’s Budget Provides Ongoing years, as CSAC’s overall staffing has expanded, Funding for High School Toolkits. The 2021-22 its human resources workload has also grown. budget package created a new requirement for CSAC currently has five permanent positions in school districts to verify that all high school seniors its human resources office. In 2021-22, it worked complete a college financial aid application, unless with the Department of Finance to administratively the student submits an opt-out form or receives an establish an additional limited-term position in its exemption from the district. The Governor’s budget human resources office to address recruitment, provides $120,000 ongoing General Fund to CSAC hiring, onboarding, and other related needs linked to distribute toolkits to high schools to support to recent program expansions. The Governor’s them in fulfilling the requirement. CSAC indicates proposal would effectively convert the limited-term these toolkits would include various materials that position into an ongoing one. CSAC has provided provide information on and promote awareness of a reasonable list of job duties and associated student financial aid—including resource guides, workload justifying the proposed position. posters, postcards, notepads, and stickers. We recommend approving the position. CSAC intends to send these toolkits to high schools that have lower financial aid application Cybersecurity completion rates. Governor’s Budget Funds Two New State Recently Expanded CSAC’s High Cybersecurity Positions and Related Support. School Outreach Efforts. The 2022‑23 Budget The Governor’s budget provides $469,000 ongoing Act provided several augmentations to CSAC to General Fund and $962,000 one-time General Fund expand high school outreach around financial aid. to improve cybersecurity at CSAC. The ongoing First, it provided an increase of $2.4 million ongoing funds are primarily for two Information Technology General Fund for the California Student Opportunity Specialist positions. The one-time funds are and Access Program (Cal-SOAP), which provides primarily for consulting services to assess CSAC’s financial aid information to low-income middle information technology systems for cybersecurity school students and high school students. These risks and develop a roadmap to address those funds are to support Cal-SOAP activities in the risks. In addition, some ongoing and one-time funds Inland Empire. Second, it provided $500,000 would go toward security software and training. one-time General Fund to expand the Cash for Proposed Cybersecurity Augmentations Are College Program, which provides workshops to Reasonable, Recommend Approving. CSAC help students and their families complete financial maintains a large and growing volume of sensitive aid applications. Third, it added three new positions data on students and their families. In recent at CSAC to support school districts in implementing years, CSAC’s cybersecurity needs have increased the new financial aid application requirement. because of various factors, including updated state State Is Also Funding Other High School security standards, the migration of systems to the Outreach Efforts. The 2022‑23 Budget Act cloud, and the expansion of telework during the also included augmentations for other agencies pandemic. Currently, CSAC has only one position that could support the implementation of the dedicated to cybersecurity. The administration new financial aid application requirement. and CSAC have provided a reasonable list of job Most notably, it provided $9.3 million ongoing duties and associated workload justifying the two Proposition 98 General Fund and $4.4 million proposed positions. They also have provided a one-time Proposition 98 General Fund to the reasonable plan for the proposed one-time funds. California Department of Education to support We recommend approving all components of school districts’ participation in the California the proposal. College Guidance Initiative (CCGI). This initiative provides online tools to help middle school students and high school students with various aspects 16 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET of college planning, including the financial aid Cal Grant Reform Implementation process. CCGI’s financial aid planning tool provides Governor’s Budget Includes Ongoing Funding students with financial aid lessons and application for Cal Grant Reform Implementation. The state assistance. (The Governor’s budget proposes an provided CSAC with $500,000 one-time General additional $3.9 million Proposition 98 General Fund Fund in 2022-23 to begin implementing Cal Grant to increase CCGI personnel and further support reform. The Governor’s budget does not remove CCGI operations and ramp-up activities.) these one-time funds. The administration indicates Proposed High School Toolkits Lack Strong it will determine at the May Revision whether to Justification, Recommend Rejecting. As retain these funds on an ongoing basis to address mentioned above, the state took several actions CSAC’s workload needs. last year intended to help high schools in fulfilling Align Administrative Funding for CSAC With the new financial aid application requirement. Program Expansions. As we discuss in the “Cal For example, school districts can already leverage Grants” and “Middle Class Scholarships” sections the existing financial aid resources within CCGI of this brief, the Legislature faces key decisions to increase awareness of student financial about whether and how to proceed with financial aid opportunities and assist students with the aid program expansions in the near term. These application process. It is too soon to determine decisions will in turn impact CSAC’s administrative whether gaps or challenges remain for high workload. For example, if the Legislature decides schools. Moreover, the administration has not to proceed with Cal Grant reform, then ongoing demonstrated that the proposed toolkits are likely administrative funding for CSAC to implement to be an effective way to help high schools on the larger program could be warranted. On the an ongoing basis. The proposal also lacks key other hand, if it decides not to proceed with Cal details, including the number of toolkits that could Grant reform given the state budget condition, be provided at the proposed funding level. Based then ongoing administrative funding would not on these concerns, we recommend rejecting be needed. We recommend withholding action the Governor’s proposal to provide $120,000 on administrative funding for CSAC to implement ongoing General Fund for high school toolkits. financial aid expansions until later in the budget The Legislature could reconsider this proposal in a process, when decisions have been made about future year if the administration were to return with which, if any, expansions to pursue. At that time, the stronger justification. Legislature could align any administrative funding for CSAC with those program expansion decisions. www.lao.ca.gov 17 2023-24 BUDGET 18 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET www.lao.ca.gov 19 2023-24 BUDGET LAO PUBLICATIONS This report was prepared by Lisa Qing, with contributions from Jackie Barocio, and reviewed by Jennifer Pacella and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that 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 website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, California 95814. 20 LEGISLATIVE ANALYST’S OFFICE