Budget approved by UC Regents Wednesday unrealistic, governor says

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At its meeting Wednesday, the UC Board of Regents approved the UC’s 2013-2014 budget —  despite objections from Gov. Jerry Brown and Lt. Gov. Gavin Newsom that the plan is unrealistic.

The plan calls for state funding to the University of California to increase by more than $267 million next year — something Newsom said is very unlikely to happen.

“What we’ve basically passed today is a minimum 6 percent tuition increase,” said Newsom. “The budget is unrealistic. I’m concerned that the default to this plan is going to be to raise tuition to levels worse than what we were afraid of if Proposition 30 didn’t pass.”

Last week, California voters passed Prop. 30, which is projected to save the university $250 million this year in trigger cuts built into the state budget that would have gone into effect had it failed. Newsom emphasized that it is a myth that the proposition created new money for the UC system.

Newsom said that even if the state Legislature were able to approve the UC’s request,  the CSU and community college systems would certainly expect similar treatment. Brown seconded Newsom’s concerns, citing the need for alternative solutions for the UC’s revenue problems.

“When you look at this budget, the state would have to increase its funding by 12 percent to the university, and that’s just not likely to happen,” Brown said. “This is a group of bright people around here, and we can figure this out … but you’ve got to change the paradigm. We need reasonable, creative change.”

If state funding is not increased or creative solutions are not found, then tuition increases are inevitable, said Newsom, who expressed frustration over the lack of new ideas at the meeting.

“It’s Groundhog Day for me,” Newson said. “I’d love to be wrong. But it is likely that there will be a request to the UC Board of Regents for a minimum 6 percent tuition increase in the next months … and likely soon again after that.”

UC President Mark Yudof said he recognized that the approved budget is not a finished product but said the plan is not something to which the regents are held.

“I would just like to stress that we are in no way locked in to this plan,” Yudof said. “This is what we would like to do, but there are a lot of contingencies and issues to be worked out here.”

One major revenue-generating aspect of the budget is a debt restructuring that could bring in up to $80 million per year for the next few years.

UC Chief Financial Officer Peter Taylor said that because the UC system has better bond ratings than the state, the university will try to refinance them.

“Think of it as a refinance on a car loan,” said Taylor. “For example, imagine we were paying 5 percent and were able to drop that to 3 percent — the $80 million we are talking about would come from that drop.”

Contact D.J. Sellarole at [email protected]

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  • earlrichards

    A private watchdog organization is needed to oversee the disbursement of Prop 30 funds to ensure that all of the funds are spent on education, and does not go to Wall Street, does not go into the pockets of the Regents and does not go to the general fund, and from there to who knows where. The Governor of California cannot be trusted with Prop 30 funds, because Brown’s sister works for Goldman Sachs and Brown is on the Board of Regents for the University of California. Morgan Stanley and Goldman Sachs appear to be the major “vampire quids” in the swaps scam.

    • Rebeccainca

      This board has failed the people of CA, the UC System, and its students

      Brown is an ex-officio He and Lt Governor have no controlling interest to the Regents

      The University of California
      is governed by The Regents, a 26-member
      board, as established under Article IX,
      Section 9 of the California Constitution.

      The University is governed by The Regents, which under Article IX, Section 9 of the California Constitution has “full powers of organization and governance” subject only to very specific areas
      of legislative control. The article states that “the university shall be entirely independent of all political
      and sectarian influence and kept free therefrom in the appointment of its Regents and in the administration of its affairs.”

      Board Membership

      Article IX, Section 9 was drafted in 1878 after a decade of political conflict demonstrated the importance of sheltering the university from shifting political winds.

      The board consists of 26 members:
      18 regents are appointed
      by the governor for 12-year terms
      One is a student
      appointed by the Regents to a one-year term
      Seven are ex officio members —
      the Governor, Lieutenant Governor, Speaker of the
      Assembly, Superintendent of Public Instruction, president
      and vice president of the Alumni Associations of UC
      and the UC president.

      In addition, two faculty members
      — the chair and vice chair of the Academic Council —
      sit on the board as non-voting members.

      Here is a list of the current governing board members
      Majority were appointed by Arnie

      http://regents.universityofcalifornia.edu/regbios/welcome.html

      • earlrichards

        Brown would have an interest through his sister, although it would not be a controlling interest.

        • Rebeccainca

          The amount of risk these UC Regents took on should be illegal!
          I’d love to see a private watchdog group one specifically overseeing this Regents Board.

  • Calipenguin

    The UC Regents are using the same tactics as the California legislature. Pass an unrealistic budget now, pay for shiny new buildings with the assumption that the state will increase funding, act surprised later when the state does not provide the funds, and then tell the students to either pay more tuition or face locked classrooms. Student activists get all upset, demand new taxes from the rich, and then whine when they can’t find jobs after graduation because the rich are not creating new jobs in California any more.

  • HeSaid1

    Bob Meister, UCSC Politics Professor has this to say about the collusion between the State, UC Regents, and using ever-increasing tuition to fund their own agenda–NOT education:

    http://www.counterpunch.org/2012/10/26/american-students-the-coal-miners-of-today/

    And how Prop 30 funds will now go to Wall Street:

    http://www.sfgate.com/opinion/openforum/article/Prop-30-funds-for-UC-will-go-to-Wall-Street-4031472.php