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FOR IMMEDIATE RELEASE
Wednesday, May 14, 2003

Brad Hayward (510) 987-9091
brad.hayward@ucop.edu

GOVERNOR'S MAY REVISION PUTS PRIORITY ON EDUCATION, PROPOSES NO ADDITIONAL BUDGET CUTS FOR UC

Releasing the "May Revision" to his 2003-04 state budget proposal today (May 14), Gov. Gray Davis proposed no additional cuts for the University of California beyond those already proposed in January.

"We are grateful to the governor for placing a priority on public education in this time of great fiscal distress for the state," said Larry Hershman, UC vice president for budget. "The governor clearly recognizes the major role UC can play in stimulating Californias economic recovery, and he shares our view that we must continue providing access for all UC-eligible students."

The governor's original January budget proposal still includes $300 million in base budget cuts for UC as part of a plan to address a state budget deficit originally estimated at $35 billion and which the governor now puts at $38 billion. When cuts of the last two years are included and offsetting revenue from possible fee increases is accounted for, UC by next year will have taken $360 million in base budget cuts.

As a result, over a three-year period ending next year, UC's enrollment will have grown by 18 percent while its state-funded budget will have fallen 6 percent.

Programs across the University are being cut, many in the range of 20 percent to 50 percent, and many are planning for layoffs. Essentially every program area outside of student instruction — including administration, libraries, research, student services, Cooperative Extension, and many others — is facing significant cuts. Faculty salaries will lag UC's comparison institutions by about 9 percent, and UC faces similar challenges with respect to staff salaries.

In addition to state budget cuts, UC is contending with more than $100 million in cost increases for which it is receiving no new state funding including skyrocketing health benefit costs, significantly increased energy costs, and unfunded costs related to the maintenance of new space.

As one part of the budget impact, mandatory systemwide student fees have been proposed to increase in 2003-04, including a $795 annual increase for resident undergraduates in addition to the $405 annualized increase adopted by the Board of Regents for the spring 2003 term. Financial aid would be increased, covering the fee increase for approximately 40 percent of all UC students. As a result, in general, financially needy students from families with annual incomes of $60,000 or less would not have to pay the fee increase, and financially needy students from families with annual incomes of up to $90,000 would receive a grant covering a portion of the fee increase.

However, there are now proposals from the Legislature that would cut the University of Californias budget by an additional $80 million to $400 million beyond the governor's January proposals. The Board of Regents will not set 2003-04 student fee levels until June or July, when more information should be available about the final state budget outcome.

"We are going to work hard to support the governor's budget, emphasizing that it offers a balanced approach despite the deep cuts it imposes," Hershman said. "The even further cuts contained in the proposals from the Legislature would do great harm to the University and could lead to additional student fee increases, constraints on new enrollments starting in 2004-05, or both. We will vigorously oppose these additional cuts."

The May Revision is available at:

http://www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm

Information about student fees is at:

http://www.ucop.edu/news/factsheets/2003/student_fees.pdf

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