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FOR IMMEDIATE RELEASE
Monday, Dec. 16, 2002
Brad Hayward (510) 987-9200
brad.hayward@ucop.edu

REGENTS CUT 2002-03 UC BUDGET, APPROVE $135 STUDENT FEE INCREASE BEGINNING SPRING 2003

Addressing a growing state budget problem, the University of California Board of Regents today (Dec. 16) adopted mid-year cuts in non-instructional areas of the university's budget and approved a $135-per-quarter student fee increase that will take effect with the spring 2003 term.

Since the beginning of the 2001-02 fiscal year, UC's state-funded budget has taken more than $240 million in cuts, including $74 million in reductions proposed by Gov. Gray Davis this month. The university has foregone an additional $237 million in funding it had expected over the last two years for faculty and staff salary increases and other cost increases under its Partnership Agreement with the Davis administration. In total, the budget shortfall facing the UC system is now approximately $480 million, and it is likely to grow much larger next year.

Meeting in several locations around the state linked by telephone conference call, the Regents approved the latest budget cuts - the $74 million in mid-year cuts proposed by the governor on Dec. 6. The $135 fee increase adopted by the Regents is UC's first increase in mandatory systemwide student fees in eight years. That fee increase, along with additional increases in fees for certain professional school students, will offset a $19 million unallocated reduction the governor had included in his mid-year cuts.

"There can be no doubt that the cuts this year and next year will be very painful," UC President Richard C. Atkinson told the Regents. "At the same time, we realize that we must play a role in resolving the state's budget crisis.

"Our top budget priority must be preserving access and quality in the instructional program. None of us wants to see enrollment caps, reductions in class offerings, or other obstacles that will impede the timely graduation of students. We must preserve access for all UC-eligible students, and we must provide them with the high-quality education expected of the university.

"To achieve these objectives, we need to identify a package of solutions for getting through this budget crisis. A balanced approach is necessary, looking not just at one or two elements of the UC budget, but many. The various actions we will be required to take will be unpopular, and the pain will be spread throughout the university. But again, our principal priority must be to protect the instructional program."

The Legislature has not yet acted on the governor's mid-year proposals, but the Regents ratified them in recognition of the fact that the university now has only half a year to achieve the specified savings and in order to give students and their families as much notice as possible regarding the new fee levels. Any changes the Legislature makes to the governor's proposals will be incorporated into the university's budget at a later date.

The Regents voted 11-4 for the revised 2002-03 budget and the student fee increases. The mid-year cuts reflected in the revised budget include:

  • Administration and libraries: A $20 million cut in general administration, academic administration, and libraries. Each campus and the Office of the President will have discretion to achieve its portion of the cut in locally determined ways.
  • Educational outreach: A $3.3 million reduction to the university's outreach programs to public schools, approximately equivalent to a 5 percent reduction.
  • Public service: A $2.5 million cut for other UC public service programs including Cooperative Extension, which has farm, 4-H, and nutrition, family and consumer sciences advisers throughout the state. The cut is approximately equivalent to a 5 percent reduction.
  • Student services: A $6.3 million cut to student services, approximately equivalent to a 5 percent reduction in Registration Fee-funded programs. Campuses will have local discretion in achieving the necessary savings.
  • K-12 Internet: A $1.1 million reduction for the Digital California Project, which brings the next-generation Internet2 to California public schools.
  • Research: $18 million in one-time savings from unspent prior-year funding for targeted programs including labor research, substance abuse research, and U.S.-Mexico research.
  • AP online: $4 million in one-time savings from unspent prior-year funding for the UC College Preparatory Initiative, which provides online Advanced Placement coursework.

In addition, the governor proposed a $19 million unallocated reduction that the Regents voted to offset through the student fee increase (details below).

Prior to these mid-year cuts, UC had absorbed a series of budget cuts affecting programs including research, educational outreach, teacher professional development, deferred maintenance, libraries, equipment, instructional technology, and the Digital California Project, among others. Student instructional programs have been protected from cuts.

After the mid-year cuts, UC's state-funded budget for 2002-03 will be $3.15 billion.

With the state facing a budget deficit of at least $21 billion, further substantial cuts are expected when the governor issues his 2003-04 state budget proposal in early January. Already, the Davis administration has indicated that most of the UC budget areas taking mid-year cuts this year will be expected to take deeper cuts in 2003-04.

"I know that the budget cuts - particularly next year's cuts - will cause great uncertainty and anxiety among the university's faculty and staff," Atkinson said. "I want them to know that we will do everything possible to minimize the cuts and their potential impact on jobs. The high-quality work of our staff and faculty is the university's most important asset."

The student fee increase of $135 per quarter will begin with the spring 2003 term. At all campuses except UC Berkeley, the spring quarter begins in late March and student fee payments are due by mid-March. At UC Berkeley, the spring semester begins in January, but students will not have to pay the additional fees until mid-semester.

One-third of the revenue raised by the fee increase will be sent directly to financial aid in order to mitigate the impact on lower-income students. Generally, students from families with annual incomes of $60,000 or less will not be impacted by the fee increase.

Mandatory systemwide student fees have not increased at UC since 1994-95; in fact, in the late 1990s they fell 10 percent for resident undergraduates and 5 percent for resident graduate academic students. Currently, excluding the spring 2003 increase, full-year fees are $3,429 for resident undergraduates and $3,609 for resident graduate academic students. (Campus-based miscellaneous fees add to the total.)

The Regents today also approved fee increases beginning with the spring 2003 term for selected professional school programs, recognizing that fees for these programs at UC are now significantly lower than the average at comparable public universities. The differential ranges from $2,200 per year in nursing to $8,400 in medicine.

The fee increases for professional school students, in addition to the $135 systemwide increase, are $150 in nursing and the UCLA theater/film/television program, $250 in pharmacy and optometry, $350 in veterinary medicine, and $400 in medicine, business, law, and dentistry. (All figures are per quarter.)

Student fee levels for the following year, 2003-04, will not be set until spring 2003. Their level will depend on the state's budget situation and the governor's January budget proposal.

A Q&A on student fees is available at http://www.ucop.edu/news/factsheets/2002/student_fees.pdf.

Further details on the Regents' actions are available by clicking on the written Regents' items at http://www.ucop.edu/regents/regmeet/502.pdf and http://www.ucop.edu/regents/regmeet/503.pdf.

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