UC Regents discuss grim fiscal future

Tuition increases possible in short-term, while long-term picture worsens

Lt. Gov. Gavin Newsom addressed the regents, urging them to "critically analyze the mission and the broader challenges of the system."
Javier Panzar/Senior Staff
Lt. Gov. Gavin Newsom addressed the regents, urging them to "critically analyze the mission and the broader challenges of the system."

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SACRAMENTO — The UC Board of Regents met under ominous circumstances Wednesday as the immediate and long-term future for the university was put in disarray by volatile fiscal developments in the state’s capital.

With Monday’s announcement that the state’s budget deficit had ballooned from $9 billion to nearly $16 billion, the regents emphasized the need for increased advocacy to prevent further fee increases and steep cuts in financial aid that could result from Gov. Jerry Brown’s plan.

But with the state’s financial situation changing rapidly, few at the meeting were optimistic.

For the moment, members of the board and student leaders are embarking on an extensive lobbying effort in the state Capitol, hoping to convince lawmakers to increase the university’s funding by $125 million to “buy out” a proposed 6 percent fee increase scheduled to be voted on at the board’s July meeting.

“We think, in the best case scenario, it is the governor’s proposal plus a tuition buyout, but the worst case scenario — I am not sure any of us are willing to speculate what that might mean,” said UC Senior Vice President for External Relations Daniel Dooley. “What is clear is it is going to take a lot of diligence and continuing advocacy to maintain our position.”

While the lobbying efforts took center stage for most of the meeting, the specter of continuing state divestment loomed over the second half of the meeting. The UC is seeking a multi-year financial agreement with the state to provide new funds to cover a $300 million annual budget shortfall over the next five years.

But the agreement is on uncertain ground.

If Brown’s tax initiative on the November ballot — which would generate $9 billion a year for the state — does not pass, the university is going to be cut $250 million, an increase from Brown’s previous estimations.

If that kind of cut were to be dealt to the university, board chair Sherry Lansing said the system’s financial situation would go from being “horrific” to “overwhelming.”

As the conversation took an increasingly dire tone, Lt. Gov. Gavin Newsom urged the board to critically reassess the size and shape of the university — a suggestion many regents took to heart.

“If we don’t have a substantive, detailed conversation … about alternatives to deal with the magnitude of the shortfalls, then our default will always be tuition hikes,” Newsom said. “We are not talking 6 percent, we are not talking 10 percent, 12. We are talking 15, 20-plus percent on a consistent basis, unless we have a very grand conversation about where we are going and the mission and the broader challenges of the system.”

Lansing then scheduled a meeting of the regents in July to consider long-term changes to the university’s structure to meet worst case scenarios. Many said the university needed to be open to making drastic changes.

“We need to put our thinking caps on and figure out what we are going to do if the worst happens,” said Regent Norman Pattiz.

While the rest of the board was discussing long-term issues, incoming Student Regent Jonathan Stein tried to steer the conversation back to the more immediate issue of Brown’s tax initiative. Though individual members have endorsed the initiative, the board has not, a move Stein said was “poisoning” its relationship with state lawmakers.

“Let’s assume these tax initiatives don’t pass —  we will be first on the chopping block,” he said, urging the board to publicly endorse Brown’s tax initiative. “And let’s assume that they do pass — it is going to be really difficult for us to go to legislators at that point with our hands out and ask them for money or favors.”