2011 Year-End Legislative Update

AACC Year -End Legislative Update December 14, 2011AACC Office of Government Relations and ResearchDavid Baime, Senior Vice PresidentJim Hermes, DirectorLaurie Quarles, Legislative Associate

AACC Legislative Update• FY 2012 Funding• Budget Contr ol Act/Deficit “ Super Committee”• Amer ican Jobs Act/Veter ans Legislation• Wor kfor ce Legislation• TAA CCCT Gr ant Pr ogr am• Committee on Measur es of Student Success• The Year Ahead

FY 2012 Labor -HHS-Education Appr opr iations• 3 of 12 Appr opr iations Bills Enacted• 9 Bills to be Passed in Lar ge Package• Continuing Resolution Expir es 12/16• Senate Committee Appr oved LHHS Bill• House Posted Bill – No For mal Action Taken• Level Funding for Many Pr ogr ams – Per kins CTE pr ogr ams

Pell Gr ants• $10 billion Pr ovided by Budget Contr ol Act for FY 2012 – Left $1.3 billion shor tfall to be filled by appr opr iator s• House Dr aft Cuts Total $3.6 billion – Eliminates eligibility for less-than-halftime and ability-to-benefit students – Lower s income pr otection allowances, r educing eligibility

Pell Gr ants• House Cuts, cont’ d – Cuts eligibility fr om 18 to 12 full-time semester s – Changes auto-zer o EFC fr om $30 K to $15 K – Counts EI TC and other funds as income

Pell Gr ants• Senate LHHS Bill Took Much Differ ent Appr oach – Savings by eliminating student loan inter est subsidy dur ing gr ace per iod – House Budget Committee r uling later r educed these savings to $400 million, leaving $900 million to be saved by other means

Wor kfor ce Tr aining Funds• House Bill Slashes WI A Pr ogr ams by $2.2 Billion, or 75% – Advance funding, which is bulk of WI A pr ogr am funding, eliminated – Shift fr om pr ogr am year to fiscal year given as r eason – Cuts would be extr emely difficult to r estor e next year , likely per manent• Senate: Level Funding

Minority Serving Institutions Funding (in $ millions) Type of Minority- Serving Institution Current Proposed Change HEA Title FundedV Hispanic 104.4 17.4 -87.0III Historically Black 237.0 152.0 -85.0III Tribal 26.8 0 -26.8III Alaska Native and 13.4 0 -13.4 Native HawaiianIII Predominantly Black 9.6 0 -9.6III Asian 3.2 0 -3.2 American/Pacific IslanderIII Native American, 3.2 0 -3.2 nontribalTotals $397.6 $169.4 -$228.2

Final FY 2012 LHHS Bill• Deal on Bill Repor tedly Reached, But Not Yet Filed – Dispute over payr oll tax holding up spending bill – One-week CR likely needed• Pell Gr ants – Repor ted Cuts – Cuts eligibility fr om 18 to 12 full-time semester s – Changes auto-zer o EFC fr om $30 K to $20 K – Eliminates eligibility for ATB students

Budget Contr ol Act• Maj or Pr ovisions – Feder al debt limit r aised in stages by $2.1 T – Cr eated 10-year discr etionar y caps – Pr ovided $17 B for Pell over next two FYs by eliminating in-school inter est subsidies on gr aduate student loans – Requir es vote on Balanced Budget Constitutional Amendment by 12/31/11 – Established Joint Select Committee on Deficit Reduction— “ Super Committee”

Budget Contr ol Act• Maj or Pr ovisions, cont’ d – Discr etionar y caps in FYs 12-21 r educe spending by $890 billion over 10 year s – For FY 2012 and FY 2013, separ ate spending caps for secur ity and non-secur ity spending – FY 2012 cap = $1.043 T ($7B below FY 2011 but $24 B higher than House FY 2012 budget)

BCA Sequestr ation• Requir es Cuts of $984 billion for Fiscal Year s 2013 – 2021 – $1.2 tr illion minus $216 in inter est savings – $109 billion per year – split evenly between defense and non-defense – Discr etionar y funding will exper ience an acr oss the boar d cut for FY 2013 – For FYs 2014 – 2021, caps will be lower ed and appr opr iator s have discr etion wher e to cut

BCA Sequestr ation– Mandator y funding subj ect to acr oss-the-boar d cuts thr ough 2021 • Complex for mula to deter mine exact amounts, dependent on pr evious year ’ s outlays– Many pr ogr ams exempt fr om sequestr ation, including Pell Gr ants (discr etionar y por tion 2013 only)– Because of exemptions, r oughly 75% of cuts would come fr om discr etionar y pr ogr ams– Cuts of appr oximately 15% to discr etionar y spending fr om the cur r ent baseline

BCA Sequestr ation• Sequestr ation Not Until Januar y 2013, Leaving Congr ess One Year to “ Fix” Things – Obama vow to veto legislation r educing cuts – Attempts to avoid defense cuts – Fur ther attempts at “ Gr and Bar gain” ?

Amer ican Jobs Act• $447 Billion Over all – $253 billion tax cr edits and cuts – $196 billion spending• Four Main Sections – Tax cuts for small businesses – Tax cuts and spending to encour age hir ing – Unemployment insur ance r efor m and Pathways Back to Wor k fund – Middle class tax r elief

Amer ican Jobs Act—CC Facilities• $5 Billion Pr oposed in FY 2012 for Community College Moder nization and Heavy Equipment – Mor e Than ½ of AGI Funding• Funding Awar ded to States on Basis of Relative Community College Enr ollment• States Lar gely Fr ee to Allocate Funds as They See Fit

Amer ican Jobs Act• Senate Voting on I ndividual Pieces of Package – Tax cr edits for hir ing veter ans only par t of package to pass to date • Par t of lar ger bill that also gr anted an extr a year of Montgomer y GI Bill benefits to older veter ans – All other bills failed to clear filibuster – Vote on school and community college moder nization funds – FAST Act – hoped for next year

WI A Reauthor ization• House Republican Reauthor ization Bills – H.R. 3610: Consolidates up to 33 j ob tr aining pr ogr ams • Response to GAO r epor t – H.R. 3611: Focus on business engagement • Would extend business maj or ity on wor kfor ce investment boar ds• Collins-McCaskill Payr oll Tax Cut Bill – Would r equir e OMB to r ecommend pr ogr am consolidation; half of savings dedicated to deficit r eduction.

TAACCCT Gr ant Pr ogr am• Fir st Round Gr ants – Ranged fr om $2.5 million to near ly $25 million – DOL still wor king with some states to finalize $2.7 million gr ants – Fir st r ound heavily favor ed consor tia gr ants, r eflecting applicant pool• Second Round Announcement Expected Next Month• No I mminent Thr eats to Funding – But Stay Vigilant!

Committee on Measur es of Student Success• Cr eated by Congr ess in 2008 HEA Amendments to Review and Suggest Changes to Two-Year Gr aduation Rate Calculation• Repor t Submitted to ED Secr etar y• Substantial Modifications to Cur r ent Calculation Recommended• ED Will Next Decide How to I mplement; I PEDS Route Likeliest

Committee on Measur es of Student Success• Recommendations I nclude: – I ncluding tr ansfer s in completion r ate – Adding par t-time students to r epor ting in separ ate cohor t for par t-time students – Separ ate cohor t for r emedial students – Longer time-fr ame for tr acking• AACC Has Submitted Comments and Will Wor k to I nfluence I mplementation

The Year Ahead• Budget I ssues Will Dominate 2012 Congr essional Agenda• Looming Sequestr ation• Obama Budget• Pr esidential Election Politics• Bush Tax Cuts Due to Expir e in 2012• Br oader Economic Developments—Likely to Rock US• Pr one to Br inksmanship

Contact I nfor mation• David Baime – 202-728-0200 x224, dbaime@aacc.nche.edu• Jim Her mes – 202-728-0200 x216, j her mes@aacc.nche.edu• Laur ie Quar les – 202-728-0200 x249, lquar les@aacc.nche.edu

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2011 Year-End Legislative Update

by American Association of Community Colleges

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