The Governor proposes to increase California Community College (CCC) fees from $26 per unit to $36 per unit beginning on July 2011. We believe that a fee increase should be an important component of the state’s budget strategy for CCC, as it would leverage more federal funds (in the form of federal tax credits) to mitigate programmatic impacts on CCC instruction and services, while having no negative effect on financially needy students (who do not pay fees). While the Governor is on the right track, the Legislature might consider going even further in the budget year to tap additional federal dollars in support of the CCC system. In future years, we recommend the Legislature ensure that CCC fee levels are pegged to the maximum amount covered by federal tax credits.