The UC system could receive a $250 million budget cut and no tuition buyout for the upcoming school year if Gov. Jerry Brown’s tax initiative fails to pass when voters go to the polls this November.
According to next week’s UC Board of Regents meeting agenda, if the tax initiative does not pass on the November ballot, a 20.3 percent midyear tuition increase is likely. This would also mean the proposed tuition increase buyout in the recently passed state budget would not be available for the upcoming school year, creating a $125.4 million gap, for a total shortfall of $375.4 million for the UC system.
“This would bring the total funding cut by the State in a two-year period to $1 billion, an overwhelming amount in a very short time period,” the agenda item of the regents’ Committee on Finance states. “Therefore, it may be necessary to consider a mid-year tuition increase of 20.3 percent effective January 1, 2013 … If that were to occur, mandatory systemwide tuition and fees would rise from $12,192 in 2011-12 to $14,670 in 2012-13.”
The item also states the budget package adopted by Brown last month includes a provision for the UC system to receive another $125.4 million in 2013-14 not only if the tax initiative passes, but also if the board votes to not increase the mandatory systemwide tuition and fee increases for 2012-13.
Darius Kemp, director of organizing and communications for the UC Student Association, said the proposal is a good reason for students to vote in the fall election.
“We always knew there would be systemic problems if continued cuts happened with the state government,” Kemp said. “This has a direct impact on students if the initiative does not pass because the buyout won’t happen and there will be potential fee increases in the future.”
The board will convene July 17 and 18 at the UCSF Mission Bay campus for its regularly scheduled July meeting, at which the regents will vote on whether to endorse the tax initiative.
While UC President Mark Yudof and board chair Sherry Lansing have come out publicly in favor of the tax initiative, there are many restrictions for the regents to partake in active campaigning, according to UC spokesperson Dianne Klein.
ASUC President Connor Landgraf said the ASUC will send representatives to the regents’ meeting. He added that although the initiative will not alleviate all problems, students need to rally behind it.
Student Regent Jonathan Stein said it is vital for the regents to endorse the initiative on behalf of the university.
“Students must mobilize. We must get out of the vote,” Stein said in an email. “This is hugely important for our education, and for the education of the students that come after us.”
News editor Adelyn Baxter contributed to this report.
Anjuli Sastry is an assistant news editor.
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if there’s money for scholarships for illegal aliens, and money for the high-speed boondoggle, then there’s no need for higher taxes.
vote NO
the people of California voted to put the bonds for high-speed rail. the politicians wouldn’t be able to re-allocate it to operating expenses even if they wanted to.
This is pretty outrageous. As a Cal grad, I find it extremely
upsetting to see that tuition has skyrocketed by more than 300% than
when I graduated over ten years ago. The Educational Industrial Complex
has proven no different than the Healthcare or Military Industrial
Complex in that costs can continue to rise simply because that’s what every
other player does and no other alternatives are provided. But the
pensions, the number of administrators, the 200K+ salaries are just all
over the top. But it’s just basic nature– it’s much easier to shaft the
young and kick the can down the road. I hope one day we can watch this all self-destruct and start over with a fresh, creative approach to realizing the goals of a higher education, but voting for a tax increase in one of the most tax heavy states in the country just feels like throwing good money after bad.
High annual salaries aren’t the problem.
Ongoing unfunded pension liabilities are what is killing the UC.
and what determines future pensions if not today’s salaries?
Meanwhile the state legislature authorized the sale of high speed rail bonds that will add over $700 million dollars of yearly interest payments to the budget.
I really hate the HSR. The money we are going to throw away on that train could revolutionize public transportation in the Bay Area and Los Angeles area. We could move hundreds of thousands of people each day instead of the few thousand from the train.
Meanwhile the state legislature authorized the sale of high speed rail bonds that will add over $700 million dollars of yearly interest payments to the budget.
I totally agree. Students should vote. However, do a little research. If your parents pay your tuition, are they better off with 7 years of higher income tax, including taxes on capital gains (real estate, stocks and mutual funds) in return for a promised tuition freeze that may not last beyond one semester? If you are a low income student now and don’t pay much tuition, will higher income taxes reduce your already-low tuition? If you have younger siblings applying to UC, will higher taxes entice UC to reduce its addiction to non-resident tuition? What percentage of new California taxes are likely to be taken by public employee unions, and what percentage would be left for higher education once K-12 school systems, prisons, Obamacare Medi-Cal expansion and Governor Brown’s High Speed Rail to Nowhere take their share? Read some national business journals, see what corporations think of California’s high taxation and regulations, and judge for yourself whether new jobs in your field will be available in California when you graduate.
http://ballotpedia.org/wiki/index.php/California_Sales_and_Income_Tax_Increase_Initiative_%282012%29
Vote NO on tax increases
Voters have absorbed the reality that California’s taxes are already sky-high. The top rate of its individual income tax is 10.3 percent, the second-highest in the country. A single middle-class worker earning just $48,000 pays a top rate of 9.3 percent, which is higher than the rate for millionaires in 47 other states. The Golden State is a Golden Turkey for business: Its regulatory and tax climate for business is the third-worst in the nation, according to the Tax Foundation. It’s no wonder that 4 million more people have fled the state since the early 1990s than have moved to California from other states. (Immigration is the only reason that the state’s population is stable or slightly growing.)
Money for the train but not schools….Moonbeam FAILS
BILLIONS of dollars available for the first leg of the Train to Nowhere (Merced to Bakersfield? WTF?) but they’re holding our schools hostage unless they get even more tax increases in a State that has one of the highest tax burdens in the Nation.
Jerry Brown said he’d take on Public Employee Pensions.
Jerry Brown said he’d listen to the voters.
Jerry Brown lied.
maybe what’s wrong here is that the marginal tax rate for $48,000 earners is ONLY 1% below that of millionaires?
Cut the rate, cut spending, elect fiscally responsible pols. Cali ranked 40 out of the fifty states for business climate. Pathetic. Thanks SACTO LIBS.
You are trying to say that the correct thing is to tax the wealthy even more. There is a reason that Warren Buffett doesn’t live in California. He might talk about higher taxes for the rich, but he doesn’t live that way. He lives in a low tax state, and he structures his compensation so that he gets every tax break. Continue to increase taxes for the wealthy, and they just use an alternative state as their primary residence. Then we lose all their taxes. Don’t kill the goose if you want gold eggs.
Gotta protect those public employee union pension plans, no matter what the cost.
I feel honored to work to age 75 so that teachers and policemen can retire at 50 with 100% of their salary for life.
The amount of money that people collect on in their pensions is vastly insignificant compared to the amount of money spent on wars, fossil fuel subsidization, corporate welfare, and its associated lost tax revenue–all of which could be going to fund public education to educate the country’s workforce. While conservatives claim that they are “fiscally balanced”, they merely nitpick at the small things and ignore the much, much, much larger problems (and hence ways to decrease costs and increase revenues). Now, I will justify my rant with facts:
In FY 2012, the State of California expects to pay $3.7 billion for employee pensions.
http://www.reuters.com/article/2012/05/17/us-economy-california-pension-payments-idUSBRE84G01J20120517
In FY 2012 the State of California will employ 223,990 persons, 197,032 of which are full-time employees. Translated to Republican: “jobz”. Their salaries will cost the state $18.3 billion. Thus, the pensions cost 20% of the actual salaries; money already essentially “paid” to the employee while they were working. Thus, public employees cost the state approximately $22 billion a year.
http://www.sco.ca.gov/ppsd_empinfo_demo.html
The total California State budget for 2012-23 is $95.9 billion. Thus, employee salaries AND pensions only amount to 23% of the budget…this includes the money for employing firemen, police officers, teachers, your professors, infrastructure maintenance, etc.
http://www.ebudget.ca.gov/pdf/Enacted/BudgetSummary/RevenueEstimates.pdf
Therefore, the employees of the state receive a mere 4% of the state’s budget in the form of pensions–money that will have to last them for possibly as much as 20+ years through old age and health issues. By contrast, even low estimates of the amount of federal money spent on defense/attack industries show that 28% of your federal taxes go to wars. Even if we slashed our defense budget to be a “mere” 2x that of the world’s second largest attack/defense spender, China, we would save approximately $477 billion a year, which split evenly between all 50 states (not an accurate approximation for California’s share here as it has one of the country’s largest state budgets), would increase California’s budget by AT LEAST 10%. That’s the equivalent of pumping a T.A.R.P. directly into the bottom layers of our economy every 1.5 years.
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States#Military_budget_and_total_US_federal_spending
But naturally, you can only cut spending so far. So how about increasing revenues? Increasing income tax on the richest 0.01% of Americans (people making over $23.8 million a year) by a piddling 10% would generate $71.4 billion more federally in revenues each year. And that’s raising taxes on 1 out of every TEN THOUSAND people!
http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
Basically, money doesn’t just “disappear”. It accumulates. So don’t complain that there “isn’t enough money to pay for ________”. There is, it’s just that you are ideologically opposed to spending it…even though that money could be invested for the public good.
Lol. Pension expenses accounted for 17% of the budget of CA cities and counties, and are growing at 11% per year. FY 2012 stats are nice, but it is telling that you did not discuss projections for budgets 10 or 20 years in the future.
http://www.latimes.com/news/opinion/commentary/la-oe-fritz-pension-reform-california-20120626,0,1584148.story
I can understand why you would want to change the subject and whine about unrelated subjects like “fossil fuels” and “wars” (how many has obama started, btw?) Any object analysis shows that the greedy public employees are well on their way to bankrupting this state.
“28% of your federal taxes go to wars”
In case you forgot, the Commander in Chief is your beloved Democrat Barack Obama and continuing the war is completely his choice, even though during the 2008 election cycle he bragged he was the only candidate to support an immediate end to the war and to Guantanamo.
“… the employees of the state receive a mere 4% of the state’s budget in
the form of pensions–money that will have to last them for possibly as
much as 20+ years”
Do you realize that most retirees live for much longer than 1 year? Assuming your numbers are correct, the 4% they receive this year only lasts for one year. Next year they get exactly the same amount. For as long as they live. That’s why it’s called a pension. And as the baby boomer generation starts retiring there will be tons more public employees retiring. As of 2011 California has a $500 BILLION unfunded liability for pensions and if CalPERS were more realistic about expected investment earnings that amount would be $884 billion today.
“In case you forgot, the Commander in Chief is your beloved Democrat
Barack Obama and continuing the war is completely his choice, even
though during the 2008 election cycle he bragged he was the only
candidate to support an immediate end to the war and to Guantanamo.”
Buddy, if you think that I’m a fan of Obama you are vastly mistaken. I am NOT a democrat, or even remotely a supporter of Obomber.
“Do you realize that most retirees live for much longer than 1 year?
Assuming your numbers are correct, the 4% they receive this year only
lasts for one year. Next year they get exactly the same amount. For as
long as they live. That’s why it’s called a pension.”
Do you realize that revenues stated are also annual? It’s not like the state has $90 billion to work with for the rest of eternity…
“As of 2011 California has a $500 BILLION unfunded liability for pensions
and if CalPERS were more realistic about expected investment earnings
that amount would be $884 billion today.”
Of course, because they are not allocating any reasonable amount of money towards pensions in their budgets! A pension liability doesn’t mean the state owes money NOW, it means that with current budgeting that’s how much it WILL owe in the (far) future.
” Any object analysis shows that the greedy public employees are well on their way to bankrupting this state.”
As I recall, they are not the ones demanding lower taxes, bailouts, and government control via high-payed lobbies. And think about Cal. Prop 13: $400 billion in lost revenue for the state. That could basically pay for the entire pension system’s liabilities. So YOU are not greedy for wanting lower property taxes, but the state workers ARE because they want essentially the same net income increase that you did??? Thinking that a postal worker is “greedy” because they deliver mail all day and want to be payed $30,000 instead of $20,000 is just preposterous either way. Most of these people (like teachers) have incredibly important jobs and get paid shit for it. Like I said, you have to look at where the BIG money is going. We spend about $2 billion A DAY funding attack/defense.
“and are growing at 11% per year”
And what is the actual pensioner’s payroll count growing at? Also, subtract 3% for inflation and probably some for COLAs because Cali is flippin’ expensive.
Apples and oranges. Prop 13 benefits ALL Californians, even union members. I suppose you would like to go back to the days when elderly retired people were being forced to sell homes they had owned for 40 years because of high property taxes?
There were very good reasons why Prop 13 passed with massive support, and your little leftwing revisionist history fantasy will never obscure the TRUTH.
It’s not popular but I’ll admit it: yes, I’d like to throw the old people out on the street… and why not? It’s their policies that have gotten us where we are. But we both know that will never happen since those over 50 tend to have far more wealth and power than those under 30 so it’s much easier to kick the can down the road.
The 400 billion is not LOST. It resides in our pockets to be spent as we see fit not turned over to inept, irresponsible pols who waste and squander our treasure. Vot every effing Lib out of office and restore fiscal sanity.
Moonbeam is a fraud.
The lost revenue from prop 13 was replaced by other taxes. California still is in the top 10 for most state taxes, but we are in the bottom 10 for education. Now I am not blaming the pensions as the main problem, but I am blaming the legislatures over the last several decades for spending money on things other than education that I believe are not as important as education.
Guest, how much money is the state of California spending on wars, fossil fuel subsidization, and corporate welfare? If you are worried about money for education, then you need to focus on the state’s expenses.
I agree, well said!
Where is my President when I need him, do something O’Bama!