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The following news release was issued at today's (Thursday, Jan. 16) meeting of the UC Board of Regents detailing remarks by President Atkinson and Budget Director Larry Hershman about Gov. Wilson's 1997-98 budget and discussions to develop a long-term fee policy.

Mike Lassiter
Director, UCOP News & Communications


Thursday, January 16, 1997
News Office (510) 987-9200


University of California President Richard C. Atkinson said today (Thursday, Jan. 16) the time is right to adopt a long-term student fee policy that would allow students and parents to better plan for the cost of a UC education.

Atkinson said, "The key to making this work is to tie fee increases to some reasonable index of 'ability to pay' but also to provide some stability for the university's budget, covering both cost increases and growth."

Atkinson told the UC Board of Regents at a meeting in San Francisco that "a long-term fee policy will provide students and their families with more gradual and predictable fee increases."

During the past several decades, student fees have increased dramatically during difficult economic times and remained stable during good economic times when the state provided sufficient revenue to offset proposed increases.

Atkinson's remarks came during a report to Regents on the governor's announcement earlier this month that he will provide the university funds to meet its budget needs for 1997-98, including funds to offset the need for a general fee increase for the third consecutive year.

"I am grateful to the governor and appreciate his continued support for the university," Atkinson said. "The promise of an affordable, accessible and high quality university education, which was made to past generations of Californians, is being kept and renewed. The budget assures that for the near term UC can maintain the excellence of its programs, continue to offer a place at a UC campus to all eligible Californians seeking undergraduate admission and provide the classes that students need to graduate in a timely fashion."

Larry Hershman, UC's budget director, told the board that the university will work closely with Regents, the governor, the Legislature and California State University to develop a new policy. "It is an opportune time to adopt a new long-term policy," he said, "because fees are at modest levels compared to comparable public institutions."

Previous attempts at a long-term fee policy have failed, Hershman said, because they have not taken into consideration the total resources needed to maintain the quality of the institution and accommodate enrollment growth.

Hershman said the university's initial thinking is that student fees might best be tied to "growth in per-capita personal income, which is essentially people's ability to pay. By linking the two, student fees would be stabilized at current levels with respect to purchasing power or ability to pay."

Student fees would continue to fund the same share of the university budget as they do now, Hershman said. UC fees would continue to be less than fees at comparison institutions and the university would continue to increase financial aid to help offset the impact of fee increases.

At the same time, Hershman said, the state would continue to fund the same share of the university's budget as it does now by tying state funding increases to the growth in per-capita personal income and enrollment growth. Under this proposal, he said, the university's share of the state general fund budget would remain at its current level of 4.4 percent.

Using current economic projections for the state provided by the UCLA Business Forecast, Hershman said, student fee increases would average 4.5 percent a year and state funding could expect to increase by about 6 percent.

"While we (UC) would not recover the fiscal ground lost during the early 1990s (when UC lost 20 percent of its state funding), this approach would provide the university with fiscal stability," Hershman said. "We would be able to enroll all eligible California undergraduates, provide competitive faculty salaries, keep staff salaries current with inflation and maintain the excellence of our programs."

The governor's decision to "buy out" any general fee increases eliminated the need for the Regents to consider raising fees for California undergraduates next year. However, in accordance with the governor's budget and the Regents budget proposal, the board's finance committee recommended increases in out-of-state tuition and fee increases for selected professional programs. The full board is expected to adopt the increases at its Friday meeting.

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