September 16, 2009
UC Regents hear fiscal outlook
More difficult sacrifices, including possible fee increases, may be needed to fight the university’s budget crisis, UC Regents were told Wednesday in a briefing from the university’s finance team.
UC faces a $535 million state funding shortfall in 2009-10, and that could grow to more than $600 million in 2010-11 without new revenue, said Patrick Lenz, UC vice president for budget. As part of the strategy to offset the severe cuts the university is facing, UC administration asked the Regents to consider both a mid-year and 2010-11 student fee increases.
“The state has stopped building freeways to higher education,” UC President Mark Yudof said. “They are now building toll roads.”
If Regents approve the fee increases, the resident undergraduate fee would increase mid-year by $585 and between $579 and $654 for resident graduate students. For a full academic year, the fee increase for resident undergraduate students would be $1,170, and the increase for resident graduate students would range from $1,158 to $1,308. In 2010-11 the fees would increase by $1,344 for resident undergraduates, and between $1,332 and $1,506 for resident graduate students. Also proposed are differential fees for UC engineering and business school students in recognition of the higher cost of maintaining those programs.
UC will continue to set aside 33 percent of the fee increase revenue for financial aid. The Blue and Gold Opportunity Plan covers the full mandatory fees for students whose family income is $60,000 or below. One of the proposed recommendations is to raise the income ceiling to $70,000.
Despite limiting freshman enrollment by 2,300 this fall, UC still has approximately 14,000 students for which it receives no state funding, said Lenz. He recommended curtailing enrollment by another 2,300 in 2010-11.
The Regents will consider the budget and proposed fee increases at their November meeting, and the proposals could change. No one wants to increase fees, several Regents said, but given the projected state budget deficits of $7 billion to $8 billion, chances of having increased state support for higher education seem slim.
UC has been taking drastic steps to cope with its growing budget shortfalls. When state cuts to UC funding are added to the university’s unfunded mandatory costs — including unfunded enrollment, retiree benefits and other operating costs, the funding gap totals more than $1 billion. That is expected to grow to more than $1.2 billion in 2010-11.
“This budget is balanced on the backs of a lot of people –faculty, administrators and students,” Yudof told the Regents. “Next year will not be better. The year after that may or may not be.”
The campuses have been eliminating jobs, laying off employees and deferring faculty hiring. A systemwide furlough plan started Sept. 1 that reduced employee pay from 4 percent to 10 percent.
“Our board and administration have been forced to make tough decisions,” said student Regent Jesse Bernal. “No one wants to have furloughs, and no one wants to increase fees. It’s the state not the Regents who are increasing the burden on students.”
Bernal told the Regents he and other students do understand why fee increases are needed but that a mid-year fee increase would be unfair to students.
Regent Eddie Island, who historically votes against fee increases, said he would reluctantly support them, given the magnitude of UC’s budget challenges.
“Some will say I’ve gone over to the dark side,” Island said. “No. I’ve gone to the side of necessity. I will vote for a fee increase and I’ll be very sad to do so.”
Regent George Marcus said he objected to fee increases for graduate students since UC’s research programs depend on them. Regents also questioned charging differential fees for engineering and business students and asked for more information from staff on that proposal for the November meeting.
About 100 UC staff held up the meeting for about 20 minutes when they unfurled banners and began loudly chanting in protest of the furlough program. Police arrested 14 who refused to leave the meeting room when asked. They were given citations and released.
- Category: Latest numbers, Student fees, UC's options
