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January 18, 1999

Budget proposal contains mixed news for UC

By Brad Hayward
UC Office of the President

The 1999-2000 state budget proposal unveiled recently by Gov. Gray Davis contains mixed news for the University of California, UC President Richard C. Atkinson told the Board of Regents last week.

The budget proposal indicates the governor's willingness to negotiate a new higher education "compact"--a multi-year agreement providing UC and the California State University with funding stability in exchange for a commitment to specific accountability measures. The governor's budget plan also funds enrollment growth of 4,600 students in 1999-2000, an increase of 3 percent; keeps systemwide resident student fees level; and funds new initiatives for professional development in the public schools.

However, the budget proposal reduces UC's 1999-2000 request for permanent state General Fund support by approximately $50 million and also discontinues one-time funding available in 1998-99 for core UC needs such as instructional technology, equipment, library materials, and deferred maintenance.

Atkinson noted that the governor's budget was shaped in the context of slower economic growth in California and projections of a $1 billion state budget deficit under current state spending policies. As a result, the budget offers limited spending growth to all state programs.

"The university looks forward to working with the governor and his staff on both a new compact and a modified 1999-2000 budget plan," Atkinson said. "I am hopeful that negotiations on the compact, coupled with revised state revenue projections this spring, will produce a final budget that allows UC to fulfill its commitments to the state."

Mandatory systemwide student fees for California residents would remain level under the governor's budget proposal, marking the fifth consecutive year in which these fees have not been raised. The plan does call for a 10 percent ($940) increase in nonresident tuition. The Regents will consider nonresident tuition levels at a future meeting.

Two special initiatives for UC are included in the budget. One is a $13 million initiative to help improve public school performance, focusing on the development of three programs: Reading Professional Development Institutes to provide summer instruction in the teaching of reading for up to 6,000 K-3 teachers; Teacher Scholars, a 15-month program for prospective teachers leading to a teaching credential and master's degree from UC; and the Governor's Principal Leadership Institute, a two-year curriculum to train school principals.

"The governor's education initiatives provide UC and CSU with the opportunity to work collaboratively on an issue of critical importance to the state's future," Atkinson said. "It will take the resources and expertise of both institutions to meet the educational challenges outlined by Governor Davis."

The second special initiative would provide a $2.5 million augmentation to support alcohol and substance abuse research.

The $2.57 billion budget proposal for UC also continues $9.9 million provided in 1998-99 to support planning and development of UC Merced.

However, the governor's budget reduces by $50 million UC's requested 1999-2000 base budget increase of state General Fund support--funding that the university requested to cover cost increases for current programs, salary increases, and other core needs. Additionally, the proposal discontinues more than $70 million in one-time funding provided in 1998-99 for deferred maintenance, instructional technology, equipment, and libraries.

Overall, the plan increases UC's total state General Fund budget for 1999-2000, including both permanent and one-time funding, by $46 million, or 1.8 percent, over the 1998-99 level. Permanent state General Fund support for the university, a measure that does not reflect the proposed reduction in one-time funds, increases by $118.5 million, or 5 percent.

Larry Hershman, UC vice president for budget, said the increase is not sufficient to cover 3 percent enrollment growth, keep student fees level, and fund growth in the university's basic program needs.

"The $50 million reduction from the Regents' workload budget and the loss of one-time funding for core needs would hurt the university a great deal," Hershman said. "Before we propose a plan to cope with these reductions, though, we will work with the governor to see if we can reach agreement on a more satisfactory funding level in the context of a new compact."

The governor's budget fully supports the Regents' $210 million budget for capital improvements, which will be funded by general obligation bonds authorized by voter approval of Proposition 1A last November.

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