January 12, 2004
Governor's budget proposal cuts UC system
By Brad Hayward
UC Office of the President
Gov. Arnold Schwarzenegger issued a 2004-05 state budget proposal today
(Jan. 9) with $372 million in cuts for the University of California
Fall 2004 freshman enrollment would be reduced 10 percent
Spending on faculty would be cut 5 percent, aimed at
increasing student-faculty ratio
Fees would increase 10 percent for undergraduates,
more for graduate/professional
Financial aid would be cut from 33 percent of new student
fee revenue to 20 percent
Deeper cuts proposed for outreach, research, administration,
UC Merced would open in fall 2005 at modified level
President Dynes offers additional comments in his newsletter
for faculty and staff, Our
The proposed cuts would reduce student enrollments, raise student fees,
scale back student financial aid, reduce spending on faculty, eliminate
K-12 outreach, and make deeper cuts to research, administration, and
The governor's proposals are part of a series of statewide cuts intended
to help close a $14 billion state budget shortfall.
The proposals, for the fiscal year starting July 1, will need the
Legislature's approval to take effect. Final decisions will not be made
until this summer.
"The governor is making difficult choices, and asking many parts
of state government to sacrifice, as the state confronts a massive budget
deficit," said UC President Robert C. Dynes. "That is understandable.
But it also should be understood that these cuts, coming on top of deep
previous budget cuts, would have a very serious impact on the University
of California and its tradition of providing a top-quality, accessible,
affordable education for Californians.
"UC is recognized worldwide and in our own communities for the
extraordinary opportunities it offers our state's young people and for
the profound impact it has on California's economic growth and global
competitiveness. It is an institution that helps our people achieve
their hopes and dreams. The continuing trend of reduced state funding
for UC makes me deeply concerned about our ability to deliver on the
promise that the University of California has always represented for
the people of California.
"I intend to work with the governor, the Legislature and the Board
of Regents to minimize these cuts and their impact, to seek restoration
of funding as the economy improves, and to preserve what the University
of California has always meant for California."
The budget, and the university's response to it, will be discussed
in more detail at next week's Board of Regents meeting.
The $372 million in program cuts represent the fourth consecutive year
of such cuts to the UC system. The proposed budget for UC also includes
$145 million in augmentations, largely consisting of restoration of
$80.5 million in one-time cuts in the 2003-04 budget, funding for annuitant
health benefits, and other items. As a result, UC's net state-funded
operating budget in 2004-05 would be $2.67 billion, or 8 percent less
than the current $2.9 billion.
Measured another way, the governor's budget, when combined with prior
cuts, would leave the university with $530 million less in net state
funding than it had in the 2000-01 fiscal year -- a decline in state
support of more than 16 percent during a period when enrollments have
grown by more than 15 percent. Already, every area of university spending
has been cut, student fees have increased significantly, employee positions
have been eliminated, and faculty and staff have been denied cost-of-living
PROPOSED PROGRAM CUTS
Major elements of the governor's 2004-05 proposal include:
Enrollments: UC's freshman enrollment in fall 2004 would
be cut 10 percent, or approximately 3,200 students, below this year's
level, saving $24.8 million. As a result, some freshman applicants who
have met UC's academic eligibility requirements would not be granted
admission to a UC campus this fall. The Schwarzenegger Administration
is encouraging these students to attend community college through a
Dual Admissions Program and proposes that their community college fees
be waived. In addition, $1.6 million would be provided for UC counselors
to work in the community colleges, helping students prepare to transfer
to UC campuses and ultimately obtain a UC degree. UC will be reviewing
the impact of the governor's budget on transfer enrollments.
Faculty: A cut of 5 percent ($35.3 million) in spending
on faculty. The Schwarzenegger Administration's intention is to increase
the student-faculty ratio to 20.7 to 1; currently it is 19.7 to 1. If
this cut stands, the university likely would give campuses discretion
to make the cut in a manner that preserves instructional programs as
best they can.
Administration and libraries: A 7.5 percent cut to academic
and administrative support, including libraries, on top of the cuts
these areas already have taken. This is a $45.4 million reduction, in
addition to a $36.5 million reduction that occurred this year.
K-12 outreach: Elimination of all remaining state funding
($33.3 million) for UC's programs working with K-12 schools and students
to improve academic performance and college preparation, particularly
in educationally disadvantaged areas. These programs were cut 50 percent
in the 2003-04 budget, and the Schwarzenegger Administration already
has implemented a mid-year cut of $12.2 million to these programs.
Research: A 5 percent ($11.6 million) reduction in state-funded
research, on top of the 20 percent cut these programs have taken over
the last two years. In addition, $4 million in funding for one specific
research program, the Institute for Labor and Employment, would be eliminated
UC Merced: The university's 10th campus would open to
students in fall 2005. The proposed budget provides $10 million in onetime
money to continue development of the campus (in addition to $10 million
in permanent funding), whereas the campus estimated that $20 million
in onetime funding was needed to maintain the original plan for opening;
thus, significant modifications would be necessary. If the proposed
level of funding stands, the university will need to examine the range
and scope of academic programs and services available on opening day.
The university will continue to hold the goals of serving Central Valley
students and delivering the highest-quality academic programs within
a modified campus plan. "UC Merced remains critical to expanding
educational opportunity in the San Joaquin Valley and to UC's long-term
ability to accommodate growing college demand statewide," Dynes
K-12 Internet: Elimination of remaining funding ($14.3
million) for the Digital California Project, which brings the Internet2
to California public schools. The budget notes that K-12 schools could
contribute voluntarily to continue the program.
Salaries: There would be no state funding, once again,
for cost-of-living increases for faculty and staff. Because competitive
compensation is key to the recruitment and retention of faculty and
staff, UC is very concerned about this continuing trend.
Clinical enterprise: The effects of the governor's budget
on UC's clinical enterprise have not yet been determined; UC will be
analyzing this issue in the coming days.
STUDENT FEES AND FINANCIAL AID
The governor's budget proposes the following in the areas of student
fees and financial aid:
Financial aid. The budget proposes a major curtailment
of financial aid for UC students. Whereas increased financial aid has
helped UC students weather prior fee increases, the governor's current
proposal is to reduce the proportion of new fee revenue that UC directs
to financial aid from 33 percent to 20 percent. In addition, the governor's
budget does not increase Cal Grants to cover the proposed fee increase
at UC. These policy proposals are of significant concern to UC because
they would have a significant effect on access of lower-income students
to public higher education. If these proposals stand, UC would need
to consider alternatives for preserving access for lower-income students,
such as rescinding a program started just this year in which UC provides
grant aid to many financially needy students with family incomes of
between $60,000 and $90,000 per year.
Resident undergraduate fees: A 10 percent increase.
Mandatory systemwide fees would increase by $498 from the current $4,984
per year to $5,482 per year. With the inclusion of campus-based miscellaneous
fees, the systemwide average for resident undergraduates would be $6,028
per year. The governor's budget also states the Schwarzenegger Administration's
support for a long-term fee policy in which student fees would increase
regularly in line with per-capita personal income, but not by more than
10 percent in a given year. The university believes such a policy should
take account of overall state funding available for UC programs, however.
Fee surcharge for extra units: The governor's budget
proposes that undergraduates taking more than 110 percent of the credit
hours required for graduation be charged at a higher fee rate, such
as the nonresident rate or at the full cost of instruction. The budget
suggests that such a policy be phased in and assumes $9 million in savings
the first year.
Resident academic graduate fees: A 40 percent increase.
Mandatory systemwide fees would increase by $2,088 from the current
$5,219 per year to $7,307 per year. With the inclusion of campus-based
miscellaneous fees, the systemwide fee average for resident academic
graduate students would be $8,931 per year. The governor's proposal
also contains a long-term policy goal that academic graduate students
ultimately pay 50 percent more in fees than undergraduates.
Professional school fees. The governor's budget proposes
that state support for the operation of most professional schools be
reduced by an average of 25 percent, and that student fees fill the
gap. Specific figures would vary, but for medicine, law and business
administration, for instance, the fee increase would be roughly $5,000
-- without any provision for financial aid, which UC considers a high
priority. The Schwarzenegger Administration exempted nursing from its
Nonresident tuition: A 20 percent increase, or $2,746
for undergraduates and $2,449 for academic graduate students. Out-of-state
students also pay mandatory systemwide fees and campus-based miscellaneous
fees in addition to nonresident tuition; the average annual total under
the governor's budget would increase to $24,672 for undergraduates and
$23,968 for academic graduate students.
The UC Regents are not expected to set fall 2004 fee levels until later
this winter or spring.
The governor's budget also contains a capital budget of $339 million
in general-obligation bond funding for UC construction, earthquake retrofit
and infrastructure renewal projects. These funds are contingent upon
voter approval of Proposition 55, a statewide education bond measure
on the March 2 ballot. There also is $55 million in lease-revenue bond
funding for an agricultural genomics building at UC Riverside, funded
through UC's sale of a parcel of land.
The governor's budget is available online at http://www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm
Return to Front Page