Note: The final California state budget for fiscal year 2009-2010 included an additional $255 million one-time reduction (above the $450 million level noted below in the press release) that the state expected to backfill with federal stimulus funds. In late April, California received its initial share of the federal stimulus’ state stabilization funds, which provided $268 million for UC. These funds offset the $255 million in additional cuts for UC that were included in the final state budget and provided UC an additional $13 million, making the budget shortfall for UC approximately $437 million. (May 4, 2009)

The University of California Board of Regents today (March 19) endorsed Proposition 1A, the May statewide ballot measure that would establish a "rainy day" reserve fund, regulate the level of spending each year and increase the amount of funding held in reserve to help guard against the dramatic ups and downs that have characterized state spending in recent years.

"By helping the state to achieve a more stable financial picture, Proposition 1A enhances the ability of the University of California to secure more adequate state support to fund its core mission in future years," said Richard C. Blum, the Regents' chairman. "Not only will Prop 1A help avoid further deep budget cuts to higher education and state agencies that are subject to discretionary funding actions of the Legislature and the governor, but it also helps smooth out how state funds are spent in future years to avoid the boom and bust cycles California has experienced in the last decade-and-a-half."

The budget stabilization measure was passed by the Legislature and the governor as part of the special session budget package, intended to address an estimated $41.6 billion shortfall for both the remainder of 2008-09 and the 2009-10 fiscal year.

If approved by California voters on the May 19 ballot, Prop 1A could result in approximately $16 billion in additional revenue to the state's general fund between 2010-11 and 2012-13. If it is not approved, the general fund may once again be in significant deficit, which likely would necessitate further cuts to state-funded programs.

"Although this initiative is critical to achieving more financial balance at the state level, UC still intends to support efforts in the future to reform the state's overall structural situation that disadvantages programs funded from state General Funds without constitutional protection," Blum said.

The state budget approved in February for the rest of 2008-09 and the 2009-10 fiscal year contained $115 million in new permanent funding reductions for UC and, by virtue of other growing costs not addressed in the budget, extends the university's total immediate state budget challenge to $450 million. The total $450 million shortfall for UC consists of the $115 million in new cuts, $122 million in underfunded enrollments and $213 million in unfunded mandatory costs over the two-year period for utilities, employee health benefits and other inflationary costs.

More information about Prop 1A, including text of the initiative as well as ballot arguments for and against the measure, is available on the Secretary of State's Web site: www.sos.ca.gov/elections/statewide-special-election-051909/vig-info-051909/vig-051909.htm

In recent years, the UC Regents have endorsed other state propositions with funding implications for the university, including bond measures for K-12 and higher education facilities (Prop 47 in November 2002, Prop 55 in March 2004 and Prop 1D in November 2006) as well as funding for UC and private children's hospitals across the state (Prop 3 in November 2008). All four ballot measures were approved by California voters.

Beyond the Regents' endorsements, the University of California does not support or oppose ballot measures. However, it does seek to objectively evaluate a ballot measure's impact on UC and higher education. For legal guidelines for UC participation in ballot campaigns: www.ucop.edu/state/advocacy/ballotguidelines.html

For more information about Proposition 1A and the May 2009 election: www.universityofcalifornia.edu/news/prop1a

For more news and information about the University of California: www.universityofcalifornia.edu