The 2026-27 Budget: California Community Colleges

analysis full 2026-27 BUDGET The 2026-27 Budget: California Community Colleges GABRIEL PETEK | LEGISLATIVE ANALYST | MARCH 2026 SUMMARY Brief Covers the California Community Colleges (CCC). This brief analyzes the Governor’s Proposition 98 spending proposals for CCC. It focuses on apportionments, enrollment growth, Calbright College, and several smaller proposals involving ongoing funding. Recommend Prioritizing Apportionments Cost-of-Living Adjustment (COLA). The Governor’s largest ongoing CCC proposal is $241 million to support a 2.41 percent COLA for apportionments. This general purpose funding would help districts cover core operating costs while also providing flexibility to address local conditions. The Legislature will receive an updated COLA rate in the spring. We recommend prioritizing this proposal for available Proposition 98 funding at that time. Recommend Funding Enrollment Growth Beginning in 2026-27. The Governor’s budget provides $55 million for additional systemwide enrollment growth in 2025-26, increasing the current-year target from the enacted level of 0.57 percent to 1.57 percent. The Governor also proposes $32 million ongoing for further growth of 0.5 percent in 2026-27. We recommend prioritizing funding enrollment growth, as about half of districts are exceeding their current targets and districts could continue to see enrollment pressure from factors including regional population growth, elevated unemployment rates, and dual enrollment expansion efforts. Depending on available resources, the Legislature could consider supporting a higher or lower amount of growth than the Governor proposes. Regardless, we recommend funding growth beginning in 2026-27, without revising the 2025-26 growth target. The state sets growth targets based in part on the amount of enrollment it has deemed it can afford, and covering the higher costs when districts exceed those targets could incentivize districts to disregard the state’s budget constraints. Recommend Bringing Calbright Onto Student-Centered Funding Formula (SCFF). The Governor’s budget proposes a $38 million ongoing increase for Calbright College, bringing its ongoing funding level to $53 million. Over the past seven years, this statewide online college has made progress toward startup milestones related to enrolling students, designing programs, and receiving accreditation. Nonetheless, questions remain about whether it is serving its target student population in a cost-effective way. Moreover, the administration has not provided a clear rationale for its proposed funding level for Calbright or linked that funding to any specific expectations. As an alternative, we recommend transitioning Calbright to SCFF by 2027-28. This approach would link Calbright’s funding to enrollment expectations, provide a known funding rate per student, and treat Calbright consistently with other districts. During the transition, the Legislature could consider providing $28 million one time (instead of the proposed $38 million ongoing) in 2026-27 if it wishes to sustain Calbright’s current spending level. Recommend Rejecting Three Smaller Proposals. The Governor proposes $14 million ongoing for Healthy School Food Pathways, a set of training programs for K-12 school food service staff operated by a nonprofit organization. We recommend rejecting this proposal because the programs have unusually high state costs, mixed student outcomes, and a large amount of unspent funds. In addition, the Governor proposes another round of funding for two CCC initiatives supported in last year’s budget—the Common Cloud Data Platform ($36 million one time and $5 million ongoing) and credit for prior learning ($35 million one time and $2 million ongoing). We think both of these proposals are premature, as last year’s funding remains available to support activities over the next couple of years and the outcomes of those activities are not yet known. www.lao.ca.gov 1 analysis full 2026-27 BUDGET INTRODUCTION Brief Focuses on CCC. The CCC system is certain occupational fields. This brief analyzes one of California’s three public higher education the Governor’s 2026-27 Proposition 98 budget segments. The system consists of 115 colleges proposals for CCC. We begin by describing the operated by 72 locally governed districts Governor’s overall budget plan for CCC. The next located throughout the state, plus one statewide seven sections of the brief focus on the Governor’s online community college. The colleges offer proposals relating to (1) apportionments, (2) select a breadth of academic programs, including categorical programs, (3) enrollment growth, lower-division transferable coursework, career (4) Calbright College, (5) Healthy School Food technical education, precollegiate basic skills Pathways, (6) the Common Cloud Data Platform, instruction, and baccalaureate degrees in and (7) credit for prior learning. OVERVIEW In this section, we describe the Governor’s overall Proposition 98 Per-Student Funding Grows budget plan for CCC and provide a few overarching Under Governor’s Budget. Under the Governor’s comments about it. budget, Proposition 98 funding per student at CCC would be $12,930 in 2026-27—an increase of Governor’s Budget Plan $1,007 (8.4 percent) over the revised 2025-26 level. Total CCC Funding Is $20 Billion in 2026-27 Per-student funding would reach an all-time high in Under Governor’s Budget. This reflects a unadjusted dollars. Adjusting for inflation, however, 7.1 percent increase over the revised 2025-26 level. the 2026-27 level would be below the 2024-25 peak As Figure 1 shows, $14 billion (71 percent) of CCC by about $800 per student. support in 2026-27 would come from Proposition 98 Governor Has Several Proposition 98 funds. Under Proposition 98, the state calculates Spending Proposals for CCC. As Figure 2 on an annual “minimum guarantee” for school and page 4 shows, the Governor proposes a total of community college funding based on certain inputs, $1.2 billion in new Proposition 98 spending for including General Fund revenues. This funding CCC across the budget window (2024-25 through covers community colleges’ main operations. An 2026-27). Of this amount, $363 million is for additional $803 million in non-Proposition 98 General ongoing augmentations and $857 million is for Fund would cover other costs, including debt service one-time purposes. The largest ongoing proposal is on certain state facilities bonds, a portion of faculty a 2.41 percent COLA for apportionments. Notably, retirement costs, and Chancellor’s Office operations. the Governor also proposes ongoing funding to Beyond State Funds, CCC Receives Support support 0.5 percent systemwide enrollment growth From Various Other Sources. Much of CCC’s in 2026-27, on top of an additional 1 percent remaining funding comes from enrollment fees, other enrollment growth above the enacted level in student fees, and various local sources (such as 2025-26. The largest one-time proposal is to repay revenue from facility rentals and community service a deferral adopted in last year’s budget. programs). The Governor proposes no increase to Governor’s CCC Budget Plan Includes enrollment fees for 2026-27. Since summer 2012, Proposition 98 Reserve Funding. The CCC enrollment fees have been $46 per unit, or Proposition 98 Reserve is an account designated $1,380 for a full-time student taking 30 semester for school and community college programs. units per year. Community college fees in California Under the Governor’s budget, a mandatory remain the lowest of any state and significantly below withdrawal from this reserve covers $44 million the average at other community colleges nationally in community college apportionments costs (and (about $5,300 in 2024-25). $363 million in school district costs) in 2026-27. 2 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Figure 1 Total CCC Funding Increases Under Governor’s Budget (Dollars in Millions Except Funding Per Student) Change From 2025-26 2024-25 2025-26 2026-27 Revised Revised Proposed Amount Percent Proposition 98 General Fund $9,794 $8,441 $9,371a $930 11.0% Local property tax 4,335 4,558 4,785 227 5.0 Subtotals ($14,129) ($12,999) ($14,156) ($1,157) (8.9%) Other State Other General Fund $625 $670 $803 $133 19.8% Lottery 300 308 308 — — Special fundsb 53 106 93 -13 -12.1 Subtotals ($979) ($1,084) ($1,205) ($120) (11.1%) Other Local Enrollment feesc $440 $440 $441 $1 0.3% Other local revenued 3,485 3,513 3,540 28 0.8 Subtotals ($3,925) ($3,953) ($3,982) ($29) (0.7%) Federal $457 $457 $457 — — Totals $19,489 $18,493 $19,799 $1,306 7.1% FTE studentse 1,096,150 1,090,231 1,094,809 4,578 0.4% Funding per studentf $12,889 $11,923 $12,930 $1,007 8.4 a Includes $44 million in withdrawals from the Proposition 98 Reserve. b Includes reimbursements. c The most recent data available is for 2024-25. Under the administration’s estimates, these amounts are held flat for 2025-26. For the budget year, the administration grew the current-year amount mainly to reflect proposed enrollment growth under the Governor’s budget. d Primarily consists of revenue from student fees (other than enrollment fees), sales and services, and grants and contracts, as well as local debt-service payments. e Reflects the administration’s estimates of budgeted FTE students. Estimates for 2025-26 and 2026-27 reflect proposed enrollment growth of 1.57 percent and 0.5 percent respectively, as well as other enrollment adjustments. f Reflects Proposition 98 funding, including reserve withdrawals, per budgeted FTE student. FTE = full-time equivalent. In addition to this mandatory withdrawal, the would need to pay in the future. State law does Governor’s budget also includes mandatory not specify what share of these funds would go deposits into the reserve in 2024-25 and 2025-26 to community colleges. If the Legislature were due to higher estimated capital gains revenue, as to allocate the funds in proportion to the current well as a discretionary deposit in 2025-26. After all split of Proposition 98 spending between the two of these actions, the reserve would have a balance segments, an estimated $608 million would go to of $4.1 billion at the end of 2026-27. community colleges. Governor’s Budget Creates Proposition 98 LAO Comments Settle-Up Obligation. As we discuss in The 2026-27 Budget: Proposition 98 Guarantee Underlying Revenue Estimates Have and K-12 Spending Plan, the Governor’s budget Downside Risk. The Governor’s estimates of the Proposition 98 minimum guarantee are based on appropriates $5.6 billion less for schools and revenue projections that do not account for the community colleges in 2025-26 than the estimated risk of a stock market downturn. As we discuss in minimum guarantee in that year. If revenues The 2026-27 Budget: Overview of the Governor’s meet the Governor’s estimates in 2025-26, this Budget, several signs suggest the stock market would create a $5.6 billion settle-up obligation to is overvalued and at elevated risk of a downturn. schools and community colleges that the state www.lao.ca.gov 3 analysis full 2026-27 BUDGET will expire in 2027-28, freeing up Figure 2 funds that could help the state Governor Proposes New CCC Ongoing and accommodate a possible decrease One-Time Spending in the minimum guarantee before 2024-25 Through 2026-27 (In Millions) having to reduce programs. Under the Governor’s budget, the amount Ongoing Spending of the cushion is $241 million, COLA for apportionments (2.41 percent) $241 equating to 1.7 percent of Calbright College 38 Proposition 98 spending on the Enrollment growth (0.5 percent) 32 COLA for select categorical programs (2.41 percent)a 31 community colleges in 2026-27. Healthy School Food Pathways program 14 (This amount reflects the use of Common Cloud Data Platform 5 $286 million in ongoing funds for Credit for prior learning 2 one-time spending, partly offset by Subtotal ($363) the use of $44 million in one-time One-Time Spending Proposition 98 Reserve funds for 2025-26 deferral repayment $408 Deferred maintenance 121 ongoing program costs.) This is a Student support block grant 100 moderately sized cushion, relative Higher 2025-26 apportionments costs 89 to those included in previous Additional 2025-26 enrollment growth (1.0 percent)b 55 budgets. If the Legislature uses the Common Cloud Data Platform 36 Credit for prior learning 35 Governor’s revenue estimates, we Higher apprenticeship costsc 13 recommend maintaining a cushion Subtotal ($857) of at least this size to mitigate Total Changes $1,220 the risk of future declines in the a Applies to the Adult Education Program, apprenticeship programs, CalWORKs student services, guarantee. This would be a helpful campus child care support, Disabled Students Programs and Services, Extended Opportunity Programs and Services, and mandates block grant. tool for managing volatility, though b Increases budgeted growth from the enacted 2025-26 level of 0.57 percent to 1.57 percent. The it would not on its own address the associated ongoing cost is built into apportionments in 2026-27. c Related and supplemental instruction costs for apprenticeship programs in 2024-25 and 2025-26 range of declines in the guarantee are higher than budgeted. that could potentially occur. COLA = cost-of-living adjustment. Recommend Using One-Time Funds to Build Budget If revenues were to fall short of the Governor’s Resiliency. Between the one-time projections in the budget year, the guarantee would cushion and upward revisions to the 2024-25 decrease by about 40 cents for each dollar of and 2025-26 minimum guarantee, the Governor’s lower revenue, leaving less capacity for community budget includes a significant amount of one-time college spending. We recommend the Legislature funding for CCC. The Governor uses these funds prepare for the possibility that the guarantee comes for various one-time purposes, including a deferral in lower than the Governor projects. Preparing repayment, deferred maintenance projects, a for such a scenario means being cautious about student support block grant, and prior-year and new commitments; building budget resiliency to current-year costs for apprenticeship related and protect existing programs; and identifying spending supplemental instruction (RSI). Of these proposals, proposals that the Legislature would be willing to we first recommend prioritizing the repayment of reduce, delay, or reject. the deferral adopted in last year’s budget. This CCC Spending Plan Contains a One-Time would restore the state’s community college Cushion. The Governor’s budget allocates apportionments payments to their regular schedule some ongoing 2026-27 Proposition 98 funds for and reduce future cost pressures. We recommend one-time spending at the community colleges. This prioritizing funding next for deferred maintenance budgeting approach creates a cushion that helps projects. The CCC system reports a $2.2 billion protect ongoing programs. The one-time spending deferred maintenance backlog. Addressing this 4 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET backlog could help avoid higher project costs Recommend Focusing Ongoing Spending in the future as well as potential programmatic on Core Programs. The remainder of this disruptions. Beyond these priorities, we think brief focuses on seven budget proposals that the proposed student support block grant is have ongoing spending components. (Some of reasonable. This block grant provides districts these proposals also have one-time spending with flexible funding they could use for a range of components.) The largest of these augmentations student services linked to local conditions. Lastly, is for an apportionments COLA and enrollment although we do not have major concerns with growth. We recommend prioritizing these proposals covering higher prior-year and current-year costs within available ongoing funding, as they help for apprenticeship RSI, we view this proposal districts cover core cost pressures while providing as a lower priority. The RSI program reimburses some flexibility to address local conditions. apprenticeship sponsors (typically employers The Governor also proposes smaller ongoing and labor unions) for a portion of their classroom augmentations for various targeted purposes, instruction costs. The state is not required to including Calbright College, the Healthy School increase funding for this program when costs Food Pathways program, the Common Cloud Data come in higher than budgeted, and it is unclear Platform, and credit for prior learning. We have if retroactive funding impacts the amount of concerns about each of these targeted proposals, instruction that sponsors choose to provide. as we discuss in later sections of the brief. APPORTIONMENTS In this section, we focus on general purpose funding for community college districts, which is known as “apportionments.” We begin this section Figure 3 by providing background on community college Bulk of District Spending districts’ core operating costs. We then explain how Is for Compensation the state provides funding for those costs. Next, District Operating Expenditures by Type, 2024-25ª we describe the Governor’s proposal to provide a COLA for apportionments, assess the proposal, Capital Outlayb and provide a recommendation. Cost Pressures Compensation Is Largest Community College Supplies, Materials, Operating Cost. Community college districts and Other use the bulk of their apportionment funding for employee compensation. As Figure 3 shows, salaries and benefits (including retirement benefits, Salaries health care benefits, workers’ compensation, and Benefits unemployment insurance) accounted for more than 80 percent of district spending in 2024-25. The remainder of district spending was for various other core operating costs, including insurance, utilities, software, equipment, and supplies. Staffing Levels Have Rebounded Since a Reflects spending from districts' main operating account. Pandemic. At the start of the pandemic, b Excludes spending on major capital projects. community college districts decreased their staffing levels in response to steep enrollment declines. www.lao.ca.gov 5 analysis full 2026-27 BUDGET Over the past three years, however, staffing has Because employer contribution rates for these gradually rebounded. As of fall 2024, districts two systems are set by their respective state employed about 66,100 full-time equivalent (FTE) boards, all community college districts statewide employees systemwide—up about 400 FTE are subject to the same rates. Districts’ pension employees (0.6 percent) from fall 2019. Staffing has costs have generally been increasing over time. somewhat outpaced enrollment, which decreased In 2014-15, districts’ employer contribution rate was by 0.3 percent during this period. Slightly more 8.9 percent of payroll for CalSTRS and 11.8 percent than half of total FTE employees systemwide of payroll for CalPERS. In 2025-26, those rates are in academic positions, including faculty and are up to 19.1 percent of payroll for CalSTRS and educational administrators. The remainder (known 26.8 percent of payroll for CalPERS. as “classified employees”) are in non-academic Districts Regularly Face Various Other positions, including many types of staff and Cost Pressures. Similar to the other education other administrators. segments, community college districts have faced Salary Decisions Are Made Locally. Most recent increases in costs for health benefits, community college employees are represented insurance, equipment, supplies, and utilities. by labor unions. Several unions represent faculty Health benefits are the largest of these remaining throughout the state, with the largest two being cost pressures. In the past few years, districts the California Federation of Teachers and the have faced greater pressure in this area than California Teachers Association. The California normal because premiums have been increasing School Employees Association is the largest union at historically high rates. District contributions for classified staff. Each community college district to employee health premiums are collectively negotiates with the local branches of these unions. bargained. Districts commonly cover a large Community college districts and their local unions share of the premium increases for their full-time make key compensation decisions, including employees. Coverage for part-time employees salary decisions, through collective bargaining. varies widely among districts. When districts In negotiating salary increases with their local provide benefits to part-time employees, they often unions, districts typically account for a number of cover a lower share of the premium increases. factors, including the COLA the state is providing Funding for apportionments, changes in housing and other costs for employees, salary competitiveness, and Community Colleges Rely Heavily on Funding the need to address non-salary cost pressures. From Apportionments. All 72 locally governed community college districts receive funding from Salaries Have Generally Increased With apportionments. Apportionments account for Inflation. Over the past five years, salaries for about 70 percent of total Proposition 98 CCC community college employees have generally funding. Based on February 2026 estimates from grown at rates similar to inflation, with some the Chancellor’s Office, districts are collectively variation by employee group. From fall 2019 to fall generating $10.1 billion in apportionment funding 2024, the systemwide average salary increased by in 2025-26. 25 percent for tenured and tenure-track faculty, while it increased by 20 percent for classified State Has Formula to Determine Districts’ support staff. For comparison, the California Apportionment Funding. Historically, districts consumer price index increased by an estimated received apportionment funding based almost 23 percent during this time. entirely on student enrollment. In 2018-19, the state adopted a new formula—SCFF. This formula Districts’ Pension Costs Also Have Been is intended to create stronger incentives for Rising. Community college academic employees colleges to enroll lower-income students and participate in the California State Teachers’ improve outcomes for them and students overall. Retirement System (CalSTRS), while non-academic Under SCFF, districts receive apportionment employees participate in the California Public funding for regular credit courses based on Employees’ Retirement System (CalPERS). three components: (1) a base allocation linked 6 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET to enrollment, (2) a supplemental allocation linked Based on best practices from the Government to low-income student counts, and (3) a student Finance Officers Association, the Chancellor’s success allocation linked to specified student Office recommends that districts maintain outcomes. These three components account for unrestricted reserves worth a minimum of about 70 percent, 20 percent, and 10 percent 16.7 percent (two months) of annual expenditures. of apportionment funding, respectively. Districts As Figure 4 shows, districts’ unrestricted reserves continue to receive apportionment funding for have increased over the past several years. noncredit courses, as well as credit courses Whereas unrestricted reserves totaled $2 billion for dual enrollment students and incarcerated (23 percent of expenditures) in 2019-20, they students, based entirely on enrollment. grew to $3.8 billion (34 percent of expenditures) Some Districts Receive Additional Funding in 2024-25. The increase in reserves over the past Through Certain Funding Protections. Each five years is likely the result of several factors— year, a district’s apportionment funding is based including significant increases in state funding, an on the highest of three amounts: (1) the amount influx of federal relief funds during the pandemic, calculated under SCFF, (2) the amount calculated and savings from lower staffing levels during under a funding protection called “stability,” and the pandemic. (3) the amount calculated under another funding Proposals protection called “hold harmless.” A district’s stability amount is its SCFF-calculated amount in Governor Proposes to Cover Higher the previous year, adjusted for any COLA provided Apportionments Costs in 2025-26. The Governor’s budget increases current-year by the state. Beginning in 2025-26, a district’s hold harmless amount is its total apportionment apportionment funding by $89 million funding in 2024-25, with no COLA adjustment. Proposition 98 General Fund, reflecting that apportionments costs are coming in higher than Based on February 2026 estimates from the projected at budget enactment. Under SCFF, Chancellor’s Office, 34 districts are receiving their apportionment costs can come in higher than SCFF-calculated amounts in 2025-26, 25 districts projected for a number of reasons, including are on stability (receiving a combined $76 million in higher low-income student counts, better student apportionment funding above their SCFF-calculated amounts), and 13 districts are on hold harmless (receiving a combined $86 million above Figure 4 their SCFF-calculated amounts). Community College Reserves Have Grown On average, apportionment funding Significantly Over Pre-Pandemic Levels per student is higher across Unrestricted District Reserves as Percent of Annual Operating Expenditures districts on hold harmless ($9,491) and districts on stability ($9,189), 40% compared to districts receiving 35 their SCFF-calculated amounts ($8,882). This is largely because 30 these funding protections provide 25 districts with more apportionment 20 funding than they would generate 15 based on their enrollment and 10 other factors. Systemwide Reserves 5 Continue to Increase. Community 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 college districts maintain local reserves to help manage revenue declines or unexpected costs. www.lao.ca.gov 7 analysis full 2026-27 BUDGET outcomes, or enrollment adjustments other than Providing a COLA for Apportionments Helps growth. (The $89 million excludes costs associated Districts Cover Cost Increases. Although the state with the Governor’s proposal to increase the is not statutorily required to provide a COLA for current-year growth target, which we discuss in apportionments, it has a long-standing practice of a later section.) Whether or not this proposal is doing so when Proposition 98 funds are available. approved, the current-year revisions carry forward (In contrast, the state is statutorily required to into ongoing apportionment costs in 2026-27. provide a COLA for the LCFF for school districts.) Governor Proposes COLA for Apportionments The Legislature has historically made this a top in 2026-27. The Governor’s budget includes CCC budget priority because it helps districts $241 million ongoing Proposition 98 General Fund address increases in their core operating costs and, to cover a 2.41 percent COLA for apportionments. in turn, maintain the quality of their instructional This is the same COLA rate the Governor proposes programs. Because districts have broad discretion for the Local Control Funding Formula (LCFF) for over how to spend apportionments, providing a school districts. COLA also gives districts the flexibility to address local spending priorities. Assessment Proposed COLA Rate Could Change by May. Covering Higher Apportionments Costs in The Governor’s proposed COLA rate is based on a 2025-26 Is Reasonable. Although the state is not federal price index that reflects the cost of goods and required to increase current-year apportionments services purchased by state and local governments. funding when costs come in higher than projected, Due to the fall 2025 federal government shutdown, providing such an increase is a reasonable way to some of the data typically used to estimate this help districts address their core operating costs. rate was not available in time for the Governor’s If the state does not provide an increase, then each budget this year. As a result, the proposed COLA district would see its apportionments prorated rate is more uncertain and potentially subject to downward to fit within the previously enacted funding larger changes than usual. Based on updated data level. Under the administration’s apportionments cost released in late February, we estimate the COLA estimates at the Governor’s budget, each district’s rate is 2.68 percent—slightly higher than estimated apportionments would be reduced by less than under the Governor’s budget. This higher rate would 1 percent. The administration typically updates its cost $27 million more than the amount included in apportionments cost estimates at the May Revision to the Governor’s budget. The federal government is reflect more recent data from districts. Any updates expected to release the last round of data used in the would in turn affect the amount of the current-year calculation in late April, in time to inform an updated funding increase proposed for apportionments. COLA rate at the May Revision. Districts Will Continue to Face Basic Cost Recommendation Increases in 2026-27. Similar to nearly all local and state entities, districts will likely face continued Prioritize Apportionments Proposals Within salary pressures in 2026-27. In addition, district Available Funds. We recommend the Legislature administrators report that health care premiums treat covering current-year apportionments costs are continuing to grow faster than normal. Districts and providing an apportionments COLA as priorities will see less pressure, however, from their pension for available funds. Prioritizing apportionments costs, as the employer contribution rate is projected helps districts address their core operating costs, to remain flat at 19.1 percent of payroll for CalSTRS while allowing them some flexibility in making their and decrease slightly to 26.4 percent of payroll spending decisions. We recommend deciding on for CalPERS (0.4 percentage points lower than in the COLA rate after better information is available 2025-26). Beyond these employee compensation this spring. By the May Revision, the Legislature will costs, districts generally are expecting increases in have finalized data on the price index typically used other costs, such as utilities and insurance. to calculate the COLA rate. At that time, it will also have better information on state revenues, which will in turn affect the amount of funding available for ongoing Proposition 98 augmentations. 8 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET SELECT CATEGORICAL PROGRAMS In this section, we focus on CCC categorical because it anticipated a significant budget shortfall programs. We first provide background on these due to the pandemic.) The state has also provided programs, next describe the Governor’s proposal to a COLA for certain other categorical programs in provide a COLA for a subset of programs, and then one or two of these years. Separate from providing raise an issue for legislative consideration. a COLA, the state sometimes provides other State Funds Many CCC Categorical funding increases to expand categorical programs. Programs. Whereas most CCC Proposition 98 For example, the state increased funding for the funding is for general purpose apportionments, Student Equity and Achievement Program by about 30 percent is for categorical programs $24 million (5 percent) in 2021-22 and another designated for specific purposes. In 2025-26, $25 million (5 percent) in 2022-23. the state is providing a total of $3.8 billion Governor Proposes to Provide a COLA for ongoing Proposition 98 General Fund for nearly Seven Categorical Programs. The Governor’s 50 CCC categorical programs. The largest of budget includes a total of $31 million ongoing these programs provide funding for certain Proposition 98 General Fund to provide seven types of instruction (such as adult education or CCC categorical programs with a 2.41 percent career technical education), student support, COLA. (As we explain in the “Apportionments” and financial aid. The remaining programs serve section, the proposed rate may change at the various purposes ranging from faculty support May Revision, after the data used to calculate to information technology. Our EdBudget table, the COLA is finalized.) These are the same seven California Community Colleges Categorical programs that have received a COLA in almost Programs, lists all of these programs and their every year since 2019-20. Figure 6 on the next associated ongoing funding level. page lists these programs and the cost of the Underlying Costs Tend to Grow Over associated COLA. More than half of the cost Time. As with apportionments, statute does is for the California Adult Education Program, not require the state to provide a COLA for any which supports precollegiate instruction at both CCC categorical program. Nonetheless, categorical community colleges and adult schools operated by programs tend to experience cost increases over school districts. time. The key cost drivers for some categorical Proposal Is a Reasonable Starting Point, programs are employee-related, with costs rising but Legislature Could Consider Other Options. as compensation increases. Some categorical Given that the Governor’s proposal includes programs also have enrollment-related cost drivers, many of the categorical programs the Legislature with costs rising as the number of students eligible has prioritized for a COLA in recent years, it is for the program increases. a reasonable starting point for 2026-27 budget State Has Provided Increases for Select deliberations. The Legislature could adopt the Categorical Programs. Historically, the proposal, or it could choose to provide a COLA Legislature’s COLA decisions have been driven for a different set of categorical programs by the availability of Proposition 98 funding and based on its priorities this year. However, with its budget priorities. As Figure 5 on the next page limited room for ongoing CCC Proposition 98 shows, the state has consistently provided a COLA spending commitments, the Legislature will face for seven specific categorical programs in almost a trade-off between providing more funding for every year since 2019-20. (In 2020-21, the state categorical programs and directing those funds did not provide a COLA for any CCC programs toward other ongoing budget priorities, such as enrollment growth. www.lao.ca.gov 9 analysis full 2026-27 BUDGET Figure 5 Certain Categorical Programs Have Received a COLA in Recent Years 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Academic Senate  Adult Education Program       Apprenticeship programs       CalWORKs student services       Campus child care support       Disabled Student Programs and Services       Extended Opportunity Programs and Services       Mandates Block Grant       MESA program   Middle College High School  NextUp foster youth program  Part-time faculty compensation  Part-time faculty office hours  Puente Project   Rapid rehousing  Student basic needs centers  Student mental health services  Umoja program   Veteran resource centers  COLA = cost-of-living adjustment and MESA = Mathematics, Engineering, Science Achievement. Figure 6 Governor’s Budget Includes Increases for Select Categorical Programs Reflects Funding for 2.41 Percent COLA (In Millions) Program Cost Adult Education Program $16.1 Extended Opportunity Programs and Services 5.4 Disabled Student Programs and Services 4.3 Apprenticeship programs 2.4 CalWORKs student services 1.4 Mandates Block Grant 1.0 Campus child care support 0.1 Total $30.6 COLA = cost-of-living adjustment. 10 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET ENROLLMENT In this section, we provide background with districts generating additional funding on top of on how the state funds community college this rate for enrolling students who are low income enrollment, discuss recent enrollment trends, or for attaining specified student outcomes. Beyond describe the Governor’s enrollment growth regular credit enrollment, community colleges proposals, assess those proposals, and offer an also enroll dual enrollment students, incarcerated associated recommendation. students, and noncredit students. In most cases, the base rate for these other enrollment types is Background higher ($7,595 per FTE student), as districts do not State Sets Enrollment Growth Targets for earn additional funding based on these students’ CCC. The state decides how much systemwide income level or outcomes. enrollment growth to fund in a given year through State Has Certain Rules for Allocating the budget process. Historically, the state has Enrollment Growth Funds Across Districts. considered several factors in making this decision, State law directs the Chancellor’s Office to allocate including changes in the adult population, the enrollment growth funding across districts using unemployment rate, recent enrollment trends, a formula that accounts for several local factors. and the availability of Proposition 98 funding. These factors include the number of individuals To meet the state’s growth targets, districts may within the district’s service area who do not have a use various enrollment management strategies. college degree, are unemployed, or are in poverty. For example, districts may expand outreach and If a district does not fully use its enrollment growth program offerings in response to a higher target, funding, then the remaining funding is redistributed or they may reduce course sections in response to other districts that are growing beyond their to a lower target. In last year’s budget, the state initial growth target. State law caps the total set a systemwide enrollment growth target of amount of enrollment growth funded at any given 0.57 percent for 2025-26. In a departure from district at 10 percent annually. Separate from this historical practice, the state also revised the growth funding, some districts receive funding for systemwide enrollment growth target for 2024-25 enrollment increases through a provision called from 0.5 percent to 2.28 percent. “restoration,” as the nearby box describes. State Funds Enrollment Growth at a Enrollment Growth Funds Are Added on Top Per-Student Rate. The state provides funding for of Other Base Funding. Under SCFF, a district’s enrollment growth at a per-student rate that varies growth target is one component in determining its by enrollment type. In 2025-26, the base rate for funded enrollment level. The method for calculating regular credit enrollment is $5,416 per FTE student, a district’s total funded enrollment level varies Enrollment Restoration State Funds Certain Enrollment Increases Through “Restoration.” When a district begins recovering from a recent enrollment decline, it first generates restoration funding. Under the restoration provision, a district may receive funding for adding back as many full-time equivalent (FTE) students as it has lost funding for over the past three years. Based on February 2026 estimates from the Chancellor’s Office, 17 districts (most of which are located in the South Central Coast, Los Angeles/Orange County, and Bay Area regions) are receiving funding to add back a combined 15,700 FTE students in 2025-26. The associated funding is included in these districts’ baseline apportionments costs. It is in addition to the funding the state provides for enrollment growth. www.lao.ca.gov 11 analysis full 2026-27 BUDGET by enrollment type. For regular credit students, levels in other regions, with the largest decrease the state first takes a three-year average of the in the Bay Area. These enrollment trends generally district’s FTE student count in a given year and align with broader demographic trends, with the the two previous years, prior to applying any regions seeing the most enrollment growth also new growth. Then, the state adds the district’s seeing the most population increases. Within each growth target on top of that three-year average. region, enrollment trends vary among districts. In For other enrollment types, the state does not every region experiencing declining enrollment, one take a three-year average and simply adds the or more community college districts are growing growth target to the FTE student count in that year. despite the regional trend. In 2025-26, the funded enrollment level across all enrollment types is estimated to be 1,076,238 FTE Figure 7 students systemwide. After Several Years of Declines, Trends CCC Enrollment Is Recovering CCC Enrollment Has Resident Full-Time Equivalent Students Recovered From Pandemic Declines. As Figure 7 shows, CCC 1,200,000 enrollment dropped notably during 1,000,000 the pandemic, declining by about 800,000 204,000 FTE students (18 percent) 600,000 from 2018-19 to 2021-22. These 400,000 declines likely reflect a number of 200,000 factors related to the public health emergency, including the abrupt 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26ª shift to online instruction and ª Reflects Chancellor's Office estimates as of February 2026. increased child care responsibilities for student parents. Enrollment has rebounded over the past four years. Figure 8 Based on February 2026 estimates CCC Enrollment Is Up in Certain Regions from the Chancellor’s Office, enrollment increased by about Percent Change in FTE Students, 2025-26 Compared to 2018-19ª 215,500 FTE students (24 percent) from 2021-22 to 2025-26. With Central Valley/Mother Lode these recent increases, just over Inland Empire/Desert half of districts are estimated to be back at or above their North/Far North pre-pandemic enrollment levels Systemwide in 2025-26. Los Angeles/Orange County Enrollment Trends Vary Notably by Region. As Figure 8 South Central Coast shows, CCC enrollment in 2025-26 San Diego/Imperial is estimated to be higher than pre-pandemic levels in three Bay Area regions: the Central Valley, the -10 -5 5 10 15 20% Inland Empire, and the North/Far ª Districts are grouped according to the regions used to administer various CCC programs, including career technical North. Estimated CCC enrollment education. 2025-26 enrollment levels reflect Chancellor's Office estimates as of February 2026. remains below pre-pandemic FTE = full-time equivalent. 12 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Several Factors Are Likely Contributing to frame, enrollment also increased among noncredit Recent Enrollment Increases. In addition to students and incarcerated students, though at regional demographic growth, several other factors slower rates (19 percent and 4 percent, respectively). are likely contributing to the recent rebound in Half of Districts Have Grown Beyond Their community college enrollment. One key factor Enrollment Targets. In 2025-26, CCC is estimated is the state’s unemployment rate, which has to be fully using the $40 million in enrollment generally increased over the past three years, growth funding provided in the enacted budget from 3.8 percent in August 2022 to 5.5 percent to support the systemwide growth target of as of December 2025. Historically, increases in 0.57 percent. Moreover, of the 72 local districts, unemployment have generally been accompanied 36 districts spanning all regions of the state are on by increases in community college enrollment, track to exceed their current-year growth target. with more individuals returning to school while These districts are estimated to be exceeding their the labor market is weak. Beyond this, districts targets by a combined 27,051 FTE students. Of are also pursuing a variety of growth strategies. those students, an estimated 25,488 FTE students These strategies include expanding high school are within the 10 percent cap on growth funded at partnerships, reengaging students who recently any given district. The Chancellor’s Office estimates dropped out of college, and offering courses on it would cost the state an additional $144 million more flexible schedules. to cover enrollment costs for all students within Mix of Enrollment Types Is Shifting. Though that cap. the overall enrollment level is recovering, the mix of Proposals enrollment has changed compared to before the pandemic. In 2025-26, regular credit enrollment is Governor Proposes to Fund More Enrollment estimated to be 30,440 FTE students (3 percent) Growth in 2025-26. The Governor’s budget lower than in 2018-19, as Figure 9 shows. This provides $55 million Proposition 98 General Fund decrease was more than offset by increases in other for an additional 1 percent systemwide enrollment enrollment types, most notably dual enrollment for growth in 2025-26, increasing the current-year high school students. Dual enrollment at CCC has growth target from 0.57 percent to 1.57 percent. increased from 37,370 FTE students in 2018-19 to This equates to an estimated 10,790 additional an estimated 65,620 FTE students in 2025-26—a FTE students. The administration indicates the 76 percent increase in just six years. During this time proposal was based on an earlier projection from Figure 9 Dual Enrollment Is Growing Much Faster Than Other Types of Enrollment Full-Time Equivalent Students Change Enrollment Type Description 2018-19 2025-26a Number Percent Regular Credit Students generally enrolled in lower-division 990,925 960,485 -30,440 -3% academic or CTE courses. Noncredit Adult students enrolled primarily in 70,300 83,795 13,495 19 precollegiate basic skills, ESL, or CTE courses. Dual Enrollment High school students enrolled in credit-bearing 37,370 65,620 28,250 76 community college courses. Incarcerated Students Students currently incarcerated enrolled in 4,697 4,863 166 4 credit-bearing community college courses. Totals 1,103,292 1,114,763 11,471 1% a Reflects reflect Chancellor’s Office estimates as of February 2026. CTE = career technical education and ESL = English as a second language. www.lao.ca.gov 13 analysis full 2026-27 BUDGET the Chancellor’s Office (made before the above which accounts for about one-third of FTE students data became available) of how much districts were at CCC—is also expected to decline slightly exceeding their existing growth targets in 2025-26. (0.6 percent) in 2026-27. Governor’s Budget Funds Further Enrollment Population Growth Could Lead to Enrollment Growth in 2026-27. On top of the revised Pressure in Certain Regions. Though current-year enrollment level, the Governor’s demographic trends are not likely to lead to budget provides $32 million ongoing Proposition 98 significant enrollment pressure statewide, they General Fund for further systemwide enrollment could lead to heightened pressure in certain parts growth of 0.5 percent in 2026-27. This equates to of the state. Under the administration’s projections, an estimated 5,484 FTE students in 2026-27. The the adult population (ages 18-64) is expected proposed budget-year growth rate is the same rate to continue growing in the Central Valley, Inland that has been included in the Governor’s budget Empire, and North/Far North regions in 2026-27. every year from 2020-21 onward. This could lead to continued enrollment pressure in these regions, where enrollment growth has Assessment already been concentrated over the past several Revising Current-Year Enrollment Target years. Under current law, the Chancellor’s Creates Poor Fiscal Incentive. In setting a growth Office will account for local demographic factors target, the state signals to districts how much when allocating new enrollment growth funding enrollment it has deemed it can afford. Districts among districts. can manage toward the target by adjusting the Labor Market Trends Could Continue to course sections they offer, among other actions. Generate Enrollment Pressure. Economic factors Providing additional funding when districts exceed can also contribute to enrollment pressure at CCC. the target creates an incentive for districts to enroll California’s labor market has been weak over more students than the state has committed to the past few years, with the unemployment rate supporting, potentially leading to cost pressures generally increasing over this period. Under our that the state might not be able to cover within office’s projections, unemployment continues to available resources. Prior to the 2024-25 Budget increase from an estimated 5.8 percent in 2025-26 Act, the state typically did not increase CCC’s to 6.3 percent in 2026-27. This trend could lead current-year growth target when districts exceeded more individuals to enroll in college while the labor those targets. Instead, it typically expected districts market remains weak. that exceeded their targets to absorb the costs in Dual Enrollment Is Creating a New Kind of the current year, then apply the additional students Enrollment Pressure. Beyond demographic and toward any growth targets in the budget year. economic factors, some of the recent enrollment Demographic Trends Are Not Likely to Create pressure at CCC is due to the state’s efforts to Statewide Enrollment Pressure. In setting expand college access to new populations—most growth targets for the budget year, demographic notably high school dual enrollment students. trends are one key factor to consider. In 2026-27, This enrollment pressure is likely to continue into these trends are not likely to generate significant 2026-27. School and community college districts statewide enrollment pressure among either have a fiscal incentive to expand a particular model traditional college-age students (age 18-24) or of dual enrollment called College and Career working-age students (age 25-64). Regarding the Access Pathways (CCAP), as both segments can former group, the number of public high school generate funding for participating students. Over graduates in California recently peaked. The the years, the Legislature has enacted several bills administration projects that high school graduates further facilitating the expansion of CCAP, including will decline by 1.4 percent in 2025-26, which most recently Chapter 789 of 2024 (SB 1244, could lead to a smaller incoming class of college Newman) allowing community college districts to students in 2026-27. Under the administration’s establish partnerships with school districts outside projections, California’s working-age population— their service area. (The Governor’s budget includes 14 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET $100 million one-time Proposition 98 General funding. Depending on the amount of ongoing Fund for school districts to expand dual enrollment funding available, the Legislature could consider partnerships. We discuss this proposal in The supporting a higher or lower amount of growth 2026-27 Budget: K-12 Proposals.) than the Governor proposes. Regardless of the amount of growth, we recommend the Legislature Recommendation begin providing the funds in 2026-27. Revising the Prioritize Funding Enrollment Growth 2025-26 growth target as the Governor proposes Beginning in 2026-27. Given that many districts could create an incentive for districts to disregard are already exceeding their current-year growth the state’s enrollment targets in the future, targets and that certain factors could generate potentially leading to growth beyond the level the further enrollment pressure in the budget year, state can support. we recommend the Legislature treat enrollment growth as a priority for ongoing Proposition 98 CALBRIGHT COLLEGE In this section, we begin by providing Statute Established a Seven-Year Startup background on Calbright College, a statewide Period. Statute established various milestones online college established in 2018-19. Next, we for Calbright to meet during this startup period, describe Calbright’s programs and students, which was scheduled to last from 2018-19 through followed by its budget and staffing. Then, we cover 2024-25. Most notably, these milestones included the Governor’s proposal to increase Calbright’s enrolling students by the last quarter of 2019; ongoing funding level, assess that proposal, and designing and validating at least 16 programs provide associated recommendations. by July 1, 2023; and receiving accreditation by April 1, 2025. Calbright is required to report by Background August 1 annually on its progress toward these State Created Calbright in 2018-19. In the milestones. In addition, statute directs the Board 2018-19 budget package, the state established of Governors to submit an independent evaluation an online community college district overseen by of the college by January 1, 2026, shortly after the systemwide Board of Governors. The district the completion of the start-up period. The consists of one college, since named Calbright. Chancellor’s Office overlooked this deadline and is Under statute, Calbright’s objective is to provide currently working to get a contract in place for the flexible online programs that lead to industry-valued evaluation to begin. credentials, particularly for working adults not State Provided One-Time and Ongoing currently accessing higher education. Statute Funds for Calbright. The 2018-19 budget also directs Calbright to use competency-based provided $100 million one-time Proposition 98 education, a model in which students progress General Fund for Calbright’s startup activities, through programs at their own pace according as well as $20 million ongoing Proposition 98 to how quickly they master the content. Statute General Fund for its operations. Trailer legislation expresses legislative intent that Calbright “create indicated the one-time funds were for various unique content and deliver it in a manner that is purposes including developing a business plan, not duplicative of programs offered at other local establishing administrative processes, preparing community colleges.” As the box on the next page for accreditation, and scaling efforts. The same describes, all other community colleges offer legislation further indicated the ongoing funds flexible online programs, but only a few are currently were to support employee salaries and benefits, offering competency-based education. professional development, technology licensing and maintenance, and other operating expenses. www.lao.ca.gov 15 analysis full 2026-27 BUDGET Online and Competency-Based Education Nearly Half of Community College Instruction Is Online. In 2024-25, 46 percent of instruction at the California Community Colleges (CCC) occurred online. This is up significantly from the pre-pandemic level of 17 percent in 2018-19. At the start of the pandemic, community colleges shifted a majority of their instruction online due to public health concerns. Since then, they have continued to offer many of their courses online in order to provide flexibility for students. All local community colleges currently offer online courses. The share of instruction occurring online varies notably across colleges, ranging from less than 15 percent to more than 70 percent. Beyond offering their own courses online, most colleges are participating in the California Virtual Campus, a course exchange that helps students find and enroll in online courses offered by other colleges across the system. A Few Community Colleges Are Piloting Competency-Based Education. In June 2021, the Chancellor’s Office launched a pilot to develop competency-based education programs at local community colleges. Seven colleges are currently participating in this pilot, and three have since launched their first programs. Specifically, Coastline College has launched an associate degree in management, Southwestern College has launched an associate degree in automotive technology, and Shasta College has launched a credit certificate in early childhood education. While these programs vary in design, all three are delivered fully or primarily online and allow students to progress at their own pace. In 2020-21, in response to a projected decrease accrediting primarily online institutions. DEAC in state revenues at the start of the pandemic, the accredits 18 other institutions in California, all of state reduced funding for Calbright. Specifically, which are private for-profit or nonprofit institutions. it lowered Calbright’s ongoing funding level to (The other community colleges are accredited by $15 million, while also sweeping $40 million in the Accrediting Commission for Community and unspent funds previously allocated to the college. Junior Colleges.) Statute Authorizes Calbright to Receive Programs and Students Funding Under SCFF. Generally, statute indicates that SCFF is to apply to Calbright in the same Calbright Currently Offers Ten Noncredit way it applies to all other districts (with funding Certificate Programs. As Figure 10 shows, these programs are primarily in the information linked to enrollment, low-income student counts, technology (IT) and business sectors. The programs and student outcomes). One key exception is that are designed to be short term. For each program, statute expresses intent to appropriate enrollment Calbright provides an estimated time to completion growth funding for Calbright separately from that generally ranges from between 8 weeks to enrollment growth funding for other districts. 34 weeks, assuming ten hours per week of study. To date, Calbright has not received apportionments, Students, however, may set their own pace, as long presumably because it is still spending its startup as they complete within a maximum of three years. funds. The Chancellor’s Office indicates there Upon completion, students receive a noncredit have also been various implementation barriers certificate. Although statute does not limit Calbright to transitioning Calbright onto SCFF, including the to noncredit programs, all of the programs it lack of an FTE student count for Calbright based on currently offers are noncredit. In addition to the established attendance accounting methods. ten current programs, Calbright indicates it has Calbright Received Accreditation in 2023. designed and validated eight other programs that it In July 2023, Calbright received accreditation from plans to launch over the next couple of years. the Distance Education Accrediting Commission (DEAC), an organization that specializes in 16 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Enrollment Has Increased Notably Over annually. In calendar year 2025, Calbright awarded Past Few Years. Calbright enrolled its first 1,019 certificates—a 59 percent increase over students in October 2019. As Figure 11 shows, the previous year. When reporting its completion Calbright got off to a somewhat slow start, but rate, Calbright uses a DEAC measure that reflects student headcount has ramped up in recent the percentage of students who complete within years. On June 30, 2025, Calbright enrolled 150 percent of the median completion time for 7,660 students—an increase of 67 percent over their program. Using this measure, Calbright’s the previous year. Currently, the state does not completion rate was 13.6 percent in 2024. Because have reliable data on the number of FTE students this measure is calculated differently from the at Calbright. While other districts report their FTE completion measures that other community student counts based on established attendance colleges report, we do not have a comparable accounting methods used for budgetary purposes, figure for the rest of the CCC system. Calbright does not submit such data. (Although Calbright Collects Data on Students’ the Chancellor’s Office’s DataMart platform Employment Outcomes in Various Ways. includes estimated FTE student counts for all Calbright recently began tracking the labor market districts, including Calbright, those reflect only outcomes of its completers through a partnership estimates. These estimates are based on a with CredLens, a nonprofit organization that different methodology that might yield different matches student records with employment and results from established attendance accounting earnings data. Based on this data, 86 percent methods, particularly for noncredit asynchronous of Calbright’s program completers in 2024 online programs.) were employed 12 months after completion. Calbright’s Student Body Differs From Broader CCC Figure 10 Student Body. As Figure 12 on Most of Calbright’s Programs Are in IT and Business the next page shows, there are Noncredit Certificate Programs Designed to Date a few notable differences. First, a much higher share of students Current Programs Planned Programs are age 25 and older at Calbright, Community Health Worker 3D Animation and Game Design compared to the broader CCC Customer Relationship Management Entrepreneurship system. Second, Calbright Data Analysis Generative AI students are more likely than other Defensive Cybersecurity Medical Billing CCC students to already have HR Learning and Development Nonprofit Management HR Talent Acquisition Offensive Cybersecurity I a college degree. In fall 2024, IT Support Offensive Cybersecurity II 35 percent of Calbright students Medical Coding User Interface/User Experience already had a bachelor’s degree, Network Technology and another 10 percent already Project Management had an associate degree. Third, IT = information technology; HR = human resources; and AI = artificial intelligence. the racial/ethnic distribution of students is different. Compared to Figure 11 the broader CCC system, Calbright Calbright’s Enrollment and Completions Ramped Up has a lower share of students who During Startup Period are Hispanic and higher shares of students who are Asian or 2020 2021 2022 2023 2024 2025 African American. Student headcounta 545 487 1,076 2,875 4,582 7,660 Small but Growing Number Award completionsb 33 43 109 248 639 1,019 of Students Are Completing a Reflects students enrolled on June 30 of each year, as reported in Calbright’s annual milestone reports. Programs. Figure 11 also shows b Reflects data for each calendar year, based on data provided by Calbright in February 2026. the number of certificates awarded by Calbright has increased www.lao.ca.gov 17 analysis full 2026-27 BUDGET (Data was not available on the share of these delivering instruction and student support. State students who were employed before enrolling or the law generally requires districts to spend at least share of program completers at other community 50 percent of their unrestricted funds on instructor colleges who were employed after completion.) salaries and benefits. As of 2024-25, Calbright In addition, Calbright collects earnings data is spending 29 percent of its ongoing funds on through surveys. In a recent survey of completers, those purposes. The district has applied for an respondents reported median annual earnings exemption from the requirement in that year on the of about $53,400 after program exit—up from basis of financial hardship, citing that it was unable $41,600 before program entry. This survey had to increase spending on instructor compensation a response rate of approximately 20 percent, without jeopardizing its other core functions. and we do not know whether respondents were representative of completers more broadly. Furthermore, the earnings Figure 12 data available for Calbright is not comparable to what is available Calbright Students Are Older and for other community colleges. More Likely to Have College Degrees Although the Chancellor’s Office Selected Student Characteristics, Fall 2024ª has a data sharing agreement with the Employment Development Age Department (EDD) to track earnings data for former CCC students, that CalbrightCCC System data set excludes most Calbright Younger than Age 25 9% 60% students. Calbright indicates this Age 25 to 34 35% 19% is because CCC’s systemwide application for noncredit programs Age 35 to 49 40% 13% does not collect sufficient data Age 50+ 16% 8% to match student records with EDD wage records. Budget and Staffing Prior Educational Attainmentb Employee Compensation CalbrightCCC System Is Largest Part of Calbright’s Bachelor's Degree 35% 9% Budget. Like other community Associate Degree 10% 5% college districts, Calbright High School Graduate 54% 83% spends a majority of its budget on employee salaries and benefits. Not High School Graduate 1% 3% As Figure 13 shows, however, employee salaries and benefits account for a somewhat smaller Race/Ethnicity share of expenses at Calbright CalbrightCCC System (a combined 68 percent) than Hispanic 33% 52% across the broader CCC system White 22% 24% (a combined 82 percent). Asian/Pacific Islander 21% 14% Compared to the broader system, Calbright spends a larger African American 18% 6% share of its budget on supplies, Other or Multiracial 6% 5% materials, and other operating expenses. This category includes a Based on data reported by districts in the CCC Chancellor's Office's DataMart system as of January 2026. Each chart excludes students for whom the characteristic was unknown. the technology that supports b Excludes dual enrollment students in CCC system. Calbright’s online model for 18 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Calbright Increased Staffing Levels During Startup Period. Calbright Figure 13 increased its staffing levels from 51 FTE employees in fall 2020 (the first year for Calbright’s Spending Is which this data is reported) to 171 FTE Somewhat Different Than Other Districts employees in fall 2024. As Figure 14 District Operating Expenditures by Type, 2024-25 shows, about three-quarters of Calbright’s FTE employees are classified employees, and about 100% Capital Outlayª one-quarter are academic employees. 90 Supplies, Calbright estimates that 53 percent 80 Materials, and Other of its employees are represented. The 70 Benefits California School Employees Association 60 represents classified employees, 50 excluding management. The California Teachers Association currently 40 represents Calbright’s full-time faculty, 30 Salaries and it recently announced that it intends 20 to add Calbright’s part-time faculty to the 10 same bargaining unit. Calbright Is Using One-Time Calbright CCC System Funds for Employee Compensation. ª Excludes spending on major capital projects. Over the past few years, Calbright has covered a notable share of employee compensation costs using its one-time startup funds. In 2024-25, these Figure 14 one-time funds accounted for 44 percent of Calbright’s total spending on salaries Most Calbright Employees and benefits. Calbright indicates these Are Classified Employees funds supported employees who Full-Time Equivalent Employees by Category, Fall 2024 worked on various startup activities, including developing new programs, establishing student support services, and implementing technology and data Lecturers systems. Although its startup period has ended, Calbright believes the employees Tenured/Tenure- Classified Administrator are needed to continue supporting these Track Faculty functions on an ongoing basis. Calbright Is Taking Several Educational Administrator Actions to Reduce Spending as One-Time Funds Run Out. Calbright is on track to spend the remainder of Classified Professional its one-time funds in 2025-26. With Classified Support Staff these funds running out, it has taken several actions to contain or reduce costs in the current year. Most notably, it has forgone a COLA for all employee groups, furloughed management for www.lao.ca.gov 19 analysis full 2026-27 BUDGET one day per month, reduced hours for some Certain Questions Remain Around Calbright’s part-time faculty, and delayed filling some Programs, Enrollment, and Outcomes. vacancies. It has also reduced spending on certain Although statute requires that Calbright not non-personnel costs, including marketing and duplicate programs at local community colleges, supplies. Combined, these actions have brought its offerings are similar in some ways. Some of its Calbright’s budgeted expenses down to $43 million largest programs (including IT support and data in 2025-26—$2.5 million (5.4 percent) lower than analysis) are in subject areas commonly taught at in the prior year. This spending level, however, local community colleges and often taught online. is still nearly three times Calbright’s ongoing In these cases, the main factor differentiating funding level of $15 million. At the $15 million Calbright’s programs is their competency-based level, Calbright indicates it would need to make format, which remains uncommon at other colleges. significant reductions in enrollment, program Regarding Calbright’s students, the evidence is offerings, and staffing in 2026-27. Given this mixed as to how well the college is reaching its possibility, Calbright’s board recently authorized target population of working adults not already the college to reduce staffing by 93 FTE employees accessing higher education. While the college is (approximately half its workforce), with most of the primarily enrolling working-age students, many of reduction occurring among classified staff and these students already have bachelor’s degrees. administrators. This action is intended to meet a Furthermore, it is difficult to assess student statutory deadline to provide preliminary layoff outcomes. Although Calbright collects data on notices to any potentially affected employees by completion rates, employment, and earnings, its March 15. Funds permitting, Calbright (like other metrics are not comparable to those reported by community college districts) may rescind layoff other community colleges. notices after they have been issued. Questions Also Remain Around Calbright’s Cost-Effectiveness. It is also difficult to assess Proposal the cost-effectiveness of Calbright’s model, as Governor Proposes Ongoing Augmentation we cannot determine how much the college is for Calbright. The Governor’s budget proposes spending per student without a reliable FTE student to increase Calbright’s ongoing funding level by count. We can, however, use systemwide data on $38 million, bringing it to $53 million ongoing certificates and degrees awarded to estimate how Proposition 98 General Fund. The administration much the college is spending per award completed. indicates the increase is to support the college’s In 2024-25, we estimate that Calbright spent operating costs as it transitions out of its startup about $53,000 per award completed, compared to period. The administration further indicates that it about $35,000 across other community colleges. intends to provide an annual COLA for the college (These amounts include spending from both beginning in 2027-28. There is no provisional or ongoing and one-time funds.) Spending per award trailer bill language associated with this proposal. was notably higher at Calbright, even though its awards are shorter term. This raises questions Assessment about Calbright’s cost-effectiveness, at least at its Calbright Has Made Progress Toward current scale and completion rates. Statutory Goals. The state created Calbright to Proposed Funding Level Lacks Clear provide more flexible higher education options Rationale. Under the Governor’s budget, for working adults. During its startup period, Calbright’s proposed ongoing funding level is the college generally made progress toward $53 million. Calbright indicates the amount is this objective, meeting key milestones related based on its estimates of the ongoing operating to enrolling students, designing and validating costs needed to maintain its core functions, programs, and receiving accreditation. It also including instruction, student support, research has seen substantial increases in enrollment and and development, and administrative activities. completions over the past few years. 20 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET The proposed funding level, however, is high Legislature wishes to maintain Calbright’s current relative to Calbright’s recent spending. Specifically, service level in 2026-27, it could consider providing it is 23 percent higher than Calbright’s current-year one-time funding for this purpose. Sustaining spending level (and 16 percent higher than its Calbright’s current-year spending level for prior-year spending level, before it made any another year would require $28 million in one-time budget reductions). funding, on top of existing ongoing funding. This Proposed Funding Approach Lacks is somewhat less than the $38 million ongoing Accountability and Incentives. Under the increase the Governor proposes. Governor’s proposal, the state would provide Consider Revisiting Noncredit Funding Calbright with funding that is not tied to any Approach Under SCFF. Unlike funding for credit specific expectations, beyond the college’s original courses, funding for noncredit courses is based statutory objectives. Importantly, the Governor’s entirely on enrollment under SCFF. Given that all proposal does not link Calbright’s funding to an of Calbright’s programs are currently noncredit, enrollment target. Thus, Calbright would have no funding Calbright through SCFF still would not incentive to maintain or increase enrollment under create any incentives for the college to improve the proposed approach. Its funding level moving student outcomes. In the future, the Legislature forward would remain the same (aside from any may wish to consider revisiting this broader COLA) regardless of how many students it serves. approach to noncredit funding. In particular, we Similarly, the administration’s proposal does not link encourage the Legislature to link a portion of funding to student outcomes, such that Calbright noncredit funding to performance, as we discuss in would have no fiscal incentive to improve these Redesigning California’s Adult Education Funding outcomes. This approach is much less transparent Model. Doing so would improve incentives for all and provides less accountability than the state’s colleges, including Calbright, to improve student approach to funding other community college outcomes in noncredit programs. districts, which generate funding through SCFF. Continue to Monitor Calbright. Though Additionally, while there was some initial justification Calbright met key statutory milestones during for providing Calbright with categorical funding to its startup period, the Legislature likely will want account for the unique cost structure of a startup to continue closely monitoring the college’s institution, the justification is less clear now that enrollment, program offerings, spending, and Calbright’s startup period has ended. outcomes over the next few years. Whether the Legislature chooses to fund Calbright through SCFF Recommendations or through other means, it will have an opportunity Recommend Transitioning Calbright to SCFF. to review the college annually as part of the regular Now that Calbright’s startup period has ended, we budget process. In particular, statute indicates the recommend beginning to fund the college through Legislature is to make Calbright enrollment growth SCFF, as statute originally envisioned. Such an decisions as part of the annual budget process. approach links funding with enrollment, provides The Legislature also will be better positioned to a known funding rate per student, and treats assess the college’s cost-effectiveness once a Calbright consistently with other districts. While consistent methodology is applied to its attendance this approach would lead to a different funding level accounting. In addition, the Legislature likely than the Governor proposes, we cannot provide a will have better information on the college’s reliable estimate without better data on Calbright’s student outcomes and overall performance FTE student count. To give the Chancellor’s Office once the statutorily required independent time to work through this attendance accounting evaluation of Calbright has been completed. issue and other implementation barriers, the Continued monitoring will help determine whether Legislature could adopt trailer bill language Calbright is providing cost-effective service to its specifying that Calbright shall be funded under target population. SCFF beginning in 2027-28. In the meantime, if the www.lao.ca.gov 21 analysis full 2026-27 BUDGET HEALTHY SCHOOL FOOD PATHWAYS In this section, we first provide background nontraditional sectors. The state currently provides on Healthy School Food Pathways (HSFP), $30 million ongoing Proposition 98 General Fund which is a set of training programs for school for this program. Outside the CCC budget, the food service staff. We then describe the state has also funded several recent one-time Governor’s proposal to provide ongoing funding initiatives at other agencies, including DAS, to for HSFP, assess that proposal, and provide an provide additional grants for apprenticeships and associated recommendation. pre-apprenticeships. In addition, apprenticeship and pre-apprenticeship programs may access Background state and federal funding through various broader Apprenticeships and Pre-Apprenticeships workforce development programs. Are Specific Training Models. Both training HSFP Provides Training for School Food models combine hands-on learning with classroom Service Staff. In 2022, a nonprofit organization instruction. Apprenticeship programs are designed called the Chef Ann Foundation launched HSFP to prepare participants to enter a specific to train K-12 school food service staff in “scratch profession. They vary in length but commonly cooking,” or preparing meals using fresh, take a few years to complete. Pre-apprenticeship unprocessed ingredients. The initiative has three programs are designed to prepare participants to main components: (1) a 7-week pre-apprenticeship enter an apprenticeship program, and they typically program that introduces participants to scratch take a few months to complete. In California, the cooking, (2) a 9-month apprenticeship program Department of Industrial Relations’ Division of for pre-apprenticeship completers interested Apprenticeship Standards (DAS) oversees both in furthering their skills, and (3) a 13-month types of programs. Based on DAS data, the state fellowship program for experienced school food currently has about 88,700 registered apprentices professionals interested in leadership skills. Each and about 9,300 registered pre-apprentices. program involves a combination of paid hands-on Although the majority of apprentices and learning at a host school district, as well as online pre-apprentices have traditionally been in courses provided by the nonprofit and a partnering the construction trades, the state has made research institute. Both the pre-apprenticeship and efforts over the past decade to expand both apprenticeship programs are approved by DAS. models to other industry sectors, often called As Figure 15 shows, more than 1,400 California “nontraditional sectors.” participants have enrolled in the three programs Several State Programs Support to date, with the majority enrolling in the Apprenticeships and Pre-Apprenticeships. pre-apprenticeship program. (HSFP is also available Traditional apprenticeships are sponsored by in a few other states, but this analysis and all related employers and labor unions, with those sponsors budget actions are specific to California’s HSFP.) covering the majority of program costs. However, State Has Provided One-Time Funding for the state has a longstanding CCC categorical HSFP. The 2022-23 budget package provided program called RSI that reimburses apprenticeship $45 million one-time Proposition 98 General sponsors for a portion of the costs of classroom Fund to CCC for HSFP. The Chancellor’s Office, instruction. The state currently provides $98 million working with a community college district as the ongoing Proposition 98 General Fund for this fiscal agent, provided the funds to the Chef Ann program, with sponsors partnering with districts Foundation. Provisional language specified that the to access the funds. Since 2015-16, the state has funds were intended to support HSFP costs over also funded a CCC categorical program called the a three-year period. Subsequently, the 2025-26 California Apprenticeship Initiative (CAI), which budget package provided an additional $10 million provides grants to support the development of one-time Proposition 98 General Fund for HSFP. apprenticeship and pre-apprenticeship programs in 22 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Figure 15 Most HSFP Participants Are in Pre-Apprenticeship Program Number of California Participants 2022-23 2023-24 2024-25 2025-26 Total Pre-apprenticeship program 47 255 500 294a 1,096 Apprenticeship program 3 16 81 180 280 Fellowship program 13 11 12 12 48 Totals 63 282 593 486a 1,424 a Pre-apprenticeship data reflects fall 2025 cohort. A second cohort is expected in spring 2026. HSFP = Healthy School Food Pathways. Based on data provided by the administration, address high vacancy and turnover rates among these appropriations are the primary funding source food service staff. The amount of the proposal is for HSFP. The fellowship program has also received roughly based on the annual amounts provided about $1 million in other state funds, primarily for this purpose in previous budgets. As with through a grant from the California Workforce those with previous amounts, the administration Development Board’s High Road Training indicates the proposed funds would go to the Partnerships initiative. In addition, HSFP is receiving Chef Ann Foundation to support expenses across a small amount of reimbursements through federal the pre-apprenticeship, apprenticeship, and workforce development programs. fellowship programs. School Districts Provide Training for Assessment Food Service Staff. Most school food service positions do not have specific education or Rationale for Designating Funding for HSFP training requirements for entry. Under federal law, Is Weak. Although there is some evidence of high vacancy and turnover among school food service however, school food service staff are required staff, it is unclear whether the root cause of those to complete four to six hours of training annually problems is insufficient training, as opposed to while employed. School districts may provide other factors such as low wages or part-time this training directly or refer their staff to online hours. Moreover, if additional training is needed, resources. Districts typically cover training costs the administration has not provided justification from their school nutrition program’s operating for selecting this particular set of programs. budget, which is primarily supported by federal Notably, the state typically does not designate and state reimbursements. For school food service ongoing funding for specific pre-apprenticeship staff interested in higher education, CCC and other and apprenticeship programs in the budget. institutions offer programs in nutrition, culinary arts, Instead, other programs apply for funding through and related fields. There are also a small number competitive processes (as under the CAI) or as of pre-apprenticeships and apprenticeships in reimbursement for services provided (as under the these fields, though HSFP is the only example we RSI program). are aware of that focuses specifically on school food services. HSFP Has Unusually High State Costs. Based on data provided by the administration, $26 million Proposal in state funding for HSFP has been spent to Governor Proposes Ongoing Funding for date. As Figure 16 on the next page shows, HSFP. The Governor’s budget provides $14 million the majority of this spending has gone toward ongoing Proposition 98 General Fund for this contracted services, management, and indirect purpose. According to the administration, the costs. Curriculum and training costs account for a proposal is intended to support its broader efforts small share (less than 10 percent) of the reported to improve school nutrition, particularly by helping expenses. Across all expense types, we estimate www.lao.ca.gov 23 analysis full 2026-27 BUDGET the state cost per HSFP participant has been about program satisfaction and self-reported knowledge $13,700 for pre-apprentices and about $32,900 gains. Regarding workforce outcomes, 77 percent for apprentices. For comparison, state costs are of pre-apprentice respondents and 71 percent of much lower under CAI, which in recent rounds has apprentice respondents reported being employed in provided grantees with a maximum of $2,500 per school food service at the time of the alumni survey pre-apprentice and $15,000 per apprentice. State (which for most respondents was less than one costs are even lower in the RSI program, which year after program completion). The administration under the current reimbursement rate would anticipates that a more comprehensive final report provide only $1,486 per apprentice for a program will be completed at the end of 2026. comparable to HSFP. HSFP Outcomes Are Mixed. Figure 17 Figure 16 shows the outcomes of California participants Bulk of HSFP Spending Is Related to who enrolled in the HSFP pre-apprenticeship Program Administration program since fall 2022, based on data provided by the administration. Across the seven cohorts, Proposition 98 General Fund (In Millions)a 63 percent of those who enrolled in the seven-week Expense Type Amount pre-apprenticeship program went on to complete it. This is somewhat lower than the statewide Contracted servicesb $10.4 Management 7.3 completion rate across all pre-apprenticeship Indirect costs 3.5 programs, which has fluctuated between Curriculum, training, and engagement 2.2 64 percent and 76 percent over the past four years, Participant wages and support 2.0 based on DAS data. Only 38 percent of those Program evaluation 0.4 who completed the HSFP pre-apprenticeship Total $25.8 program subsequently transitioned to the HSFP a Reflects spending from the 2022-23 Budget Act allocation for this program, as of February 2026. apprenticeship program. (Comparable data on b Includes marketing campaign, recruitment, technology, and other transition rates is not available for other California expenses. programs.) Relative to the HSFP pre-apprenticeship HSFP = Healthy School Food Pathways. program, the HSFP apprenticeship program has a higher completion Figure 17 rate of 72 percent. This is somewhat higher than the Notable Share of HSFP statewide completion rate across Pre-Apprentices Do Not Complete Program all apprenticeship programs, Number of Participants by Program Outcome which was 63 percent across the past five-year period, based on 400 DAS data. (The DAS data includes Completed and transitioned to apprenticeship programs of longer duration, such 350 Completed, but did not transition to apprenticeship Did not complete pre-apprenticeship that the completion rates are not 300 exactly comparable.) 250 Evaluation of HSFP Is Underway. A research organization 200 called the Food Insight Group 150 is currently evaluating HSFP 100 in California. In April 2025, it released an interim report based 50 on surveys of participants and host school districts. Due to its Fall 2022 Spring 2023 Fall 2023 Spring 2024 Fall 2024 Spring 2025 Fall 2025 timing, the report primarily focuses HSFP = Healthy School Food Pathways. on short-term outcomes, such as 24 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Previous Funding Remains Available. As of Recommendation February 2026, a combined $27 million across the Reject Proposal. Given the issues above, we two previous allocations for HSFP remains unspent. recommend rejecting the Governor’s proposal to (Of the original 2022-23 appropriation, $1.8 million provide ongoing funding for HSFP. The information was reappropriated for other purposes in the currently available on HSFP raises questions about 2025-26 budget.) The administration indicates that whether it is likely to be an efficient and effective an estimated $6 million will be spent this spring, way to address school food service staffing leaving $21 million available for expenditure in future challenges. Furthermore, previous funding remains years. This amount could fully cover program costs available to cover HSFP costs in the budget year. in 2026-27, making additional funding unnecessary in the budget year. COMMON CLOUD DATA PLATFORM In this section, we first provide background on Chancellor’s Office Issued First Round of the Common Cloud Data Platform, an IT project Funding in 2023-24. The Chancellor’s Office intended to facilitate the sharing of student data launched the Common Cloud Data Platform using systemwide. We then describe the Governor’s $10 million Proposition 98 General Fund set aside proposal to provide a third round of funding for from the Student Equity and Achievement Program. the project, assess that proposal, and provide an (Statute authorizes the Chancellor’s Office to associated recommendation. designate up to 5 percent of funding for that program for systemwide activities each year.) This Background first round of funding is supporting a demonstration Each District Maintains Its Own Student project to develop the initial infrastructure for the Data. Community colleges collect many types of platform and deploy it across a subset of districts. student data, including data on enrollment and The Chancellor’s Office began this work with an academic outcomes. Each district stores this data initial cohort of six districts, and it has since added in its own IT platforms. The Chancellor’s Office a second cohort of seven more districts. These does not have direct access to this data. Instead, it districts—which volunteered to participate in the requires districts to report certain data periodically project—vary in terms of size, region, and current IT during the course of the year. It in turn uses this platforms. The demonstration project is scheduled data for various systemwide purposes, including for completion by June 2026. determining apportionment funding and complying State Provided Second Round of Funding for with state reporting requirements. Project in 2025-26. The 2025-26 budget provided Common Cloud Data Platform Is Intended to an additional $12 million one-time Proposition 98 Facilitate Systemwide Data Sharing. In October General Fund for the Common Cloud Data Platform. 2023, the Chancellor’s Office launched a project The Chancellor’s Office plans to use these funds called the “Common Cloud Data Platform.” The to deploy the initial infrastructure for the platform goal of the project is to develop a platform through systemwide, as well as to continue implementing which the Chancellor’s Office and participating certain reporting functionalities that it is now testing districts could share student data on a “near with the first two cohorts of districts. It also plans real-time” basis. By making the sharing of student to use the funds to integrate the platform with data easier, the project is intended to streamline districts’ other technology tools (such as academic systemwide reporting processes. In addition, by planning tools and learning management systems) providing access to data that is more timely and to enable more data analytics. It intends to begin more complete (spanning multiple districts), the these activities in 2025-26 and continue them Chancellor’s Office suggests the project could through 2027-28. improve decision-making and student support. www.lao.ca.gov 25 analysis full 2026-27 BUDGET State Also Created Project-Specific of the activities are uncertain. For example, the Reporting Requirements. The California Chancellor’s Office has not yet determined whether Department of Technology (CDT) oversees the the reporting functionalities supported by these planning and implementation of IT projects at most funds are viable for systemwide deployment. state agencies. The Chancellor’s Office, however, According to the January 2026 report, it intends is considered an independent agency outside of to make this determination at the end of 2026-27, CDT’s authority. To ensure that the Common Cloud based on the results of the testing that is underway Data Platform receives adequate oversight, the with the first two cohorts of participating districts. state created certain reporting requirements in the Notable Uncertainty Around Whether All 2025-26 budget. These requirements direct the Districts Will Participate. In addition to technical Chancellor’s Office to submit a report containing viability, another source of uncertainty currently an implementation update on the platform and a facing the project is district participation. This could plan for its further development and expansion have a large impact on the project’s benefits, as the by January 15, 2026. They further direct CDT and new platform can only replace existing systemwide the Department of Finance to review that report reporting processes if all districts participate. This and submit associated recommendations to the would require expanding the platform from the Legislature by March 31, 2026. As of this writing, 13 districts in the first two cohorts to all 73 districts the first report has been submitted, and the second systemwide. At this time, the Chancellor’s Office report is in progress. indicates seven additional districts have expressed interest in participation. Some districts, however, Proposal have expressed concerns around the workload or Governor Proposes a Third Round of Funding other operational costs associated with participating in 2026-27. The Governor’s budget provides an in the project. additional $36 million one-time Proposition 98 Scope and Cost of Additional Activities Are General Fund, together with $5 million ongoing Not Yet Known. At this stage of the project, certain Proposition 98 General Fund, for the Common key details relating to the proposed third round Cloud Data Platform. This would be the first ongoing of funding are still being determined. Broadly, the funding for the platform. The Chancellor’s Office Chancellor’s Office indicates the funding would be indicates these funds would support the completion used for several purposes, including maintaining of the project and the ongoing maintenance of project infrastructure, enhancing reporting and the platform. The administration proposes trailer analytics capabilities, and integrating additional bill language codifying the project. Under this technology tools. Based on the January 2026 report, language, the project’s objectives are to “support the specific scope of activities will be confirmed community college student success initiatives, after additional project milestones are completed. improve community college districts’ stewardship Relatedly, the cost of these activities is still being of resources and ability to use data-driven decision determined, with the Governor’s budget proposal making, and streamline community college based on preliminary estimates. The Chancellor’s administrative processes.” The language would also Office indicates it will refine these estimates as the require the Chancellor’s Office to submit an interim project progresses and more information becomes report on the project by March 31, 2027 and a final available on final deliverables, vendor pricing, and report on January 31, 2029. ongoing operational needs. Assessment Need for Ongoing State Funding Is Unclear. Several of the project’s objectives, including Activities From Second Round Are Still in streamlining administrative processes and improving Early Stages. The Chancellor’s Office recently districts’ stewardship of resources, are likely to began spending the funds provided in last year’s lead to ongoing savings across the system. Without budget for the Common Cloud Data Platform. better information quantifying these savings, it These funds are intended to support activities is unclear whether any ongoing augmentation through 2027-28. At this early stage, the outcomes 26 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET is needed for the project. Instead, districts and Legislature could consider a future funding request the Chancellor’s Office could redirect their for 2028-29. To inform this decision, we recommend savings toward covering all or part of the ongoing extending the reporting requirements from last year’s maintenance of the platform. budget for two more years while the second round of funding is being spent. Under this approach, the Recommendation Chancellor’s Office would submit implementation Reject Proposal at This Time and Strengthen updates by January 15, 2027 and January 15, 2028, Reporting Requirements. Given the concerns and CDT and the Department of Finance would above, it would be premature to provide a third round submit their associated recommendations by of funding for the Common Cloud Data Platform at March 31 of both years. Compared to the reporting this time, particularly if it contains ongoing funding. requirements in the proposed trailer bill, this The second round of funding provided in last year’s approach would provide the Legislature with more budget could support the project through 2027-28, frequent and timely updates on the project as well as at which point more information will be available on the benefits of external oversight. the project’s outcomes to date and the additional costs of completing it. Based on that information, the CREDIT FOR PRIOR LEARNING In this section, we provide background of service documenting their military training and on credit for prior learning (CPL) at CCC, experiences. The American Council on Education, in describe the Governor’s proposal to provide turn, has developed recommendations that colleges new ongoing and one-time funding for this may use for converting certain military training purpose, assess that proposal, and provide an and experiences into college credit. For example, associated recommendation. a college might award three introductory health sciences credits and two physical education credits Background for completing basic training. CPL Is Intended to Accelerate Degree CCC Currently Offers CPL on a Small Scale. Completion. CPL refers to the awarding of college Under systemwide regulations, all community credit for skills learned outside of college courses. college districts are required to have a policy This typically consists of skills learned through work for students to earn CPL. Nonetheless, the or military experience, though it may also include Chancellor’s Office indicates that CPL has not skills learned in other academic settings (such as been implemented at scale at most colleges in the high school Advanced Placement courses). Some system. The Chancellor’s Office does not have research has found that students who receive reliable data, however, on the amount of CPL CPL are more likely to complete certificates or awarded. Colleges are currently reporting this degrees and do so in less time, compared to their data in two different platforms, yielding two very peers. Accordingly, CPL is often presented as a way different data sets that are both likely incomplete. to accelerate degree completion and reduce costs Based on one data set, colleges awarded CPL for students. to a total of about 40,900 students, of whom CPL Takes Various Forms. Students may earn 2,100 (5 percent) were military or veteran students, CPL in various ways, including by passing an exam, in 2024-25. Based on the other data set, colleges submitting a portfolio of their work for faculty review, awarded CPL to a total of about 17,500 students, or demonstrating they have earned an industry of whom 8,100 (46 percent) were military or veteran credential that faculty have deemed equivalent students, in that same year. In both data sets, to certain courses. Nationally, one of the most students earned on average about five to seven units well-established forms of CPL applies to military through CPL—roughly the equivalent of two typical and veteran students. These students typically college courses. receive “joint services transcripts” from their branch www.lao.ca.gov 27 analysis full 2026-27 BUDGET State Provided One-Time Funding for CPL about 15 staff positions based at the Riverside in 2024-25. The 2024-25 Budget Act provided Community College District responsible for various $6 million one-time Proposition 98 General Fund for activities related to CPL, including developing CCC to expand CPL. The Chancellor’s Office has policies, managing technology, and providing allocated these funds toward a systemwide CPL training and support to colleges. The next largest initiative that it administers jointly with the Riverside share of the funding is for the maintenance of the Community College District. As Figure 18 shows, technology platform. Of the one-time funds, the the funds are supporting a range of related activities. Chancellor’s Office plans to distribute $5.9 million For example, $1.6 million is going toward faculty as local implementation grants, with each college work groups that are developing systemwide credit receiving $50,000. Each college must commit to recommendations for mapping certain forms of prior using these funds to (1) award CPL through joint learning (such as specific industry certifications) to services transcripts, (2) implement systemwide equivalent college courses. In addition, $1.3 million credit recommendations developed by faculty is going toward the development and maintenance work groups, and (3) establish or strengthen local of a technology platform to support CPL. The procedures to identify students eligible for CPL. Chancellor’s Office is required to submit a report on The rest of the one-time funds remain largely the outcomes of the 2024-25 funding by March 1, unallocated. The Chancellor’s Office indicates it 2026. This information was not available in time for is reserving these funds to help cover operating our analysis. costs for the systemwide CPL initiative over the State Provided Second Round of Funding for next few years. The Chancellor’s Office is required CPL in 2025-26. The 2025-26 budget package to submit a report on the outcomes of the 2025-26 provided an additional $15 million one-time funding by January 31, 2028. Proposition 98 General Fund, along with $5 million Proposal ongoing Proposition 98 General Fund, for CPL. Governor Proposes Third Round of Funding As Figure 18 shows, the Chancellor’s Office has for CPL. On top of the amounts included in the allocated the ongoing funds toward the systemwide last two budgets, the Governor’s budget provides CPL initiative. More than half of this funding is for $35 million one-time Proposition 98 General Fund and $2 million Figure 18 ongoing Proposition 98 General Recent CPL Funding Is Supporting Various Activities Fund for CPL. The Chancellor’s Proposition 98 General Fund (In Millions) Office indicates the proposed ongoing funds, when combined 2024-25 2025-26 with the 2025-26 ongoing funds, One Time Ongoing One Time would fully cover operating costs Systemwide CPL Initiative for the systemwide CPL initiative. Staffing (15 positions) — $2.7 $0.3 If the proposal is approved, the Technology platform $1.3 1.2 — Chancellor’s Office indicates it Faculty work groups 1.6 — — would use the reserved 2025-26 Trades apprenticeship project 1.3 — 0.1 Professional development 0.5 0.2 — one-time funds, as well as the Othera 1.3 0.9 — proposed 2026-27 one-time funds, Local Implementation Grants — — 5.9 for additional local implementation Unallocatedb — — 8.7 grants. It intends to allocate Totals $6.0 $5.0 $15.0 these grants to colleges based a Includes other special projects, operating expenses, and indirect costs. b The Chancellor’s Office indicates it is currently reserving these funds for systemwide CPL initiative on their attainment of CPL-related operations. If the Governor’s proposed $2 million ongoing increase for this initiative is approved, outcomes. The proposed trailer the Chancellor’s Office would instead use these reserved funds for additional local implementation grants. bill language does not specify the CPL = credit for prior learning. allocation formula or the specific activities the grants would support. 28 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Assessment The Chancellor’s Office indicates it is working with districts to improve data collection around these Proposal Might Not Address Key Barriers topics. This data is also expected to be part of the to Expanding CPL. Each year, hundreds of 2028 report. thousands of new students enter the CCC system with prior learning from many types of Existing Funding Remains Available to work experiences. Currently, the system does Support CPL. Under the Chancellor’s Office not have consistent rules for equating each type spending plan for CPL funds, the previous rounds of experience to certain course credit. Though of funding could cover the systemwide initiative’s some faculty work groups have been established, operating costs through 2029-30. In addition, their recommendations for translating students’ these previous rounds are supporting local prior learning into college credit are still under implementation grants that will be available to development. Moreover, the extent to which colleges through 2027-28. Beyond this targeted colleges will in turn adopt these recommendations funding for CPL, the state provides funding for remains to be seen. Under the current plan, faculty broader categorical programs that colleges could at each college will make these decisions locally, use to further support CPL efforts. These include very likely resulting in inconsistent implementation the Student Equity and Achievement Program, across colleges. Furthermore, colleges interested in which provides $524 million ongoing for student implementing recommendations might not have the support services, and the Strong Workforce staff or technological capacity to do so. This could Program, which provides $290 million ongoing limit their ability to proactively identify students for career technical education. Notably, Strong eligible for CPL or respond to student requests for Workforce Program statute explicitly encourages CPL. It is unclear whether providing small amounts colleges to develop workforce training that applies of largely one-time funding for CPL can resolve the CPL. Given these various existing fund sources, underlying barriers to bringing this practice to scale there is not justification for additional funding for across the system. this purpose in 2026-27. Outcomes of Previous Rounds of Funding Recommendation Are Not Yet Known. In the report due January 31, Reject Proposal at This Time. Given the 2028, the Chancellor’s Office is expected to discuss concerns above, we recommend rejecting the the extent to which the CPL initiative is meeting its Governor’s proposal to provide additional funding objectives—including implementing systemwide for CPL. The Legislature will have better information credit recommendations, designing systemwide on the outcomes of previous funding rounds after processes to identify eligible students, and the Chancellor’s Office submits the report due by developing a systemwide technology infrastructure January 31, 2028. We think it would be premature to facilitate the awarding of credits. This information to provide additional funding for this purpose before would help the Legislature better understand that information is available. Upon receiving the how well the initiative is addressing the barriers statutorily required report, the Legislature could to scaling CPL. In the meantime, the Legislature reassess the likelihood that the initiative could be has little information on the initiative’s outcomes. taken to scale successfully, and, if so, how much It does not yet have complete and accurate data additional funding for CPL to provide. Even with on the awarding of CPL across the CCC system. no additional funding over the next few years, the Moreover, it does not know whether CPL is having system would continue to implement its CPL efforts the intended policy impacts, including increasing using previous rounds of funding. completion rates and reducing time to degree. www.lao.ca.gov 29 analysis full 2026-27 BUDGET 30 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET www.lao.ca.gov 31 analysis full 2026-27 BUDGET LAO PUBLICATIONS This report was prepared by Lisa Qing, and reviewed by Jennifer Pacella and Ross Brown. 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. 32 LEGISLATIVE ANALYST’S OFFICE