Blog Post | June 26, 2023

The California Legislature’s FY24 Budget Priorities

Author: Manny Rodriguez

This year, TICAS and our partners in the Californians for College Affordability and other Coalitions have outlined key policy priorities and investments in the 2023-24 Budget that will address California’s ongoing college affordability challenge, support postsecondary accountability, and ensure a high-quality education.

Below, we outline where key investments and policy changes stand as of mid-June. The Legislature has passed a budget framework ahead of its June 15th deadline, but they have yet to find full budget agreement with the Governor’s Office. Therefore, this table is broken down into two sections, the first covering investments and policy changes in the legislative agreement via SB 101. The second table covers investments and policy changes that we will expect to see through Trailer Bills after agreement is reached with the Governor’s Office. These tables provide information regarding these issues and varying positions from the Governor and Legislature. As the Budget is finalized, we will update these tables.

TICAS 23-24 Budget Priorities after the May ReviseGovernor’s Proposed Higher Ed. Budget & Trailer Bill Language Related Investments in the 2023-24 BudgetLegislative budget framework agreement per SB 101. AnalysisTICAS’ considerations for implementation and/or future policy design
College Affordability
Prioritize any future financial aid investments for Cal Grant Reform.The Governor’s January budget proposes a one-time increase of $227 million for the Middle Class Scholarship (MCS), per the 2022 Budget.The MCS program will be allocated $227M one-time in 2023-24 and $289M one-time in 2024-25. This will maintain current level of the program in that school year. The funding level for 2024-25 needs to be set in this budget, since the California Student Aid Commission needs to make award decisions for the 2024-25 school year during the 2023-24 budget year.TICAS appreciates that the modified MCS program is a step towards building a pathway to debt-free college in California, attempts to meet the total cost of attendance, establishes a reasonable self-help option, and accommodates more low-income students. We remain concerned with specific structural pieces that prevent the program from equitably prioritizing the needs of the most vulnerable students, many of whom attend CCCs and are not eligible for an award. If the Legislature feels fiscally comfortable today to invest financial aid dollars in 2024-25, we respectfully remind them that the original financial aid promise was to invest in Cal Grant Reform in 2024-25. We hope the Governor will keep all options on the table to ensure Cal Grant Reform can happen in 2024-25.
Support long-term commitment to student housing through new funding mechanism at UC & CSU and continued grant funding for CCCs.The Governor’s 2023-24 January budget proposes to delay $250 million from the affordable housing grant projects to the next fiscal year, plus delaying funding for the loan program over the next two fiscal years. Per the May Revise, Governor Newsom instead proposed the grant program to solely fund CCC student housing projects by providing $450M in 2023-24 and $95.4M for 2024-25. Funding for the UC and CSU (about $1.1 billion) will be replaced with segment-issued bonds, coupled with ongoing state funding to cover the bond-related debt services.The California Student Housing Revolving Loan Fund, created in the 2022 Budget Act, will be allocated $300M General Funds per year for six years (each of 2023-24 through 2028-29). This will provide zero-interest loans to qualifying campuses of the UC, the CSU, and the CCC for construction of affordable housing projects.

Additionally, they are agreed to the May Revise proposal that solely funds CCC student housing projects by providing $450M in 2023-24 and $95.4M for 2024-25 and converts about $1.1 billion with UC and CSU segment-issued bonds, coupled with ongoing state funding to cover the bond-related debt services.
TICAS appreciates the long-term commitment to student housing through a new funding mechanism at UC & CSU and continued grant funding for the CCC system. Investing in building affordable student housing is a critical and necessary part of a long-term approach to meet students’ basic needs, lower college costs, make college accessible for our neediest students, and achieve California’s 70 percent postsecondary attainment goal. Moving forward, we ask that students with unique housing needs, such as those with dependents and those without safe, reliable housing be clearly prioritized as the segments build out their student housing projects.
Support in concept the expansion of MCS to foster youth at UC and CSU along with SSCG access for foster youth at the CCCs.No DecisionThe Legislature will include $5.2 million General Fund in 2023-24 and ongoing to expand eligibility for the Middle Class Scholarship to foster youth. This will include changes in trailer bill language to cover the total cost of attendance for CSU and UC students who are current or former foster youth by providing these students with their full award amount.

Additionally, the Legislature will include $14 million ongoing to the Student Success Completion Grant so that students who are current or former foster youth receive $5,250 per semester, or quarterly equivalent, for 12-15 units of study to cover their unmet need.
TICAS believes that foster youth are a key student group that deserves to be prioritized for aid. Prioritizing this group can conceptually set a precedent on how MCS and the SSCG can be restructured to meet the TCOA for our lowest income and most vulnerable students first before moving up the income scale. If paired with Cal Grant Reform in 2024, foster youth would continue to be eligible for their supplemental $5,000 Chafee award while using MCS as a “fill the gap” program to meet their TCOA. We do have some concerns about keeping the full-time unit threshold at the CCC level for access to the SSCG since a majority of CCC students, and likely foster youth, do not attend full time. A more equitable alternative would be to create a sliding scale option that will allow part-time students to get this supplemental award, but overall, this is progress towards a path to debt-free college for foster youth.
Institutional Supports
Support base funding for UC & CSU Compacts and cost-of-living-adjustment for CCC RoadmapThe January budget and May Revision reflect continued support for the multi-year compact that includes a sustained 5% funding increase for the UC and CSU, in exchange for clear commitments to expand student access, equity, and affordability, and to create pathways to high-demand career opportunities. For CCCs, the May Revise includes an increase of $25.4 million ongoing, in addition to the January allocation of $652.6 million, for an 8.22% COLA.The Legislature approved the 5% base increase for both the UC and CSU systems. Additionally, they approved the 8.22% COLA for the CCC systemTICAS supports sustained and reliable funding for our postsecondary systems. Moving forward, policymakers should continue monitoring the segments’ progress towards their respective goals to ensure that increases in funding are directly benefiting students through academic and non-academic support.
Support additional staffing capacity for the CA Student Aid Commission.The May Revise proposes an increase of $397,000 ongoing General Fund currently unallocated for four positions at the California Student Aid Commission to support financial aid programs.The Legislature approved a total of $638,000 for five positions beginning in 2023-24 to support financial aid workload.This funding is critical to ensure that CSAC has the necessary staffing capacity to help implement recent programs and their expanded role implementing Universal FAFSA/CADAA completion at the high school level.
Accountability & High-Quality Education
Support funding for the Cradle-to-Career Data System.Proposes to continue funding the establishment of the Cradle to Career Data System.The Legislature approved $15,260,000 for the Cradle-to-Career Data System.TICAS supports the continued commitment to and funding for C2C. Insights from the data system will be useful in identifying equity and performance gaps, directing resources where needed, and helping students make informed educational and career decisions.

Below are the proposals not found in SB 101. We remain attentive to the final decisions on these investments and policy changes after a budget deal is agreed upon with the Governor’s Office. As we confirm these via Trailer Bills, we will update this document

TICAS 23-24 Budget Priorities after the May ReviseGovernor’s Proposed Higher Ed. & Trailer Bill Language Related Investments for the 23-24 BudgetLegislative Decisions on Higher Ed. Related Investments for the 23-24 BudgetConsiderations for Implementation or Future Policy Design
AssemblySenate
Accountability & High-Quality Education
Reject Trailer Bill Language that will allow out-of-state, online post-secondary institutions to access the Golden State Teacher GrantThe Governor is proposing a policy change which would expand institutional eligibility to the Golden State Teacher Grant to out-of-state online post-secondary institutions, pending approval by the Labor secretary amongst other eligibility requirements.RejectRejectTICAS agrees with the Legislature. Investments to further strengthen the work being done by in-state postsecondary education systems would better serve California’s students rather than expose them to the unnecessary risk of exclusively online programs based out-of-state.
Support and build upon the Trailer Bill Language on Cohort Default Rate (CDR).Proposes the use of the 3-year CDR certified in 2020 for Institutional Eligibility for the Cal Grant program.Approve the May ReviseNo DecisionTICAS agrees with the Governor and Assembly. Additionally, we recommend that California convene a workgroup to explore additional metrics that could build upon or work in tandem with CDR to ensure that that schools meet a meaningful minimum standard to continue receiving access to taxpayer-funded aid.
College Affordability
Support extending the state-wide financial aid application – including the California Dream Act Application (CADAA) – deadline from March 2 to April 2 for the upcoming application cycle.No DecisionApprove Trailer Bill language to extend the Cal Grant deadline by one month in 2024, if FAFSA is not available by Oct. 1, 2023.Adopt trailer bill language that would extend the Cal Grant priority deadline given the pending but delayed launch of new simplified, federal FAFSA form.TICAS agree that students should get additional time to fill out the FAFSA due to the delay of releasing the new application. This deadline extension should be clearly communicated to students, families, and local education agencies across the state through a state-wide public service information campaign that encourages students to fill out their financial aid applications as soon as possible before the deadline, giving higher education institutions the information needed to disseminate financial aid award letters and packages.
Modify the Californians for All College Corps stipend so it is not taxed and supplements financial aid grants.The 2021 Budget Act created and funded the Californians for All College Service Program, which engages low-income college students across the state– including those who are AB 540-eligible – to work alongside their communities on key societal challenges. Participating students earn a $10,000 stipend as well as academic credit.No DecisionNo DecisionTICAS recommends the Legislature develop a solution so that these funds can supplement current financial aid grants and not be taxed or counted as income for participating students. We appreciate this innovative program which can play a role in helping students cover their out-of-pocket costs as part of the debt-free pathway through college. However, we have concerns that the stipend being earned by students could be taxed as income and not treated like financial aid.
Middle Class Scholarship clean-up to exclude certain aid from counting towards MCS award amounts.No DecisionApprove placeholder trailer bill language to exclude some types of aid from MCS calculation.Proposes trailer bill language that exempts emergency housing assistance and emergency basic needs assistance from the MCS funding calculation.TICAS recommends the Legislature adopts this clean-up of MCS. One notable challenge with implementing MCS 2.0 is that award amounts often need to be adjusted throughout the year. These adjustments may happen for several reasons, including to reflect any new gift aid a student receives (such as merit scholarships or emergency grants). These adjustments create frustration and potential hardship among students, particularly when award amounts are reduced partway through the year.
Institutional Supports
Support additional funding for the Cash for College program.The May Revise proposes an increase of $103,000 ongoing General Fund to support CSAC’s Cash for College program.Approve May Revision proposalApprove May ReviseTICAS recommends the Legislature approve this level of funding and consider an increase to match the 2022-23 one-time funding level of $500,000. Last year’s investment in the program allowed Cash for College to expand to several new regions that had not previously received any support, resulting in a record number of financial aid workshops in California. Without matching the previous level of reinvestment, many of these new regional partnerships could face reduced resources and cutbacks, which would set back the progress made last year.
Support and build upon the Student Enrollment and Retention funding at CCCsThe May Revise proposes a decrease of $100 million one-time, for a cumulative total of $100 million to support community college efforts and strategies to increase student retention rates and enrollment.Reject Governor's Budget and May Revise.Reject the May Revision and Governor’s budget proposals. Reduce the amount provided in 2022-23 for recruitment and retention by $46.446 million.TICAS recommends the Legislature approves this funding and ensure that funding prioritizes high-impact student success strategies.