Budget Future Up In The Air

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Marlin Agoub | New University

Speakers at the budget forum last Thursday outline the different possibilities for the budget, pending Prop 30.

Chancellor Michael V. Drake hosted an open budget forum last Thursday to present an update on the budget and answer any questions about the budget plan and the impact of Proposition 30.

Meredith Michaels, Vice Chancellor for Planning and Budget, presented data regarding the evolution of the university budget and its status now. Kate Klimow, Assistant Vice Chancellor for Community and Government Relations, covered the different aspects of Proposition 30 and its impact on the university should it pass.

The Chancellor also pointed to the upward trajectory of UC Irvine in the last few years, especially as state support for public education has decreased during that time.

The factors that contributed to the university’s growth, according to Drake, begins with the people involved since the university opened 47 years ago, including the founders, faculty, students and the state.

“We had a great partner and investor in the state of California,” he said. “We had the facilities and resources to be able to grow and move forward. These have been critical to the growth of the University of California, and secondarily, to the growth of California itself in the last half-century.”

This model of state support, he said, began to change as the state gradually began to cut its support for higher education in response to the economic crisis.

“Our real challenge since 2008 has been our continued path upward,” he said. “The basis upon which we’ve been built has been weakening and it has required a tremendous effort on the part of everyone.”

Michaels said that while the UC system has been feeling the impact of the budget cuts since 2008, the first signs of a possible crisis began to appear in the late 1990s.

“We saw the seeds of these occurring 10 years before when the dot-com industry was booming and lots of money was going into the state coffers,” she said. “The problem was, of course, at some point, dot-com went bust, the state coffers went down, but the state continued to spend the dollars on permanent programs.”

State legislators in response made short-term decisions that did not directly deal with the issue completely, and the problem was only exacerbated with the economic crisis in 2008.

Michaels pointed out that the university does not just rely on state support and that its revenue has almost doubled over the last 10 years. In terms of the revenue sources, however, there is a definite change.

The funds that support core academic programs — what Michaels referred to as “core fund” — include tuition and fees (regular tuition that resident students pay; the non-resident tuition that international and out-of-state students pay; and professional school fees) and state support.

With the deterioration of state support, however, Michaels said the university has been forced to increase its methods of making up budget gaps through self-supporting programs that pay for themselves and extra revenue, including the tuition from out-of-state students.

“We didn’t get here overnight, and we’re not going to resolve the overall problem overnight, either,” Michaels said. “We’re not giving up on the state to remind them of the huge value that not only does higher education provide to our populace, but also the economic role each campus plays in the state.”

Kate Klimow outlined the basic aspects of Proposition 30, which include an increase in the state’s sales tax for four years and an increase in personal income tax rates on incomes above $250,000 for seven years. The revenue will go to K-12 schools and community colleges.

In regards to higher education, the failure of Proposition 30 could cause the UC system to face a $250 million “trigger” cut. In addition, the UC would lose another $125.4 million in a tuition increase buyout.

If voters in November approve Proposition 30, the resulting revenue will go towards helping the state address its deficit and meet its Proposition 98 (1988) obligations to K-12 education, which would free up more money to go to higher education.

For the longer term, the passage of Proposition 30 would lead to a completion of a multi-year funding agreement between the state and the UC and CSU systems.

The UC Regents endorsed Proposition 30 at its meeting in July, agreeing with the state to forgo a tuition increase for the 2012-13 school year, pending the approval of the proposition. UC President Mark G. Yudof has stated his support for the measure as well.

Ph.D. student and Associated Graduate Students President Justin Chung offered a statement on the significance of Proposition 30. Despite it being what he called a “lukewarm, last ditch effort,” it is the only available option to maintain a link between the state and public higher education.

“In each UC campus, there are more first-time college students than the entire Ivy League combined,” Chung said. “We are the vehicle, along with CSU, for upward economic mobility in this state.

“[The legislature] has failed us from year to year. This year, for the first time, students have paid more than the state of California to the University of California and that’s a travesty to me.

“I think it’s important that everyone knows [the impact of Proposition 30] and calls their parents and tells them about the effects of Prop 30 if it fails.”