The UC Regents approved a 2008-09 budget proposal at their November meeting that includes new funding for student enrollment growth of 2.5 percent; new research and public service initiatives, most critically to help address issues in K-12 education; new money for student mental health; and a 5 percent pool for salary increases for faculty and staff.

Under the proposal, UC's state-funded budget for the fiscal year beginning July 1, 2008, would total $3.46 billion. The request (including UC general funds and student fee revenue) is 7.2 percent above the 2007-08 level.

What happens to the plan - and what action Regents will take on student fees - will become clearer after Gov. Arnold Schwarzenegger submits his proposed state budget in January. In November, the governor requested that all state departments draft plans for 10 percent budget cuts, as California faces a projected $10 billion deficit.

"The state is facing significant fiscal constraints, which may limit its ability to meet all of the university's current budgetary needs," UC Executive Vice President Katherine Lapp told Regents in November. "Therefore, UC has a responsibility to fund other critical needs and investments through cost-saving reforms identified as part of an ambitious and sweeping multiyear restructuring initiative."

The budget anticipates redirecting $28.1 million of initial savings from university efficiencies to other needs.

Budget highlights include proposed funding for an enrollment increase of 5,408 full-time-equivalent students and $5 million to launch the K-12 Educational Imperative initiative.

"This budget is a roadmap for turning vision into action," said UC President Robert C. Dynes.

While state funding and student fees pay for the core educational program at UC, the University's total budget from all sources for all activities, excluding the UC-managed national laboratories, is roughly $18 billion.