Brown’s May Revise to impact decisions at Wednesday’s Regents meeting

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At its meeting Wednesday, the UC Board of Regents will debate another system-wide tuition hike, beginning a longer discussion about reconciling reduced state support over the next year.

While the university escaped significantly deeper cuts under Gov. Jerry Brown’s recently published revised budget proposal — informally called the May Revise — the fate of state funding for higher education remains uncertain.

“(Brown’s) proposal is part of a long process, so at this point it would be premature to predict what the impact of the final 2012-13 state budget will be on the University of California,” said UC spokesperson Steve Montiel in a statement.

A report on an agenda item for the upcoming meeting indicates that UC administrators see themselves in increasingly dire straits without many fiscal remedies at their disposal.

“I wish Tinker Bell could come and sprinkle her magic, but it doesn’t look like she’s going to,” said UC spokesperson Dianne Klein.

While the university has made efforts to increase philanthropy and improve efficiency, the report suggests savings from those endeavors may be exhausted for the short term.

“Even with the efficiency savings and alternative revenues anticipated in the expenditure plan, the university will still face a funding gap of more than $1 billion for 2012-13,” the report states.

The report postures future tuition hikes as a function of reductions in state funding rather than board decisions, reflecting the developing stance that the university is a passive victim to state disinvestment.

“I would say that this agenda item is written as much for Sacramento as it is for the Regents,” said Student Regent-designate Jonathan Stein. “I think it is directed at that audience — the policy people who have control over the UC’s future.”

The report frames the upcoming July decision on tuition as a question of whether the state is willing to “buy-out” tuition and fee hikes.

If the state does not increase funding for the UC by $125 million, “a six percent increase in mandatory systemwide charges would be needed,” the report stated.

Changes to the Cal Grant program may make the tuition hikes even more unpalatable. Brown’s May Revise “decouples” Cal Grant awards from system-wide tuition and fees for students attending the UC and California State University, significantly cutting Cal Grant student aid.

If Brown’s tax initiative on the November ballot fails, the report foretells the potential for drastic “double digit” percentage midyear tuition and fee hikes to offset mid year trigger cuts of $250 million for the UC.

The report may also set up a troublesome sliding scale between tuition and state revenue to fund the university.

In its report entitled “U.S. Higher Education Outlook Mixed in 2012” published earlier this year, Moody’s Investor Services cautioned against higher education institutions that rely too heavily on tuition in light of reduced state funding.

“Tuition levels are at a tipping point,” the report stated.

But, in the near future, the UC will have to depend on state dollars. The discussion at the board meeting of solutions like double digit tuition hikes or further employee layoffs could stimulate some change from Sacramento.

“From a theatrics perspective (the Regents discussion) is timed perfectly with the May Revise,” said Student Regent Alfredo Mireles Jr. “For a couple of days we will have a lot of the oxygen in Sacramento, and we hope that will translate to a change in funding.”

Javier Panzar contributed to this report.