UC spared additional cuts in budget revision

While the University of California escaped further funding reductions Monday morning in Gov. Jerry Brown’s revised state budget, should spending cuts and tax extensions the new proposal relies upon fail to be carried out, additional cuts to the UC and CSU are likely, doubling a $500 million dollar cut to $1 billion for each university system.

At a press conference Monday, Brown presented his revised budget plan, which relies on a combination of tax extensions, unanticipated state revenues and spending cuts to bridge California’s estimated $9.6 billion budget deficit. However, without tax extensions, the cuts to the UC would double to $1 billion — possibly resulting in a mid-year tuition increase next January, program closures throughout the UC and employee layoffs, according to UC President Mark Yudof’s May 6 testimony before the state senate budget committee.

According to the revised budget summary, an all-cuts budget would require an additional cut of $500 million from each university system, which would in turn create “necessary” fee increases exceeding 30 percent for each system.

“Reductions of this magnitude would significantly impair the universities’ critical role in training the state’s workforce and
encouraging innovation,” the summary reads.

In a statement following the release of the revised budget, Yudof said a $1 billion cut to the UC would be “unconscionable … to the university, its students and families, and to the state that it has served for nearly a century and a half” and would present a “dire challenge to the university and a retreat by the state from its historic support of higher public education in California.”

According to the statement, if the cut is doubled, the state’s contribution to the UC’s core funds — money used to “pay professors and staff members, light the libraries, maintain the campuses, and all the rest” — would be reduced to roughly $2 billion, a level not seen since the 1990’s. This in turn would likely result in a “need to yet again raise tuition.”

In April, Brown predicted tuition could rise to $20,000 or $25,000 per year under an all-cuts budget plan. At the beginning of May, Yudof said in his testimony to the state senate budget committee that Brown’s prediction was “not far off.”

“In the end, it is California that would stand at risk,” Yudof said in the statement. “Now is not the time to abandon what has been the key catalyst for making California such an exceptional place — a commitment to providing, as a common good, an affordable, world-class higher education for all who earn a spot at our public universities and colleges.”

While Brown’s revised budget did not cut further from higher education, it utilized a combination of cuts to other state expenditures, tax extensions and unanticipated revenue to bridge the budget gap. While he acknowledged that the state will receive $6.6 billion more in revenue in the next 13 months than had been anticipated, Brown called for tax extensions to avoid large budget deficits in years to come.

“We still have a $10 million structural deficit and a wall of debt for years to come,” he said. “This is not the time to delay or evade. This is the time to put our finances in order, and that’s precisely what this May Revision intends to do.”

The revised budget would eliminate 43 state boards and commissions and 5,500 jobs, while at the same time increase funding for public schools by $3 billion. In light of the increased revenues, the revision proposes tax extensions that have been reduced by $2.9 billion and eliminates new income taxes.

Brown’s initial January budget proposed $14 billion in tax extensions and a $12.5 billion cut in state expenditures. He was unable to get the two-thirds majority vote required to place the extensions on a June ballot, and only $11.2 billion in cuts were signed into law in March.

With state revenues higher than anticipated, the budget deficit has been projected to be $9.6 billion — $4.8 billion from carry-in from the 2010-2011 fiscal year and an operating shortfall of $4.8 billion for 2011-2012. The revised budget calls for $10.8 billion in solutions to bridge that deficit and create a $1.2 billion reserve.

The state’s lawmakers have until June 15 to approve a budget.

Aaida Samad is the lead higher education reporter.