Yudof to recommend 9.6 percent fee hike at Regents meeting

Wook Lee/Staff

After being hit with $650 million in cuts from state funding, UC President Mark Yudof will propose the implementation of a 9.6 percent tuition increase at the UC Board of Regents meeting in less than two weeks as part of an effort to overcome what could amount to over $1 billion in funding challenges for the university.

Patrick Lenz, the vice president for budget and capital resources for the UC Office of the President, told The Daily Californian Friday that although Yudof will recommend the increase, the timing for its implementation has yet to be decided.

Previously, Yudof had said that the university could absorb the $500 million cut — which was signed into law in March — without raising tuition but that any additional cuts would likely mean fee hikes throughout the UC system. In November, the regents approved an 8 percent hike that is set in place for the upcoming academic year.

“We responded and presented to the regents in May that if in fact we were to receive any additional cuts that we would have to offset those cuts with a dollar-for-dollar fee increase,” Lenz said. “We felt like all the creative options to mitigate those other cuts without raising fees to cover them … we’ve pulled out all those financing mechanisms, and we’re employing them. So to believe that we have an ability to go beyond what we were already doing, I think, was fairly unrealistic.”

The Academic Council — the administrative arm of the systemwide Academic Senate — adopted a resolution June 30 advising Yudof to request that the regents increase mandatory systemwide charges effective in the fall of 2011 to offset the additional $150 million reduction in state funding.

“The Council is dismayed by the State’s continuing disinvestment in higher education,” a letter from the Academic Council reads. “Our advice to request an additional fee increase is based on Council’s recognition that the University cannot maintain its excellence with the State’s budgeted funding and must find additional revenue.”

In the 2008-09 school year, California resident undergraduate students at the UC paid roughly $7,000. If the 9.6 percent tuition increase is approved, those same students — who would now be entering their senior year — would pay more than $12,200 annually.

“Those who are in power now, when they were college-aged and went to the UC, it was practically free, but for some reason when it’s our turn, it will be more than ever,” said Student Regent Alfredo Mireles Jr., who said he will be voting against the tuition increase. “I hope when it’s our generation’s turn to be leaders, we show more compassion and make sure the next generation of students aren’t so negatively impacted.”

By approving the 8 percent tuition increase in November, the regents assumed $115 million in net revenue. However, that revenue does not come close to dealing with the $500 million reduction the UC was hit with in March, Lenz said.

That cut was also compounded by $362 million in mandatory costs — such as the university’s retirement contributions, energy costs and health costs — and resulted in a $862 million funding challenge for the university, according to Lenz.

With the additional $150 million cut passed in the state budget, Lenz said the UC’s funding problem totals to over $1 billion, though the 9.6 percent fee increase could bring in an additional $265 million in revenue should it be approved by the regents.

Additionally, Lenz said the UC could still face up to an additional $100 million in cuts should the state not realize $4 billion in tax revenues, which the recently passed budget plan relies on, though the UC does not yet have a specific plan of action should those midyear cuts become a reality.

“I think what’s happening is short of criminal, in the state’s failure to invest in what we feel is this economic engine and the kind of knowledge within our students that lead to a quality workforce that really could help the state rebound and gain fiscal stability,” he said.

Allie Bidwell is the news editor.