FOR IMMEDIATE RELEASE
GOVERNOR ANNOUNCES MID-YEAR BUDGET CUTS
Cuts at UC Target Administration, Other Non-Instructional
Facing a major state budget deficit, Gov. Gray Davis proposed mid-year spending reductions across state government today (Dec. 6), including cuts in non-instructional areas at the University of California.
The governor proposed $74 million in mid-year cuts at UC, on top of cuts already implemented this year. Areas affected include administration, libraries, K-12 outreach, Cooperative Extension and other public service programs, student services, and certain state-funded research programs.
The cuts also include a $19 million unallocated budget reduction for UC. To close this gap without reductions in instructional programs, the Board of Regents will be asked to approve a $135 increase in mandatory systemwide student fees for the spring 2003 term - the university's first such fee increase in eight years. Additional fee increases also would be assessed to professional school students in the spring 2003 term.
"These budget cuts will be painful because we have already absorbed major cuts and the university's funding is now significantly below the minimum called for in our Partnership Agreement with the governor's office," said UC President Richard C. Atkinson. "But we also know that the university must play a role in the state's budget solutions. The university's principal priority is preserving access and quality in the instructional program, even amid budget cuts, and the governor's proposals are consistent with that priority.
"It is with great reluctance that we are considering even a modest student fee increase. But we must look to a package of solutions if we are to ensure that students will continue to have access to the classes they need to graduate on time and will continue to receive the high-quality education they expect of UC."
The state of California is facing a budget deficit estimated at more than $21 billion - an amount equivalent to approximately one-fourth of the current state budget. The governor today proposed a total of $10.2 billion in budget actions over a two-year period to reduce the gap, including $3.4 billion in actions for the current 2002-03 fiscal year. More substantial cuts are expected when the governor releases his 2003-04 state budget proposal in January.
"I remain optimistic about the long-term economic future of California, and thus the long-term budget future of the University of California," said Larry Hershman, UC vice president for budget. "But the short term will be very difficult, and next year we can expect even deeper cuts than those proposed today. We will be looking at a variety of options for absorbing those cuts in a way that protects our commitment to access and quality in the core instructional program."
The governor has called a special session beginning Dec. 9 for the Legislature to consider his mid-year proposals. The Board of Regents will hold a special meeting Dec. 16 to take action on a final 2002-03 university budget that incorporates the new cuts and to consider the proposed fee increases. If the Legislature makes changes to the governor's proposals announced today, those changes will be incorporated into the university's budget at a later date.
New 2002-03 mid-year budget cuts
The governor's announcement today includes the following budget cuts at the University of California, to be implemented in the current fiscal year:
All of the governor's mid-year budget proposals are available at http://www.dof.ca.gov/HTML/BUD_DOCS/midyr02.pdf.
Previously enacted 2002-03 budget cuts
The cuts announced today for UC come on top of budget cuts already enacted during the budget process for 2002-03. The prior cuts include:
In addition, the 2002-03 budget provided only 1.5 percent for merit increases for eligible faculty and staff, far less than what the university needs to stay competitive.
Even prior to these cuts, UC's state-funded budget was $237 million below what is called for in the Partnership, the agreement between UC and the Davis administration that outlines the university's minimum funding requirements.
Including the new mid-year cuts, UC's state-funded budget for 2002-03 would total $3.15 billion.
Spring 2003 student fees
To address the governor's $19 million unallocated reduction
for this year, the UC administration will propose to the Board
of Regents that mandatory systemwide student fees be increased
$135 per quarter beginning with the spring 2003 term. In addition,
student fees for professional school programs (medicine, law,
business, dentistry, pharmacy, optometry, nursing, veterinary
medicine, and theater/film/television) would increase by between
$150 and $400 per quarter beginning in spring 2003 - in addition
to the $135 systemwide increase - with the amounts varying
One-third of the revenue raised by the fee increase would 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 would 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, 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.)
Fee increases beyond the $135 increase are being proposed for the professional schools in recognition of the fact that fees for all of UC's professional school programs 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 proposed professional school fee increases, in addition to the $135 systemwide increase, are $150 in nursing and theater/film/television, $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 early 2003. Last month, the Regents approved a request for a state-funded budget increase of 9 percent in 2003-04, based on the Partnership Agreement. The budget request included either a 6.5 percent increase in mandatory systemwide fees and professional school fees next year or an equivalent amount of state funding. However, final fee levels are likely to differ based on the state's budget situation and the governor's January proposal.
A Q&A on UC student fees is available at http://www.ucop.edu/news/factsheets/2002/student_fees.pdf.
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