New Analysis Shows How California Community Colleges Could Cut Millions in Spending

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New Analysis Shows How California Community Colleges Could Cut Millions in Spending
We analyze a recent report from California Watch that suggests millions could be saved at the state’s 72 community colleges through consolidation of administrative resources.
California community colleges have faced a recent cash crunch that has resulted in thousands of students ending up on wait lists rather than in classes. A new study reveals that many of those students could find classroom space if the two-year colleges in the state were willing to coordinate at least a portion of their administrative staffs. The savings would not be insignificant, according to the recent analysis – in fact, tens of millions could be allocated for classroom resources by making consolidation decisions in college districts across California.
 
Analysis Offers Insight into Spending Patterns
 
The analysis was conducted by California Watch, a nonpartisan, investigative reporting center that performs a wide range of investigative reporting for the state. The group specializes in fields like public health, environment and education. According to the California Watch website, the award-winning team is supported by grants from a number of organizations, including the James Irvine Foundation and The California Endowment.
 
To complete this analysis, members of California Watch dug deep into the bureaucracy of the California Community College system, the largest of its kind in the United States. An additional article on the group’s website explains that a data-clustering algorithm was used to group districts into clusters within a 20-mile radius of one another. Using that model, 40 districts were sectioned into six clusters.
 
The group took a closer look at 16 districts in the state, using information like payroll data, size and proximity to one another. In addition to successfully identifying the spending patterns of the community college system, California Watch also discovered a myriad of reasons why reform of those patterns may be easier said than done.
 
Millions Spent on Duplicate Jobs
 
The San Francisco Chronicle reports that those 16 districts had duplication in 21 of their executive or management positions. That number did not include chancellors or presidents, which were appointed in each individual district as well. The total number of employees at this level was 253, earning a cumulative salary of $30 million, with an additional $7.9 million in benefits for those employees.
 
California Watch found that the cost of employing just 15 executives plus their support staff could cost a college district as much as $6 million. Three districts in the state employed 130 executives in 2010. The cost of running boards for the same three California districts was $1.7 million, which included elections, stipends for members, and travel expenses. If those districts consolidated their leadership to one chancellor, one board and one head for each administrative office, the cumulative savings could be as high as $4.9 million.
 
The money saved in just those three California community college districts could be enough to put 940 more classes on campuses in the state. With 470,000 students wait-listed at the start of the 2012-2013 school year, those additional classes could clearly be put to good use. If all of the state’s 72 community college districts practiced similar cost savings efforts, the amount of money that could be taken from administrative costs and moved directly to the classroom could amount to tens of millions of dollars.
 
That amount adds up to much more than chump change for a community college system that has been suffering severe budget cuts for the past few years. The Desert Sun reports that since 2007, state support for the community college system has dropped significantly – from a record high $3.9 billion in 2007 to just $2.6 billion last year. To make up the difference, community colleges have cut class offerings by more than a quarter since 2008, which has resulted in the tens of thousands students currently on class wait lists.
 
Why Changes May Not Come
 
Some of the community college leaders in the state agree that consolidation would put schools on the right track for proper redistribution of spending. Riverside Community College District Chancellor Gregory Gray believes the savings could be even higher than what California Watch reported in their analysis.
 
“In this one district alone, you could easily save $5, $6, $7 million,” Gray told California Watch. “Multiply that up and down the state and you get a big number.”
 
However, Gray admits that the potential savings may never be brought to fruition in California. He explains that there are many stopgaps in place to prevent the loss of executive positions from the system, and overcoming those stopgaps may very well be easier said than done.
 
“It is extremely difficult for a local chancellor like myself to try and initiate this type of discussion unless it’s really starting from the top,” Gray stated.
 
The state is deeply entrenched in a system of local governance that would be difficult – if not impossible – to overturn. Each school district prides itself on self-governance and would probably not be open to giving up some of that power to an outside entity, even if that entity was doing similar work just a few miles away.
 
In addition, obscure statutes in the state’s Education Code make it difficult to save money through mergers over the short term. For example, the code prohibits colleges from laying off administrators for the first two years after a merger, which means salaries would continue to be paid for those employees – in some cases large salaries that would keep the districts cash-strapped for those two years.
 
Despite the roadblocks facing any potential merger, California residents appear to favor the idea of merging college governance to save money. California Watch found that the overwhelming majority of residents surveyed said they would favor consolidation for the purpose of cost savings. Whether that consolidation ever comes to fruition in the state is a matter that remains to be seen.

Additional Resources [+]
New Law Brings Accountability to California Community Colleges
New Law Brings Accountability to California Community Colleges
Innovative Ways Community Colleges are Bringing Youth to their Campuses
Innovative Ways Community Colleges are Bringing Youth to their Campuses
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