KEY POINTS ABOUT THE COMPACT BETWEEN
GOVERNOR SCHWARZENEGGER, UC, AND CSU

fact sheet pdf

• Gov. Arnold Schwarzenegger, UC President Robert Dynes, and CSU Chancellor Charles Reed have reached agreement on a “compact” outlining their intentions for state funding levels and institutional accountability in the University of California and California State University systems over the next several years.
  
  
• The agreement provides for annual growth in state funding for UC’s basic budget and enrollment growth, beginning in 2005-06, in exchange for UC’s commitment to accountability in specified areas. The agreement extends through the 2010-11 fiscal year.
  
  
• The compact is important because it carries the promise of renewed fiscal stability for the UC system. After several years of major budget cuts – reflecting a net 16% decline in state support over a four-year period – UC under the compact will receive funding to preserve its internationally acclaimed academic programs, to provide broad accessibility for promising California students, and to sustain its deep impact on the economy, health, and quality of life of California.
  
  
• Among the compact’s features: There will be funding starting in 2005-06 to resume the growth of faculty and staff salaries, which is key to maintaining institutional quality. Student fees will be expected to rise on an annual basis to help pay for the institution’s costs, but for the first time in recent memory, fee increases will be predictable so that students and their families can plan ahead. And funds will be provided for enrollment growth at UC, preserving a place for students who challenge themselves, excel, and meet the system’s eligibility requirements.
  
  
• The funding components of the compact are a floor, not a ceiling. The compact reflects the minimum level of state resources necessary to preserve quality and access at the University. Additional funds can be made available when the state’s resources allow.
  
  
• All state budgets are a product of negotiation between the governor and Legislature. This compact is with the governor and will need the Legislature’s annual support. However, members of the Legislature have played a major role this year in placing public higher education at or near the top of the budget agenda in Sacramento and had much to do with creating the environment that made this compact possible.
  
  
• Under the agreement with the governor, UC still will sustain significant budget cuts in the 2004-05 fiscal year as the state grapples with a large budget gap. However, the governor will not propose in his May Revision cuts for UC any larger than those in his January budget. The compact’s promise of recovery starting in 2005-06, and growing over the following years, is very much in the University’s long-term interest.
  
  
• Major funding elements of the compact for UC include:
  
  
  
  • Annual funding growth of 3% for salary and other cost increases, growing to 4% annual growth in 2007-08.
    
    
  • Funding for an additional 5,000 students each year starting in 2005-06 – which, after the enrollment cuts in 2004-05, will put the University back on its original plan for accommodating enrollment growth over the course of this decade.
    
    
  • A further 1% annual augmentation for core needs, such as instructional equipment, instructional technology, building maintenance, and library materials, beginning in the 2008-09 fiscal year.
    
    
  • Undergraduate fee increases averaging 10% the next three years (14% in 2004-05; 8% in 2005-06 and 2006-07). Longer-term, fees would go up no more than 10% per year, with UC keeping the revenue to address institutional needs rather than backfilling state budget cuts. (Under the compact, fee increases would be indexed to per-capita personal income growth, but the Board of Regents could increase fees by up to 10% a year in compelling fiscal circumstances.)
    
    
  • A graduate fee increase of 20% in 2004-05, rather than the 40% originally proposed. Fees would increase another 10% in both 2005-06 and 2006-07, and UC will develop a plan for graduate fee levels over the longer term. A plan also will be developed for professional school fees.
    
    
  • UC will reserve between 20% and 33% of new fee revenue for financial aid in order to preserve accessibility for students of all financial backgrounds.
    
    
  • Continued state support for the development of UC Merced.
    
    
  • Agreement by UC to use non-state resources to provide $12 million in support for K-12 academic preparation (outreach) programs, with additional state support to be determined through the annual budget process.
    
    
  • The Schwarzenegger Adminstration’s support for future education bond measures providing UC with facilities funding comparable to that of Proposition 55.
    
    
• Major accountability elements of the compact for UC include:
  
  
  
  • Meet the enrollment objectives of the Master Plan for Higher Education, assuming adequate state resources are provided.
    
    
  • Report to the state annually on a variety of student and institutional outcomes, focusing on demonstration of student success and efficient use of resources.
    
    
  • Preserve faculty workload policies comparable to those of other universities, and continue to make the highest priority ensuring that students have access to the classes they need to graduate in a timely manner.
    
    
  • Expand efforts to improve the supply and quality of math and science teachers in California’s public schools to further bolster the state’s economic recovery.
    
    
  • Strengthen programs encouraging students to participate in community service.
    

More information is at:
www.universityofcalifornia.edu/news/compact/welcome.html.

May 11, 2004