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Monday, December 6, 2021

Regents continue to grapple with dreary budget situation

At a meeting in UC Riverside earlier this month, the University of California Board of Regents examined several unappealing yet likely unavoidable cost-cutting measures including employee furloughs, salary reductions and student fee increases.

“It’s important to acknowledge, first, that the budget adopted by the state could have been worse for higher education,said UC President Mark Yudof at the meeting.However, we have a serious problem.

California legislators adopted the state’s $143 billion budget in February after months of grueling debate over how to close the $41 billion shortfall arising this year and next. The final agreement to close the gap through tax increases, cuts in services and widespread borrowing continues the erosion of state support for the UC to the tune of $115 million in new permanent cuts.

When coupled with unfunded cost increases in enrollment, health benefits, utilities and inflation, the UC’s budget shortfall will reach approximately $450 million over two years.

The budget passed by the legislature assumes a 9.3 percent increase in mandatory systemwide student fees. The regents will decide in May whether or not to comply with the state’s recommendation, which would raise undergraduate fees by almost $700 from $7,126 to $7,788 per year.

While the Board of Regents has the final say over student fees, a recent report by the state’s Legislative Analyst’s Office updated the budget shortfall to be $8 billion worse than expectedeffectively eliminating the possibility of a last-minute increase in state support to the UC.

“It is clear that over the last 40 years, when you see the amount of support from the state per student and how much it’s declined, it has by and large been picked up by student fees,said UC Regent Richard Blum.When we talk about raising student fees it isn’t something that we take lightly.

Regent and Lieutenant Governor John Garamendi vehemently opposed raising student fees and instead advocated for his plan to raise the money from a statewide tax on the production of oil.

“The legislature decided to not increase other fees by some amount or another, but decided to instead impose on students what could arguably be called a $700 tax on every student,said Garamendi, who is planning a run for governor in 2010.That is a particularly stupid tax policy.

Yudof told the regents he is considering implementing furlough measuresmandatory unpaid days offas well as salary reductions.

“While I have not decided to implement any such measures at this moment, they may become necessary, and I believe we need to have a policy and planning framework in place,Yudof said.At the same time, I also am concerned about maintaining our ability to attract and retain the caliber of people we need to continue to serve the growing needs to the state.

The Office of the President has taken numerous belt-tightening measures since it began restructuring in 2007-2008 including cutting $6 million in travel and entertainment expenses. To date, the UCOP has made $67 million in cuts to its budget amounting approximately 19 percent.

Yudof stressed that despite the possible fee increases, the UC will continue to offer as much financial aid to as many students as possible. The UC currently provides grant and scholarship assistance to 54 percent of undergraduates averaging to $10,300, according to a UCOP press release. Students will also benefit from the federal economy recovery package, which raises the maximum value of Pell Grants by $619 as well as providing $88 million in higher education tax credit to middle income families.

“Whatever the outcome, we will continue to administer a strong financial aid program that mitigates the effect of fee increases,Yudof said.

 

ALYSOUN BONDE can be reached at campus@theaggie.org.

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