Three years have now passed since the original work by the panel, and these years
produced startling changes in the state's fortunes. Higher education policy in the
first half of this decade was marked by severe budgetary constraints that resulted
in significant reductions in enrollment in California's three higher education segments:
the University of California (UC), the California State University (CSU), and the
California Community Colleges (CCC). The severe budget cuts were accompanied by declines
in student financial aid, increases in student fees and a huge growth in student
loans.
Total undergraduate enrollment declined by over 200,000 students (10.6%) from
1991 to 1995. Although all three segments were affected, the magnitudes and length
of the decline varied. The University of California dropped the least; from the high
point in 1991 to the low point in 1994, enrollment declined by almost 3,500 undergraduate
students (2.8%). The enrollment decline at California State University began in 1990
and by 1994 totaled some 35,000 students (11.9%). Enrollment at the community colleges
declined by 179,000 (11.8%) in the three years from 1991 to 1994.3
During this time, student fees were increased at an alarming rate to partially
offset the loss of revenue, but this only exacerbated the access problem. The staggering
economy created a fiscal squeeze that dramatically slowed and in some cases actually
reversed the state's net in-migration pattern. The Department of Finance Demographic
Research Unit lowered its projected numbers of high school graduates each year during
that period as the expected in-migration to California failed to materialize. This
was reflected in smaller cohorts than originally projected for virtually every year
during the first half of the 1990s.
The policy discussion throughout this period focused on the bleak prospect that
given the deteriorating economy, California's higher education system was in serious
jeopardy. The state could not maintain its historic commitment to access under the
constant onslaught of competing demands from other social services--health and welfare,
childcare, K-12 education, and prisons among them. The four-year segments were understandably
relieved when the governor entered into a four-year "compact" with them
to provide a modest, but "guaranteed" 2% general fund increase in the first
year (1995-96) and a 4% annual budget increase for each of the three subsequent years.
This compact was designed to stem the tide of reductions and provide a "framework
for budgetary stability."4 The agreement provided
for enrollment growth of 1% annually, increases in student aid, and some modest productivity
gains.
At the same time that the economy was reeling, student aspirations for higher
education were apparently increasing. High school students were dropping out less,
getting better grades, enrolling in college preparatory courses in greater numbers,
taking more college placement tests, and successfully completing more advanced placement
courses. In sum, aspirations were rising at the same time the paths to access were
constricting.
What a difference a surging economy makes. In 1994-95 the recovery had just begun,
but even the most optimistic scenarios did not foresee the kind of recovery that
California has recently enjoyed. By 1998, California was awash with dollars and options.
In the course of those three years the California economy rebounded so startlingly
that the budget debate centered not on reductions this year, but on what to do with
the second largest surplus in the state's history. The recurring policy split--whether
excess revenue ought be used for tax reductions or increases in government services--was
resolved when the parties agreed there were enough resources to do both.
